Organic hydration

by Allison Sebolt
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A demand for healthier refreshments and a wider availability of new products in the marketplace have helped contribute to the growth of the organic beverage market in recent years.

"There is a general movement toward healthier refreshment in the beverage marketplace, and organic fits within that healthy halo," said Gary Hemphill, senior vice-president of information services for the Beverage Marketing Corp., New York.

Lee Brody, vice-president of marketing with The Healthy Beverage Co., the maker of Steaz products, said Americans are more aware of the need to make healthy choices, and organic beverages offer many benefits.

The Healthy Beverage Co., Newton, Pa., makes Steaz Sparkling Green Tea and Steaz Energy products, and recently introduced Steaz Organic Iced Teaz products. The Iced Teaz products are a line of Fair Trade Certified ready-to-drink iced teas with flavors that include four green tea varieties, black tea with lemon, and white tea with lime and pomegranate.

In terms of organic tea flavors, Mr. Brody said superfruits such as acai and pomegranate are popular for their flavor and antioxidants. Steaz uses acai in its energy drinks and one of the iced teas, and the brand uses pomegranate in two iced teas. He said the most popular flavor of the Iced Teaz products is the blueberry pomegranate acai.

"Iced tea is universal," Mr. Brody said. "It’s been a growing segment for many years because it’s simple and refreshing. As you get older you also start to look for alternatives to carbonated soft drinks, and iced tea is the ideal beverage for many. Now that there are so many healthy choices when it comes to iced tea it’s no wonder why the category is growing even faster."

Steaz also has various energy drink products. The newest is the Steaz Energy Shot, which the company said is a convenient and healthier way to build stamina and sustained energy with 150 mg of caffeine. In addition to the new energy shot, Steaz has regular organic energy drinks in flavors such as berry, lime and orange, and the company even has a diet energy option.

"Energy drinks became popular due solely on their functional benefit — the boost," Mr. Brody said. "But even as they grew in popularity many people, communities and school districts became concerned about the ingredients that create that spike in energy. An organic energy drink is one that’s made only from ingredients that are naturally occurring in nature. For example, Steaz uses only plant-based caffeine from green tea, guarana and yerba mate in our best-selling energy drink line. We also boost our formula with vitamins B and C and added antioxidants from acai."

Steaz first began offering energy drink varieties with its Berry Energy Drink in the first quarter of 2006. Mr. Brody said the company had been exploring the category, and they were asked by a customer to create an organic and all-natural alternative to Red Bull.

Steaz products are also Fair Trade Certified, and the Iced Teaz products feature pictures of Fair Trade farmers from Sri Lanka, China and Africa, which are the places where the products are sourced.

Guru Beverage Co. has a line of Full On Lemonade, which the company advertises as an energy and sports drink. In addition, there is a Green Tea Honey Lemon product that is advertised as an energy drink and iced tea.

The R.W. Knudsen Family recently introduced Sparkling Essence beverages, which are sparkling spring water products infused with organic ingredients in flavors that include lemon, cucumber, blueberry and mint. The company said the product meets consumers’ need for a light, calorie-free organic beverage. The company also has Sensible Sippers, which are organic juice boxes to help reduce the amount of calories and sugar children are consuming.

According to the B.M.C., there was a 55% volume increase in organic energy drinks between 2007 and 2008 and a 21% volume increase in organic teas. Mr. Hemphill said this reflected the fact they are both new subcategories, especially organic energy drinks. He said the product areas are growing rapidly but are drawing from a small base, and he expects these segments to remain niches within the larger conventional categories.

According to the Global New Products Database from Mintel International, Chicago, there were 555 organic beverages introduced in 2008, up from 423 in 2007.

Mintel estimated sales for organic beverages to decline in 2009 to $1,837 million after experiencing an 11% increase in 2008 to $1,855 million. Mintel said it expects the market to pick up again in 2010.

One of the biggest barriers to the market is the cost of the products. As a result, many consumers have substituted some premium products with less expensive conventional products. Mintel said consumers who believe organic products are better for them and can afford to pay for organics are likely to keep buying them. Trade-offs and moving to natural beverages instead of organic alternatives or choosing organics in some product classes such as milk but conventional in other classes are likely to be more of a trend than a wholesale switch to organics, Mintel said.

Mr. Hemphill said the products tend to appeal to those with a higher disposable income and are more willing to accept higher prices, but added price may become more of a factor in today’s economy.

"We really believe the sky is the limit as consumers become more aware of organic brands and the brands themselves make the transition from the natural set into the main beverage aisle," Mr. Brody said. "Steaz also believes in and is pioneering the concept of ‘affordable organics’ to make sure our premium beverages are priced in a way that they are accessible to any consumers wishing to enjoy them."

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