Operations

O.J. Continues to Lead

Today's consumers love the healthier-for-you image of juice. The leading seller in just about every location is orange juice—no surprise there—with "not-from-concentrate" being the clear favorite. Tropicana, owned by PepsiCo, is the market leader—but Coca-Cola, with its Minute Maid brand, as well as its even-more-recently acquired Odwalla brand, is actively seeking a greater share of your business.

According to industry cognoscenti Gary Hemphill, v.p. of Beverage Marketing Corp., the New York–based market research firm, "Coca-Cola has been very aggressively rolling out Simply Orange not-from-concentrate. They've been expanding distribution in the past six months and now offer the clear plastic carafe in the Northeast as well as in the Southeast. And, during the past year, Coca-Cola has been involved in licensing for Disney Extreme Coolers, a drink product plus a 100% juice product for kids."

Ray Crockett, a spokesperson for the Minute Maid Company, reports the addition of Organics, the newest single-serve line from Odwalla, which is now debuting in several East Coast colleges. "Plus, we already have lemonade in 20-oz. bottles and next year we'll intro a light lemonade in 20-oz. PET bottles with only 12 to 15 calories per bottle."

The 'must-have' commodity: At Gaithersburg, MD–based Sodexho, Robby Chinsky, sr. director of purchasing-retail, views juice as the growing alternative to carbonated soft drinks and is focusing on where opportunity lies: (1) promoting not-from-concentrate o.j., the must-have "commodity" which accounts for 80% of (Sodexho's) juice sales; and (2) getting the value juice drinks and merchandising them along with carbonated soft drinks.

"So, in our beverage category management project we have placed many juices in our visicooler planograms. We've invested millions of dollars in technology; in consumer research; and in measurement tools to understand the utilization of these products. Under our direction, Wendyjean Bennett (sr. director of strategic marketing) is conducting that in-depth research," Chinksy explains.

The pure premium plus: Since Bennett has identified "more of a need in the field for pure premium juices in upscale locations," she's in the midst of developing a promo specifically targeting corporate services locations (i.e., upscale, high-profile accounts) for the breakfast day part.

"We've developed a combo deal featuring choice—it's unusual to offer 'choice' in such a deal. The customer can choose a bagel and cream cheese (with Kraft's Philadelphia cream cheese and Maplehurst Bakery's bagels); or Kellogg's cereal in a cup. Both come with pure premium Tropicana," she points out.

The promo, tested in 126 sites (in which o.j. sales reportedly increased by 2%), will be rolled out to the field prior to April 1.

Working with Bennett is the CatMan team (i.e., short for category management), an internal group that solicits consumer information upon which the planogram decisions are based (i.e., which products to stock and how many facings will be utilized).

For corporate services, there are four planograms vs. five that have been identified for higher education locations. Using a planogram CD, a manager in an upscale corporate location in the central states or on the East Coast, for instance, would be well-advised (according to the planogram) to place Snapple kiwi/strawberry. However, on the West Coast, SoBe Elixer (a cranberry/grapefruit blend) might prove to be the stronger seller.

Students designated as "contemporary"—at least those in the Southern region of the country—may be quick to choose SoBe Blizzard (the blue one) as well as Tropicana Twister (an orange/strawberry/banana blend).

A market research approach: "This was our first attempt to understand that everything isn't equal in each place. In a survey of our operators using our planogram CD for their unit (depending upon size of account based on transactions per day), 96% said it increased their sales. Overall, this is really a market research approach vs. a marketing approach," Bennett points out.

As v.p. of supply management svcs. for Buffalo, NY–based Delaware North Companies, Kent Belvin notes that most of the contractor's juice sales "move through our airport business" vs. sports venues, parks or racetracks.

"We believe in the 'Gateway' concept. That is, we partner with people in those communities to reflect regional tastes and regional brands. We have national agreements with Tropicana, Motts, Dole, etc. We spec the supplier and recommend the size of containers, then we monitor usage by location, but leave it to the local operator in terms of what they put out."

On balance, Belvin figures 85% of his company's juice business is orange juice and name brands are important. "People are very attached to their o.j. and they want to know it meets their standards and expectations," he says.

Home-grown organics: "Always on the prowl for something new," John Whitcomb, v.p. for internal marketing and concept development at Huntington Station, NY–based Whitsons, plans to debut the firm's home-grown organic blended juice concept in May. Targeting the corporate market for both breakfast and lunch, he believes fresh fruits blended to-order will be a crowd-pleaser.

"We see it as requiring only a build-out with a series of juice extractors. Our recipes include Tropical Squeeze, a blend of papaya, ginger root and pear; and a Classic V8 with tomatoes, cucumber, garlic, red pepper, radish, celery and onion—and of course, Tabasco sauce. Our college students would love it but we'd have to charge too much for it," Whitcomb admits.

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