Functional beverages help juice up sector
Functional beverages are moving to the next level. Sean Seitzinger, partner at Symphony Consulting of the SymphonyIRI Group, said that functional foods are one of the fastest-growing areas of the supermarket, recording 27% growth over the past three years. “Functional beverages, which comprise 63% of the category, are the center plate of that story,” Seitzinger said.
Mintel predicted that the functional beverage sector should grow 19% in current prices between 2009 and 2024, and noted that the success of functional beverages means they have moved well beyond niche levels.
Consumers are more open than ever to getting functional benefits from their beverages, said Gary Hemphill, SVP at Beverage Marketing’s information services division. The potential for new segments to emerge, he said, is great.
Energy drinks still represent the biggest segment of functional beverages. “When it comes to functionality in beverages, energy drinks are the runaway winners,” said Hemphill, who added that the category is growing solidly this year after weakness in 2009 due to the economy.
Since consumers’ need for energy drinks is broad, Hemphill saw “much room for future growth” in the category, pushing its appeal beyond its current target market. Energy drinks with memory-boosting benefits that appeal to boomers will give the category an even bigger platform going forward.
Enhanced waters and juices continue to have consumer appeal. Enhanced waters are growing, with such zero-calorie varieties as Sobe, Vitaminwater zero and O water outperforming other products and showing nice growth.
Enhanced juices, particularly shelf-stable products, have seen an uptick in sales. “It’s a surprise that refrigerated juices aren’t making more progress,” Seitzinger said. He added that shelf-stable juices, which face fewer distribution challenges and carry lower price points, have brought significant innovation to the category with products that combine fruit, vegetables and even antioxidant-rich green tea.
“Some of the big brands have really moved the ball quickly,” he said. “With V8 Splash and V-Fusion, Campbell’s changed the idea of what’s possible in terms of functional beverages.” Seitzinger also noted Ocean Spray’s Cran-Energy and Fruit & Veggie juice drinks and Apple & Eve’s Fruitables fruit and veggie combos as other successful introductions.
Beverages with probiotic benefits are another key segment of the functional market. Kirk Cornell, director at Hartman Group, called probiotics “one of the hottest trends in the functional beverage category.”
“We’re seeing more consumer interest in specific benefits from specific probiotic strains,” said Michael Neuwirth, a spokesman for Dannon. The company recently relaunched a drinkable version of its Activa product.
Joint health also has become a more mainstream area of functional beverages. “Functional beverages for joint health have moved beyond the ‘niche-y,’ early adapters to the mainstream,” Seitzinger said.
David Ritterbush, CEO of Joint Juice, said the company has seen 25% growth in the segment. “Functional ingredients that are backed by science and are effective with customers are showing the most promise. Americans are suffering from pill fatigue, and when a beverage can replace an unpleasant delivery form, it shows promise,” he said. The company recently launched a supplement drink with chondroitin, vitamin D3, calcium and antioxidants, and will launch an Easy Shot supplement in January.
As functional beverages move beyond what Seitzinger called their “101 versions,” retailers will need to do a better job reviewing their offerings and merchandising key products to move consumers beyond occasional users. “The one big story for 2011 is how do we connect our shopper to what’s happening in functional beverages in a more meaningful way, and how do we educate our pharmacists on what’s new in the category? Retailers will need to educate consumers and make a commitment to helping the consumer ritualize behavior so they produce a long-term benefit,” Seitzinger added.
Kashi scales back packaging
LA JOLLA, Calif. — Kashi is boosting its sustainability efforts by reducing the packages of its products by as much as 12.4%.
Among the foods that now feature less packaging are Kashi GoLean Crunch! honey almond flax and GoLean Crisp! toasted berry crumble cereals, all Kashi TLC crackers and the entire line of TLC chewy granola bars and TLC fruit and grain bars.
The calculations were determined by weight versus previous packaging design. The company noted that while the physical packaging of select Kashi foods has been reduced, the total volume of food within each package remains the same.
P&G’s manufacturing plant achieves zero waste to landfill distinction
CINCINNATI — Procter & Gamble announced that its Auburn, Maine, feminine care facility became the first manufacturing plant in North America to achieve zero waste to landfill.
P&G said its Global Asset Recovery Purchases team assisted the company in reusing or recycling its waste. P&G said these efforts delivered tens of millions of dollars in cost recovery to the company in the past year alone.
"Auburn’s success is the latest milestone in our continued global effort to achieve zero manufacturing waste sent to landfill," said Len Sauers, P&G VP global sustainability. "GARP is a terrific example of how internal innovation and external partnerships have joined to help realize the company’s sustainability vision and goals."
Auburn is the ninth P&G global manufacturing plant to earn this distinction.