JUICE,TEA & WATER
Boosting the Benefits
by Julie Cook Ramirez
Contributing Editor

Health-minded consumers are seeking more bottled juices, teas and waters — especially those that offer a little something extra.
Despite the publicity surrounding obesity in the United States, the general consensus across the food and beverage industry is that the country is in the midst of a renewed interest in healthfulness. Perhaps nowhere is this more evident than in the juice, tea and water category.
That’s not surprising, of course, considering the category’s very existence depends upon people seeking to improve their health by downing a bottle of their favorite flavored elixir. Still, manufacturers are convinced that consumers are ready to send soft drinks packing in favor of healthier options.  
“People do a lot of things to try to live better, longer, healthier lives,” says Bruce Langer, president, Langer Juice Co., City of Industry, Calif. “Switching from soft drinks to juice or juice-based beverages is consistent with that.”
Increasingly, there is a sense that consumers are turning their backs on sugary, carbonated soft drinks. For proof of that trend, you need look no further than Atlanta-based Coca-Cola Co., whose recent acquisitions serve as evidence that the company has recognized that the writing is on the wall. In February, the company announced its intention to purchase Fuze Beverages LLC, maker of Fuze brand enhanced juices and teas. Then in June, Coke completed its acquisition of Glacéau, maker of VitaminWater, a hot commodity that racked up a 120.8 percent increase in dollar sales over the past year, according to data from Chicago-based Information Resources Inc. (IRI).
“This acquisition fits perfectly within our focus on our North American business and our belief that, alongside our sparkling beverage leadership, an expanded active lifestyle business will greatly enhance our still beverage lineup,” says Muhtar Kent, Coke’s president and chief operating officer. “We are moving full-speed ahead to fully leverage Glacéau’s growth potential, first in the United States and then around the world.”
Last year, Beverage Partners Worldwide, a joint venture between Coca-Cola and Nestlé S.A., introduced Enviga, a sparkling green tea containing the “optimum blend” of green tea extracts (EGCG), caffeine and calcium for burning calories. Coke chief scientist Rhona Applebaum says Enviga actually creates a negative calorie effect — that is, a consumer burns more calories as a result of drinking the product than they acquire from drinking it — a claim that has come under fire from industry watchdogs.
This spring, Coke also announced the launch of Dasani Plus vitamin-enhanced flavored water beverages. Three varieties, each containing zero calories, are currently available: Refresh & Revive (kiwi strawberry), Cleanse & Restore (pomegranate blackberry) and Defend & Protect (orange tangerine).
While it would be easy to view Coke’s expanding presence in the category as making it increasingly difficult for companies with smaller marketing budgets to compete, Langer actually views it as a positive for everyone. “I think it means there’s going to be shelf space dedicated to the category and I think greater awareness and innovation, too,” he says.
Awareness of the category already seems quite high. Sales of bottled water soared 15.5 percent in dollars and 13.3 percent in units in supermarkets, drugstores and mass merchandisers, excluding Wal-Mart, during the 52-week period ending June 17, 2007, according to IRI.  Meanwhile, overall category sales of refrigerated juices and juice drinks rose 4.4 percent in dollars, but fell 8.5 percent in units. Those seemingly disparate figures could be indicative of the growing interest in so-called super juices — pomegranate, goji berry and açai, for example — which promise an ultra-healthy punch of goodness, along with an ultra-healthy price tag, in many cases.
“The more educated people that are more in tune with what they should be consuming are definitely looking at these products because of the benefits that they perceive they can get from them,” says Jim Lesser, director of marketing, Oakhurst Dairy, Portland, Maine.
Controversial Combos
While she concedes that scientific evidence definitely points toward the healthfulness of such “exotic” juices, Sue Taylor, director of nutrition communications for the Washington, D.C.-based Juice Products Association, cautions processors to tread lightly when making specific health claims with regard to their products.
“There’s a very fine line between what you can say and what the FDA will allow you to say,” Taylor says. “Without significant substantiation that almost borderlines on getting an FDA health claim, you have to be cautious because no food is going to cure anything.”
That said, heavy media coverage of so-called “super fruits” has a growing number of consumers convinced they can drink their way to health. Unfortunately, the fact that such juices command a high price has led some juice companies to engage in unscrupulous activities, charges Langer, who accuses some of his competitors of duping their customers — that is, selling product labeled as 100 percent pomegranate that is anything but. Langer says he first became aware of the problem when he and some colleagues were tasting competitors’ juices and began picking up hints of other juices in what was supposedly 100 percent pomegranate juice. Subsequent lab tests confirmed their suspicions, he says.
“Adulterated pomegranate is a current and widespread situation. You’ve got companies labeling their product as 100 percent pomegranate juice, when the lab report shows that there are other juices in it and sometimes added sugar,” Langer says. “Hopefully, the companies that are doing this will fall out, but this has the potential to really shake consumer confidence in pomegranate juice.”
While the company remains committed to the pomegranate proposition, Langer has recently announced plans to extend its chilled line to include new juice blends featuring the other super fruits: açai and goji berry. The company also announced a line extension on its Enhanced H20 line. Available in Power Pome­granate and Detox Dragonfruit, New Enhanced H2O Zero contains no calories or sugar. Both the chilled line and the Enhanced H20 Zero products are sweetened using organic cane juice. According to Langer, the human body metabolizes cane juice differently, thus avoiding the negative effects of high-fructose corn syrup.
When it comes to organic juices, demand is high, although Matt McLean, chief executive officer and founder of Uncle Matt’s Organic, Clermont, Fla., says the organic segment faces somewhat of a challenge because the juice category is already perceived as healthy, leading many consumers to believe they don’t need to go organic to reap health benefits. His company recently rolled out two new organic orange juice blends: Orange Pineapple Banana and Orange Peach Mango.
Meanwhile, in La Farge, Wis., Teresa Marquez, chief marketing officer for Organic Valley Family of Farms, reports that her company is “selling just about all the orange juice we can procure right now domestically.” Organic farmers have approached the company about expanding its line to include the more exotic “super fruit” kinds of juices, but Marquez says Organic Valley isn’t quite ready to get into that arena just yet.
Meanwhile, Miriam Erickson Brown, president and CEO of Des Moines-based Anderson Erickson Dairy, isn’t sure whether her company will get involved with those kinds of juices at all. In the case of AE, Brown says it’s the company’s Midwestern location holding it back.
“The moment you take a dive into pomegranate and some of those other juices,” she says, “you’ll lose your customer base in the Midwest.”
To a ‘Tea’
One product that seems to have coast-to-coast appeal is bottled tea. The refrigerated tea category continues to rack up phenomenal sales increases and this year is no exception, with dollar sales up 26.9 percent and unit sales up 18.2 percent, according to IRI.
Seth Goldman, president and “Tea-E-O” of Bethesda, Md.-based Honest Tea, says the logic behind tea’s popularity is simple: “There’s no question the healthy properties of tea have helped fuel a lot of the growth, as more and more research comes out about the antioxidants in green tea and the polyphenols in black tea and how good for the body they are.”
While green tea remains at the heart of Honest Tea’s offerings, the company’s latest introductions include varieties like Pomegranate White Tea with Açai and Pomegranate Red Tea with Goji Berry. The company also recently rolled out Honest Kids, a line of organic kids’ drinks packaged in portable pouches. Available in three varieties — Berry Berry Good Lemonade, Goodness Grapeness and Tropical Tango Punch — Honest Kids contain less than half the sugar and calories of similar juice pouches currently on the market. Asked whether Honest Tea has plans to develop a line of kids’ teas, Goldman says he doesn’t see the need to do so at this time.
REFRIGERATED JUICE AND DRINK SALES*
 $ Sales
(In Millions)
% Change
vs. Year Ago
Unit Sales
(In Millions)
% Change
vs. Year Ago
Total Category$4,298.44.4%1,591.1-8.5%
All Other Fruit Juice56.4-21.612.4-13.9
Apple Juice10.510.45.0-3.4
Blended Fruit Juice273.010.892.83.7
Cider53.03.918.71.7
Cranberry Cocktail/Drink8.142.22.830.1
Cranberry Juice/Blend2.069.30.591.1
Fruit Drink692.1-1.6381.4-10.6
Fruit Nectar20.36.57.81.4
Grape Juice5.744.92.141.7
Grapefruit Juice69.74.021.01.0
Juice and Drink Smoothies125.947.243.241.5
Lemon/Lime Juice6.84.54.8-1.0
Lemonade168.521.789.56.6
Orange Juice2,760.53.7895.9-12.0
Pineapple Juice14.511.35.29.9
Vegetable Juice/Cocktail29.3-6.77.9-16.2
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending June 17, 2007.
SOURCE: Information Resources Inc.

