Juices and teas: Fruit Drinks Flat, Teas Growing

Information Resources Inc. (IRI) reported that the total count for the sparkling juice category is $78 million and rising. Even so, it’s a bit difficult to tell how much traction the average c-store retailer can get from them given the huge number of beverage choices available in this category today.

Other than specialty sparkling beverages like Newman’s Own Lightly Sparkling Fruit Juice Drinks, the sparkling juice category hasn’t moved much since PepsiCo purchased Izze in late 2006. Even as product quality improves consumers’ attention is moving more toward functional waters and teas.

"Overall the fruit beverage category has been experiencing lackluster performance for a number of years for several reasons," said Gary Hemphill, senior vice president of Beverage Marketing Corp. "Higher costs, especially of chilled orange juice, weak innovation, and intense competition for other refreshment beverage categories among them."

Nonetheless, Productscan data shows fruit and fruit flavored drinks was the leading category in new global drinks launches for the three months prior to January 2008, though the category overall saw 25% fewer launches compared with the previous year.

"People want variety and are open to new products," Hemphill observed. "It’s important to offer customers new options along with tried and true brands."

Driven by news reports of the high sugar content in many juice drink blends, manufacturers are focusing more on bringing out juice drinks they can promote to health conscious consumers. Two new antioxidant-rich juice blends from Minute Maid—Pomegranate Flavored Tea and Pomegranate Lemonade—exemplify this trend.

Even low-alcohol juice drinks are emerging as manufacturers move to capture larger drink market share by appealing to consumers’ growing health consciousness. Japan’s Asahi Breweries is launching its first low-alcohol sparking beverage using vegetable juice. The product, "Asahi Vegesh," will contain the juice of 21 kinds of vegetable, including carrot, and five kinds of fruit, including grapefruit.


Tea Time

Tea is second only to water in worldwide consumption, and Americans drink their fair share. They differ from the rest of the world’s tea drinkers, though, in that about 40 billion of the 50 billion cups consumed here each year are poured over ice first.

Beverage Marketing Corp. called iced tea "one of the bedrock sectors of New Age beverages," with brands like Snapple and Arizona capitalizing richly on tea’s better-for-you appeal, easy drinkability and refreshment, and its ability to be blended with a variety of intriguing flavors.

The ready-to-drink tea sector, consistently ranked as one of the fastest growing new product entries over the last several years, burgeoned in excess of $6.85 billion in sales in 2007. Industry analysts expect the category will continue to grow in popularity with annual dollar increases in the range of 12 to 15%.

The driving force behind RTDs popularity is convenience. Ease of preparation has never been a strong selling point for tea, a problem that RTDs easily avoid.

Tropical flavors and functional ingredients continue to drive beverage development.

A multitude of research suggests that drinking tea provides numerous health benefits. Tea has less than half the caffeine of coffee, provides antioxidants that protect against the effects of aging and the polyphenols in tea protects against certain forms of cancer.


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