In search of innovation to boost juice market

by Allison Gibeson
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Though the juice market has been essentially flat, positioning the beverages as refreshment and adding to the underdeveloped low-calorie offerings may provide growth. As pure fruit juice gradually has been losing share to fruit beverages, some companies are combining juice flavors with other types of beverages to energize the category. One example is the recent introduction of Purchase, N.Y.-based PepsiCo Inc.’s Trop50 Juice with Tea products.

“Tea is a fast-growing segment in the chilled category that is widely known for its health benefits,” said Kate Keller, Trop50 director of marketing. “Fruit juice also provides goodness and nutrition that consumers love, so it makes perfect sense to add tea to our juice. Trop50 Juice with Tea stays true to our 50% less calories proposition.”

Campbell Soup Co., Camden, N.J., is working to take juice beverages into the carbonated segment with the introduction of V8 V-Fusion Sparkling juice beverages.

“We know people love the refreshing taste of soft drinks, but they’re looking for healthier options,” said Dale Clemiss, vice-president of V8 Beverages.

Orange was the top juice flavor in 2011, with coconut water an up-and-coming flavor and fruit blends another popular variety, said Garima Goel Lal, beverage analyst with Mintel. She said some manufacturers are using coconut water to reduce calories, such as PepsiCo mixing coconut water in Naked smoothies to reduce calories. Superfruit flavors are not as popular as they once were, but they are still showing strength.

Campbell Soup Co. and its V8 brand have said there has been a surge in cherry and berry flavored juice blends in addition to grape and lemonade flavors. Ms. Goel Lal added that flavors that appeal to the Hispanic population, such as mango and pineapple, are increasing in popularity.

Despite the innovations and popular flavors, Gary Hemphill, managing director of the Beverage Marketing Corp., New York, said the market has experienced weakness due to the fact the products are on average more expensive than other refreshment beverages and typically higher in calories. The market is somewhat mature as more than 90% of households report using some sort of juice or juice beverage, Ms. Goel Lal said.

“While there has been innovation in the category, the innovation is a little weaker than what we have seen in some of the other categories,” Mr. Hemphill said. “There has not been breakthrough innovation that has impacted the overall market.”

Despite setbacks, there are opportunities for growth. Mr. Hemphill said he believes the reduced calorie segment is underdeveloped and has the potential for growth. Ms. Goel Lal said there is a need to have more diet products that speak to consumer needs, but taste issues must be overcome.

While consumers want lower-calorie products with less sugar, that may be difficult to deliver as more than half of all juice and juice beverage consumers do not like the taste of beverages with artificial sweeteners, according to Mintel survey data. Ms. Goel Lal also said consumers do not like to see artificial sweeteners on labels for health reasons. Stevia has worked as a natural sweetener for Trop50 products, and one-quarter of juice consumers said they have tried stevia-sweetened juice and like the taste. Mintel also said 75% of all juice consumers do not want sugar added to 100% juice products.

There needs to be a shift in how juice products are positioned, Ms. Goel Lal said. More products need to be positioned as refreshment because consumers claim that is the main reason they buy juice products. Yet many products are positioned as a family or breakfast product and do not necessarily appeal to refreshment. Campbell Soup Co. said its V8 brand will focus on bringing new benefits, such as refreshment, energy and carbonation, to the juice market in coming years.

Packaging also may be an area of innovation, and several companies have begun using carafe-style bottles and consumers identify with this packaging, Ms. Goel Lal said.

Overall, Mintel said the market for fruit juice and juice beverages hit $15.9 billion in sales in 2011 and it is expected to grow by 14% to reach $18 billion by 2016. According to Mintel’s Global New Products Database, in 2011 there were 540 juice beverage products introduced, down from 566 in 2010.
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