DAVENPORT, Calif. -- Western supermarkets are taking advantage of a vendor-supported direct store distribution of fresh juice and juice products aimed to bridge the gap between the natural food and traditional juice markets.
Odwalla, a fresh juice packer here, has created a distribution system with a field-to-shelf orientation that pleases the health food consumer and the consumer just looking for good food.
The system involves packing fruit and vegetable juices and a DSD system, using super-chilled cold chain concepts. Then, Odwalla developed an inventory management program and provided the creative capital to come up with unique names and products to capture the consumers attention and dollars.
Odwalla packs and distributes fruit juices, vegetable juices, smoothies, seasonal juices and nutritional beverages using cold air as the only preservative. The beverages are not pasteurized, and do not use concentrates or reconstitution.
Odwalla originated in northern California and is marketing product in the Seattle; Denver; Boulder, Colo.; Albuquerque and Sante Fe, N.M.; and Vancouver, B.C. markets.
The company's distribution recently expanded to include southern California retailers.
"Very perishable products need separate distribution systems," said Brian Lovejoy, director of product leadership.
Lovejoy said the DSD system takes the labor cost out of restocking shelves, and eliminates out of stocks using an inventory tracking system that keeps abreast of the most turns per facing.
"Supermarket people are looking for a way of attracting natural food consumers," he said.
However, some retailer's experiences in this market have not proven to be profitable. Managing the product mix is a key to profitability, according to Lovejoy.
"We have paid the front end costs of managing the set with our information management, SKU tracking and daily inventory. This is a huge financial investment," said Lovejoy.
Additional savings at retail can be especially claimed by operators replacing their own in-store juicing operations with outside vendors, Lovejoy said. By removing the risk and the labor from the store level, retail operators can streamline their own operations.
To complete the packing and DSD system to the retail shelf is, what the company calls, the Odwalla Zone. This zone is a freestanding refrigerated case that contains the entire product line currently in season. The case is placed adjacent to the dairy case containing juices, in the produce department and in the service deli department at Odwalla's current retail accounts.
"People want to buy fresh juice," he said. "They are looking for an upgrade from pasteurized to fresh."
"We negotiate with farmers, select the fruit and vegetables, squeeze the juice, package the product and deliver it to the stores," said Lovejoy.
While the pint business is driving the juice sales, there are tremendous strides being made in half gallons, according to Lovejoy. Odwalla retails at about $1 more per gallon than the pasteurized competition.