TOP 10 INDIVIDUAL REFRIGERATED TEA BRANDS*
 $ Sales
(In Millions)
% Change
vs. Year Ago
Dollar
Share
Unit Sales
(In Millions)
% Change
vs. Year Ago
Total Category$258.826.9%100.0%138.618.2%
Turkey Hill64.314.124.935.111.6
Red Diamond31.234.012.015.223.2
Pom Tea29.8496.111.510.0393.7
Private Label25.317.19.819.517.3
Bolthouse17.7-2.16.95.5-7.2
Nestea15.140.35.27.037.6
Milo’s12.114.04.75.75.3
Swiss Premium10.039.33.96.632.7
Arizona8.6-7.23.35.7-2.4
Arnold Palmer Tee4.6111.81.82.594.9
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending June 17, 2007.
SOURCE: Information Resources Inc.

TOP 10 INDIVIDUAL CONVENIENCE/PET STILL WATER BRANDS*
 $ Sales
(In Millions)
% Change
vs. Year Ago
Dollar
Share
Unit Sales
(In Millions)
% Change
vs. Year Ago
Total Category$3,880.415.5%100.0%1,523.013.3%
Private Label581.721.715.0222.912.3
Aquafina520.38.713.4181.9-2.5
Dasani460.917.011.9175.63.3
Poland Spring266.815.76.976.27.8
Glacéau VitaminWater246.4120.86.4188.7113.3
Propel195.2-2.45.0104.55.0
Arrowhead180.59.44.755.24.4
Deer Park147.317.13.834.812.9
Crystal Geyser110.035.22.838.422.3
Nestlé Pure Life107.855.42.834.152.1
*Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart,for the 52-week period ending June 17, 2007.
SOURCE: Information Resources Inc.