The juice sector is undergoing some big changes to regain its moxie. A move by many health-conscious shoppers away from 100 percent juice products, which they perceive to have an excessive amount of sugar, has contributed to flat sector sales. While juice drink sales are increasing, total growth will be minimal, according to a report from market researcher Mintel.
While a move by consumers away from supermarket center store aisles — and the large array of shelf-stable juice products — also is hurting activity, wellness concerns are having the biggest impact, Mintel notes.
Indeed, 41 percent of consumers who eschew 100 percent fruit juice say the high amount of sugar prevents them from making a purchase, Mintel states.
“Unfortunately, because the sugar in 100 percent fruit juice is natural, brands can’t just lower the total amount of sugar in the drinks,” Mintel notes. “Instead, juice brands need to diversify product offerings and identify new opportunities through product innovation.”
That is important as younger, and primarily millennial, consumers desire more than just traditional juice, says market researcher IBISWorld Inc.
“They want an innovative blend of flavors that is both nutritious and delicious,” IBISWorld notes in its December 2018 “Juice Production in the U.S.” report. “Due to these changes, the industry has updated its product offerings. Tropical flavors like mango and pineapple have been on the rise as consumers look for exotic and creative healthy alternatives.”
With new beverage options rapidly entering the beverage market, juice merchandisers are facing stronger competition, IBISWorld states. “In addition to the increasing popularity of ready-to-drink tea and coffee, coconut water sales have soared and protein is becoming an increasingly popular ingredient due to its ability to satiate,” IBISWorld reports.
Because parents, and particularly millennials, out-purchase nonparents for every juice type, brands need to develop selections that satisfy that segment’s needs, which could include options with organic and low sugar claims, Mintel notes.
“There may be an opportunity for brands to connect with lapsed juice buyers through juices with a less-sweet flavor profile,” Mintel reports.
The market for such options is large, as 27 percent of consumers say that most juice is too sweet, as do the nearly 50 percent of persons who want low sugar juice and don’t purchase 100 percent fruit juice, Mintel adds.
Opportunities for private brands juices, meanwhile, also are strong, with products with healthy elements likely to be increasingly attractive store brands, says Joe Ballantyne, vice president of sales for Smart Juices LLC, a Whitehall, Pa.-based organic juice supplier. Juices, he notes, already have the advantage of being plant-based, which is becoming a more important attraction for food and beverage shoppers.
“The issue is how can we take ‘plant-based’ and use it as a carrier for other beneficial ingredients, such as by adding probiotics or omega-3 to juice so users do not have to take a separate pill for those elements,” Ballantyne says. “Being innovative is important. And while juice is not an easy category to try to be different, that doesn’t mean it can’t be done.”
Yet, because of the expense of developing and marketing new products while remaining price competitive, most private brand retailers are content to merchandise national brand equivalents at a lower cost, he states. But many consumers will likely be willing to pay more for store brands with healthier elements if they see the value, Ballantyne adds. “The amount of such juice selections will grow,” he adds. “It has been occurring in the water business for a number of years, so why not do it with juice?”
Ballantyne adds that any selection that offers an additional wellness advantage “is going to become more and more popular. Consumers are going to be looking for anything with a health benefit or perceived health benefit. But it is crucial that selections are high quality as nothing can overcome that product attribute.”
Even with innovations, however, juice merchandisers will still face challenges, including having their products stand out in the crowded beverage category while overcoming the perception by many shoppers that products are unhealthy, says Samantha Lane, director of global marketing for the Bartow, Fla.-based Florida Department of Citrus.
“Fruit juice has been a target in the anti-sugar movement,” she concurs, “even though 100 percent fruit juice has no added sugar and only the naturally occurring sugars found in the fruit itself.”
Lane states that because a large portion of millennial moms still indicate that they feel good serving 100 percent orange juice, it’s important for marketers to engage with that shopper segment through social media, online messaging and via mobile devices while offering creative products.
Rich Mitchell is a frequent contributor to Store Brands.