Economy leads to more home-brewing of coffee
NEW YORK Americans may keep getting their morning Joe at Starbucks and Dunkin’ Donuts, but a difficult economy will cause sales to increase faster at retailers than at coffeehouses and restaurants, according to a new Packaged Foods study.
The study, “Coffee in the U.S.: Retail, Foodservice and Consumer Trends,” found that coffee sales increased by 11 percent last year, to $43.9 billion, compared to a 9.7 percent growth rate between 2003 and 2007.
PF predicts that while sales at coffeehouses and restaurants will increase by 36 percent, sales at retailers will increase by 37 percent, to $52 billion and $7.8 billion, respectively.
PF also found that cross-branding has become a significant trend. For example, Kraft Foods distributes ground and whole-bean Starbucks and Seattle’s Best coffees to retailers, while supermarkets in the eastern United States are selling packaged coffee from Minneapolis-based Caribou Coffee.
Starbucks shares were trading on the NASDAQ at $14.56 around noon Tuesday, up by 0.47 percent.
Yoplait offers light cake-flavored yogurt
MINNEAPOLIS Cake now comes in liquid form.
Next month, General Mills will begin selling a new line of Yoplait Light yogurt Monday made to taste like strawberry shortcake, raspberry cheesecake and pineapple upside-down cake, the company announced Monday.
The yogurts are fat-free and contain 110 calories, as well as 20 percent of the recommended daily value of calcium and vitamin D.
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.