Juice makers get boost from premium juice market

High prices and high-calorie contents are putting the squeeze on the juice category. The water, ready-to-drink tea and energy drink categories have been grabbing share away from juice as consumers opt for beverages that offer a lower-calorie profile than juice. Higher pricing also has been hurting sales.

“The juice category is at an interesting juncture,” John Sicher, editor of Beverage Digest, said. “Pricing is up substantially, which has a lot to do with the damage to the Florida crop. Dollars for the category are up 3 percent, but that’s due to a 20 percent increase in pricing.”

A Mintel survey revealed that 37 percent of consumers who said they are drinking less juice this year compared with a year ago are doing so because of the rise in juice prices.

Consumers who responded to Mintel’s survey also said they were drinking less juice because they felt juice and juice drinks did not align with their health goals, such as losing weight.

Those trends have meant trouble for the juice and juice drink categories, which Mintel reports to be down 4 percentage points from 2003 to 2007. The market research firm expected the category to decrease annually at a rate of 2.5 percent until 2012.

“Although the household incidence of drinking fruit juice and juice drinks has held steady at 91 percent, the average frequency—a measure of repeat sales—has declined 7 percent during 2003 to 2007,” Garima Goel Lal, a senior analyst at Mintel, said.

“The category overall has been soft,” Gary Hemphill, editor of Beverage Marketing, said. “Health and wellness are the biggest factors in a consumer choice of a beverage.”

It’s not all bad news for the category. Products positioned as a healthy choice or as super-premium options gave the category a boost.

“Super premium, fresh-packaged juices, such as Odwalla, Naked and POM Wonderful, are in an area that [has] performed very well, even though the growth is off a small base,” Hemphill said. “Many of these juices contain super fruits that are high in antioxidants.”

Mintel’s Lal believed that fruit flavors with health benefits will be beneficial to the market going forward. “Cranberry-flavored juice drinks, for example, grew 26 percent during the last two years—the highest growth among juice flavors,” she said.

Consumers are willing to pay more for super-premium products that offer a benefit. Pepsi recently introduced Tropicana Pure Valencia, a super-premium orange juice produced from the top 3 percent of the company’s orange harvest. Packaged in a plastic hourglass-shaped bottle with a suggested retail price of $4.49, the product, along with four other SKUs in the line, is Tropicana’s most premium juice.

“Coke has also done well with Simply Orange, which had a 17 percent increase in volume,” Sicher said.

Simply Orange’s not-from-concentrate and all-natural positioning has been a hit with consumers. Coke also has introduced Minute Maid Enhanced Orange Juice, a functional orange juice targeting joint health, heart health and immunity protection.

Beverage Marketing’s Hemphill said there’s also some action in hybrid juice products that bridge multiple categories, such as Hansen Natural Corp.’s Rumba, an energy fruit juice drink. “I think drug retailers should experiment with some of these growing niche categories,” he said.