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    Still Growing

    As consumption of soda falls, interest in healthier noncarbonated beverages experiences a surge.

    By Bridget Goldschmidt, Stagnito Business Information

    For many consumers these days, carbonated beverages seem to have lost their fizz.

    According to Schaumburg, Ill.-based Nielsen, sales dollars for the category fell 1.9 percent for the 52 weeks ended Nov. 22, 2014, on top of declines of 1.9 percent and 4.3 percent for the comparable time periods in 2012 and 2013, respectively.

    “As part of taking responsibility and control of their health, consumers are reducing their intake of sugar in beverages,” explains Kristen Bodenstein, director, beverages at Stamford, Conn.-based Daymon Worldwide. “This is driving the steady growth of categories like still, unflavored bottled water.” She points out, however, that soda-averse shoppers are indulging their lingering love for bubbles by “turning to sparkling water, which is usually unsweetened or made with natural/artificial sweeteners.”

    Continues Bodenstein, “In order to leverage ongoing consumer health-and-wellness trends, noncarbonated beverages are expected to remain focused on healthy/functional offerings.”

    Game Changer

    One manufacturer capitalizing on this rising consumer interest is Lakeville-Middleboro, Mass.-based Ocean Spray, which is, of course, synonymous with cranberry products. Recent research has indicated that the tiny red fruit not only plays a rule in urinary tract health, but also may protect the heart and maintain blood sugar levels.

    “Retailers can expect more beverages to emerge into the marketplace that provide a variety of unique health benefits that go beyond just vitamins and minerals, while also meeting the need for great taste,” notes Kelly Reilly, director, global innovation at Ocean Spray, adding that this past fall, the company “introduced a game-changer’ within the functional beverage landscape.”

    That game-changer was PACt cranberry extract water, Ocean Spray’s first foray into the water aisle, which contains PACs, or proanthocyanidins — “powerful elements found deep inside cranberries, to help cleanse and purify your body better than water alone,” explains Reilly. “Our team of research experts has been working for over 10 years to find a way to extract and preserve cranberry’s unique A-Type PACs, creating a patented process resulting in a concentrated liquid. To make PACt cranberry extract water, the extract is then added to purified water.”

    According to its tagline, PACt features the “Power of 50 Cranberries” in every bottle, without all of the sugar and calories of traditional cranberry juice and juice drinks — just 10 calories and 2 grams of natural sugar per 16-ounce bottle. The four-SKU line also reflects consumer demand for clean-ingredient products, with a mere seven ingredients.

    To promote the new beverage, Ocean Spray has “embarked on a fully integrated marketing campaign, including PR, radio advertising, digital, social and product sampling,” says Reilly. “This fall, we kicked off our initial West Coast launch with Maria Menounos, E! Entertainment TV host and two-time New York Times best-selling author, to help us inspire consumers to hydrate in a healthy way … via PR events and social media. Beginning in 2015, PACt water will be available nationwide, and we will employ additional marketing tactics such as TV advertising next spring for our national launch.”

    Already available at major retailers in California and Nevada, as well as online, PACt benefits from Ocean Spray’s “distribution partnership with PepsiCo to ensure consumers can find [the beverage] everywhere they shop,” observes Reilly, adding, “We’ve created several point-of-sale materials, including free-standing, in-store displays and advertising materials such as cold door clings.”

    According to Reilly, the product “provides a peek under the tent in terms of our future direction towards providing consumers with multiple options to address their needs.”

    Lots to Choose From

    For The Coca-Cola Co., which produces a wide range of noncarbonated beverages in addition to its iconic carbonated offerings, the issue comes down to providing plenty of options. “Consumers are looking for choice and variety, both in carbonated and noncarbonated beverages,” says a spokesman for the Atlanta-based beverage giant.

    Still, the spokesman acknowledges that noncarbonated choices have made inroads on soda’s once unchallenged dominance. “In the third quarter of last year, we gained value share in still beverages in North America, marking the 29th consecutive quarter that the noncarbonated beverage portfolio has either gained or maintained value share,” he affirms. “Specifically, we saw volume growth in tea, energy drinks and water.”

    The company partly attributes this growth “to the fact that one of our main global priorities is to strategically expand our profitable noncarbonated beverage portfolio. And when looking at the various categories, it’s the well-marketed, leading brands that are achieving and driving growth.”

    The Coca-Cola Co.’s plans in regard to noncarbonated beverages include continuing “to invest in our core growth priorities where we are a leader in juice, juice drinks and enhanced hydration,” the spokesman notes.

    This investment includes various marketing and merchandising strategies with regard to certain brands. For its Vitaminwater line, the company “developed gravity-fed roller racks to dispense … 20-fluid-ounce bottles,” says Ron Renner, VP, Glaceau brands commercialization. “This merchandising solution has significantly improved the organization and overall presentation of the various flavor varieties, making the product much easier to shop. We are currently expanding this innovative solution to create additional value in this important category.”

    Among Coca-Cola’s RTD tea brands, Gold Peak Tea, whose offerings include shelf-stable 18.5-fluid-ounce bottles, will reprise “The Taste that Brings You Home” campaign in 2015, following strong sales growth when it ran last summer. “By broadening the target audience for the campaign to include adults in their mid-20s up to their late 40s, the brand is focusing on consumers in various stages of life,” explains a spokesman for the brand. “The campaign will run from June to October in print/tablet, out-of-home and digital.”

    The organic Honest Tea line, meanwhile, “continues to merchandise and partner with other like-minded brands across all our product lines,” notes a spokesman for the brand. “For example, Honest Kids is part of Rock the Lunchbox, a program and microsite created with several other brands. Rock The Lunchbox offers tips and suggestions for and by parents who pack lunches. In its second year, we saw a 300-plus percent increase in fan actions and a 400 percent increase in total impressions year-over-year.”

    The spokesman adds: “With one of our [retail] customers, we also offered our ready-to-drink PET Honest Tea line and Honest Kids pouches alongside snacks in select locations during our National Honesty Index social experiments this past summer. We conducted our lighthearted test to see whether people would pay for or steal a snack when they thought no one was watching, which reinforced the honesty messaging.”

    The brand has updated its look with a proprietary embossed plastic bottle and revamped label graphics, in addition to improving the flavor of its Peach Tea SKU and converting its Honest Ade juice-based drinks into three herbal tea varieties: Pomegranate Blue, Orange Mango and Cranberry Lemon. The new items began arriving on store shelves last month.

    As noncarbonated beverages grow ever more popular, shoppers can expect even more innovation in the segment.

    “The future is bright for noncarbonated brands,” The Coca-Cola Co. spokesman says. “As consumers continue to look for more variety and choices, we will continue to meet their evolving needs with brand extensions, new flavors, sweeteners and packaging. As in years past, the continued growth of still beverages will remain a central element of our overall portfolio strategy moving forward.”

    “One of our main global priorities is to strategically expand our profitable noncarbonated beverage portfolio.”
    —The Coca-Cola Co.

    By Bridget Goldschmidt, Stagnito Business Information
    • About Bridget Goldschmidt In addition to serving as Progressive Grocer’s Managing Editor, Bridget writes many print and digital features encompassing a range of grocery and fresh categories across the store. Bridget also enjoys on-site reporting assignments at such key industry events as the New York Fancy Food Show and the International Boston Seafood Show, in addition to visiting stores for PG’s prestigious Store of the Month feature. In her years with the magazine, she has developed into a knowledgeable voice on grocery industry trends, sought by such distinguished publications as The New York Times.

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