Go the extra mile

If youre into extreme sports, extreme vacations or extreme anything, youre in for a thirst-quencher in todays marketplace. For adrenaline-lovers out there, theres a beverage for you. Thats the message that retailers get out to shoppers when they are promoting alternative beverages.

Energy drinks, energy shots and sports drinks continue to rise in popularity. As John Wilson, marketing manager for Edison, N.J.-based Allen Flavors Inc., notes: \"We saw the trend toward energy drinks enter the market like a fire truck.\"

Steven Fay, executive vice president of sales, Berner Food & Beverage Inc., Roscoe, Ill., says the market is hot right now for several alternative beverages, providing supermarkets and other retailers with an opportunity to increase sales that they didnt have in the past.

\"Energy drinks were unheard of only a few years back, and now they are part of the cultural landscape,\" Fay says.

Energize the beverage market
Added vitamins, minerals, caffeine and flavor infusions provide a premium position for todays most popular beverages.

\"Any product associated with a benefit rather than merely providing some pleasurable consumption seems to be getting traction,\" Fay says. \"We are seeing the development of and brisk sales in high-protein drinks. We also contract manufacture a coffee-based product claiming to help you sleep, and it is selling well.\"

Wilson adds that extra ingredients also add up to extra sales at his company.

\"We are receiving requests for extra caffeine in coffees, relaxing tea blends and added calcium in smoothies,\" he says.

And Larry Williams, vice president of sales for Canton, Ga.-based Monarch Custom Beverages, says drinks with additional vitamins and minerals have been the best-sellers at his company.

\"There has been a trend toward enhanced teas and lemonades with energy efficacy that add not only energy elements such as caffeine and B vitamins,\" he says, \"but also isotonic ingredients such as potassium and magnesium salts to give the end-user an energy/sports beverage.\"

Do
offer store brand alternative beverages in multi-packs.

Dont
neglect to market energy shots to older consumers.

A needed jolt
In the alternative beverages arena, sports drinks and energy drinks have seen large recent dollar and unit sales gains, particularly in private label, although from a small base (see the table, p. 53).

Walter Orcutt, executive vice president, private label division, of Andover, N.J.-based NVE Pharmaceuticals, says extra-shot energy drinks appeal to younger active consumers. The energy shot market, however, is \"vast and growing among the 25- to 54-year-old age group.\"

\"Energy shots are a convenient, portable and non-refrigerated way to boost your energy without breaking up your daily hustle,\" Orcutt notes.

But just because energy drinks and shots \"continue to grow unabated,\" retailers and manufacturers of the products cannot rest on their laurels and not try anything innovative, says Garima Goel-lal, beverage analyst and author of global research firm Mintels June 2012 report \"Energy Drinks and Energy Shots – US.\"

\"To enjoy uninterrupted growth, the category needs to add new consumers, engage in innovation, broaden its functional platform and allay product safety concerns,\" Goel-lal says.

One way the energy drink market can take it a step further is to add a popular category taken from the carbonated aisle – zero calorie. Williams explains that the products he is seeing take off are store brand zero-calorie or reduced-calorie energy drinks.

Make it natural, flavorful
Retailers also need to highlight those products that are promoted as natural and authentic, says Laura Erlich, sales and marketing coordinator for Wilmette, Ill.-based Imbibe. Initially brought to the forefront by national brands, the movement has made its way into the private label market.

\"What this means is [requests for] formulations using pure sugar cane instead of high-fructose corn syrup and requests for natural color and flavor,\" Erlich says. \"One of the leading trends is flavor fusions. A single flavor is not sufficient to excite customers anymore. Private label beverages, along with national brands, are utilizing combination profiles such as raspberry-pomegranate or more complex flavors such as blood orange and dragon fruit.\"

Milk-based ready-to-drink coffees in cans and bottles for retailers store brand programs are doing well for Berner, Fay says, as are different flavor varieties.

\"Mocha is still the best-seller for Berner, followed by vanilla, then coffee and finally the combined seasonal flavors such as pumpkin spice and raspberry cream,\" Fay explains. \"The introduction of seasonal flavors has lifted the category substantially and is becoming critical to a successful program.\"

Do
offer buy-one-get-one-free promotions for alternative beverages.

Dont
miss the opportunity to develop alternative beverages with complex flavors.

Better bottled water
The flavored-and-enhanced and flavored bottled water category is a highly competitive market where few points of differentiation exist between national and private label brands.

Goel-lal, author of the May 2012 Mintel report titled \"Bottled Water – US,\" says that growth in both markets appears to be slowing. One reason for the slowdown, she suggests, could be that lack of differentiation – \"where private label products offer [an] almost similar look, flavors, functional claims, as branded products.\"

In the flavored water category, consumers continue to look for healthier alternatives to traditional soda, explains Kevin Robb, director of marketing for Tampa, Fla.-based Cott Beverages.

\"Sweetened sparkling water provides that perceived healthier option because the product is clear in color, contains zero caffeine and zero calories,\" he says. \"At the same time, it offers the fizz and sweet taste consumers crave in their soda pop.\"

Robb says retailers have begun to update packaging designs here, as well as add new flavor options such as coconut and mango blends that are popular in other segments of the category.

Some of the more popular store brand functional waters produced by California Natural Products in Lathrop, Calif., are coconut waters, explains J. Michael Kirk, senior vice president of business development with the company.

\"We are having success with coconut waters in 300-milliliter Tetra Prisma Aseptic packages with the new Dreamcap opening,\" he says.

Merchandise to the max
Eco-minded carton packaging provides additional ways to expand the category, says Joe Arends, marketing manager with Chicago-based Continuum Packing Solutions, a smoothie supplier with popular fruit flavors such as mango. Consumers who buy natural drinks and other products tend to look for beverages in such packages. But he says it is better to locate these store brand products near the organic section in most retail stores, \"where familiarity with sustainable packaging is higher.\"

Placement and visibility in supermarkets is obviously important to a products success, Orcutt says. If a consumer cant find your product, he certainly cant buy it, he notes.

Erlich seconds this notion, suggesting in-store tastings and in-store promotions such as loyalty discount programs could spark product purchases.

Fay says that buy-one-get-one-free promotions work well in the category, as does lower pricing.

\"In many products we provide in this category, a retailer can put as much as a one-dollar gap between their store brand and the national brand,\" he explains.

Williams believes retailers should be focusing on selling multi-pack SKUs.

\"It is our feeling that the grocery consumer is looking for take-home consumption opportunities, and since that shopper may visit a grocer less-frequently than, say, a convenience store, it is vital to the success of private label beverages that the consumer purchase more than one bottle or can during each purchase opportunity,\" he says.