Diversified product abounds on the fortified beverage landscape, so how's a person to choose what to stock in the finite space of a reach-in refrigerator or vending slot?
Do your customers know—or care—about all those neutraceuticals that enhance various waters, energy and sports drinks—and are they willing to pay the premium price? Do they go for the tried-and-true sports drinks such as Pepsi's Gatorade (the first functional beverage), Coca-Cola's Powerade (now with one-third more carbs than Gatorade) or Monarch Beverage's All Sport for their rehydration needs? Or, are they looking at "fortified beverages" as a meal replacement or supplement such as that provided by Unilever's Slim Fast, the category market leader?
Then, there are the energy drinks including sector leader Red Bull (with a new diet version recently introduced) and the launched-at-presstime Psyche and Raize, line extensions of Powerade. According to Beverage World's Andrew Kaplan (BW, Jan. 2003, p. 18), these two new products, each with its own distinctive flavor profile and functional ingredients, "marry the hydration benefits of a sports drink and the energy benefits of an energy drink. Psyche is formulated for optimizing brain performance while Raize offers an energy boost."
'Ice cold' a must: Kaplan further reports that, according to a recent market research study from Wild Flavors, Inc., Erlanger, KY, customers are looking for icy cold, not too sweet, well-blended flavors, with taste and flavor being more important for sports drinks than for energy drinks.
Some industry experts note that many consumers choose their functional or fortified beverages based on their familiarity with the added nutrients, thus the wide acceptance of vitamin C, the B vitamins, beta-carotene, ginseng, echinacea, ginkgo, guarana, etc. Based on consumer familiarity with recent studies widely reported in the media, you can expect to find the anti-oxidant lycopene and perhaps the omega-3 fatty acids added to the fortification roster in the future, notes Beverage World's Heather Todd (BW, March 2003, p. 92).
"Enhanced water is still a small segment but a growing niche category," notes Beverage Marketing's v.p. and trendwatcher Gary Hemphill. "Fitness waters such as Propel from Gatorade (Pepsi) and general wellness water including Pepsi's Aquafina Essentials, Snapple Elements, AriZona Rx WaterAID, Glaceau Vitaminwater—plus soon–to–join–the–list Desani Nutri Water from Coca-Cola are all targeting the younger, active life-style consumers," he says.
There's a lot of new product activity around these enhanced products, but, as Hemphill points out, none compare to the overall bottled water category which last year grew in excess of 25% in the single-serve market. Sports drinks are growing in the high single digits, at 8% to 9% annually.
Consumer ambivalence: Although Robby Chinsky, Sodexho's sr. director of purchasing retail products, quickly quips, "If it's cold, it's sold," his years of experience lead him to a less flippant conclusion: "Neutraceuticals added to water—these are product line extensions. The FDA doesn't even want to define it and we (at Sodexho) don't really focus on it. I don't think consumers are looking for it. The whole (bottled) neutraceutical thing is not big growth for us."
Chinsky equates functional beverages, such as Slim Fast from Unilever, as meal replacement. "Snapple recently came up with a meal supplement—Snapple-a-Day—as an entrance to this new category. I see these drinkable meals as 'Ensure for Yuppies.' There's also Fusion drinkable yogurt from Dannon as well as a similar product from Yoplait. Fusion is in our beverage planogram placed near Tropicana and other refrigerated beverages rather than with the yogurts. We also have a contract with Red Bull, the 'hypo-carb' beverage that's loaded with caffeine and sugar, but we didn't sell 40,000 cases of it last year," Chinsky admits.
No 'energy' for BC: Students at Boston College in Chestnut Hill, MA, won't get the chance (on campus) to sample the neutraceuticals or the KMXs of the marketplace. Pat Bando, dir. of dining svcs., explains the campus strategy: "We have a contract with Coke for their carbonated beverages and for bottled water—without flavors or neutraceuticals–plus we use thousands of gallons of Powerade. Coke is eager to give us KMX, but the administration has asked me not to carry energy drinks since we've learned that students at other schools mix them with alcohol to heighten the effect."
Beverages fortified with vitamin C, protein or echinacea are allowed, but Bando eschews the others, hoping students will choose to eat a balanced diet rather than using functional beverages as meal replacements.
In the future, she may consider such new products as SoBe's Long John Lizard's Grape Grog offering the benefits of the antioxidants in grape juice, while locations with a substantial Latino population, including the U.S. Border Training Academy in Charleston, SC, may seek out SoBe's other new intro, Fuerte, which boasts a mango/passion fruit profile and is fortified with guarana, yerba mate and Jamaica extract.
Where b-i-b is B–I–G: For now, Adam Varney, fsd at the Border Training Academy is very pleased with his newest beverage program, Gatorade in bag-in-box supplied by U.S. Foodservice, his prime vendor.
"Each day we serve approx. 400 to 750 students who go through rigorous training so these types of power drinks are essential. Of five flavors available, we offer orange and lemon/lime; we're using about 20 cases—that's 60 gals. of concentrate—for about 300 gals. of liquid a week. Since this is an all-you-can-eat facility, it's ideal since you don't want them carrying away bottles or cans."
Varney also offers approx. 14 flavors of SoBe beverages in one of his retail locations, with Power and Orange-Carrot Elixer being solid sellers.