Cranberry juice is embarking on a sales-growth spurt thanks to a wave of new, 100%-juice products and to an effective lid on prices -- and even some scattered price reductions -- because of a glut of the tart little berry from this fall's harvest. And, supermarket beverage managers are making shelf space for cranberry drinks as American consumers' thirst for them continues to grow.
"There's a real desire for cranberry-juice products by our customers right now," said Mona Golub-Ganz, consumer and marketing-services manager for Price Chopper Supermarkets, the 95-store chain based in Schenectady, N.Y.
"It's changing the mix in the juice category, which overall just continues to burgeon with new items anyway."
Like other supermarket category managers, Golub-Ganz credits much of the increased froth in the cranberry-beverage market to consumer and trade excitement surrounding a growing array of 100%-juice products. Traditional cranberry-juice "cocktails" -- such as those that made the Ocean Spray brand a household name -- include corn syrup and other ingredients in addition to cranberry juice, which in its pure form is too tart for most consumers to handle. The new all-juice products typically mix cranberry juice with apple, grape, raspberry and other, sweeter juices.
Sales for the all-juice cranberry-beverage category were up more than 72% from the prior year for the 52 weeks ended July 18, to nearly $200 million, according to the Chicago-based research firm Information Resources Inc. Meanwhile, sales of cranberry-cocktail beverages -- while overall much larger at nearly $750 million for the period -- tailed off by 0.9%, including an 11.5% decline in Ocean Spray's stalwart cranberry-juice cocktail products, down to $410 million for the period.
"And this [all-juice] is a product line that has a very positive outlook for the future, too, because of the implications and consumer perceptions that the all-juice product is healthier than the cocktail product," said Gary Hemphill, vice president of Beverage Marketing Corp., the New York City-based beverage-marketing consultancy.
Jennifer Goldston, a spokeswoman for Lakeville-Middleboro, Mass.-based Ocean Spray Cranberries Inc., confirmed: "It's been a highly successful category because these products deliver the quality and nutrition that people are expecting."
Because it still dominates the cranberry-beverage business with 53% of the overall market, probably the primary reason for the surge in 100%-juice sales this year has been the much deeper commitment that Ocean Spray made to the category this year. The company last year launched its own 100%-juice brand called Wellfleet Farms, named after the famous Cape Cod site. But only when the company began calling the line "Ocean Spray" early this year did the line have much of an effect. And now Ocean Spray is spending nearly all of its $75 million to $100 million in marketing communications over the next year to back its 100%-juice products.
"It was a market we just couldn't ignore," Goldston said. She admitted that Ocean Spray had been considering a more forceful presence in the 100%-juice market "for some time" but had held back for a while because "the one thing that's most important to Ocean Spray is always delivering high-quality products. If it takes us a little longer sometimes, we're willing to put in the time to do that. But the market trends now are that Ocean Spray is the No. 1 brand in this category in less than a year."
However, according to IRI statistics, again for the 52 weeks ended July 18, Ocean Spray's Wellfleet Farms 100%-juice products generated $48.7 million in sales while the market leader, the 100%-juice line produced by Northland Farms Inc., had 34.5% of the market and nearly $104 million in sales.
Indeed, many analysts credit tiny, Wisconsin Rapids, Wis.-based Northland for jump-starting the then-moribund 100%-juice category a couple of years ago. Northland -- which until then largely had been known as a grower-dominated company that mainly supplied raw cranberries to Ocean Spray and to private-label processors -- made a huge gamble at that point by staking its bid for a national retail presence, from scratch, on 100%-juice products.
It has raced into 27,000 supermarkets across the country, most of them before Ocean Spray really did anything to respond.
Indeed, Northland says that its 100%-juice products achieved a 13.8% dollar-market-share of the shelf-stable cranberry-beverage category in supermarkets for the 12-week period ended Aug. 15, representing a slight gain in market share over the comparable period last year. The increase came "despite heavy promotional activity by our competitors," noted John Swendrowski, the former high-school football coach who heads Northland and who has been spearheading its transition into a consumer brand.
Doug Murphy, director of grocery merchandising for Martin's Super Markets, a 16-store chain based in South Bend, Ind., said that Northland has picked up much of the marketing slack in Ocean Spray's absence and has had "very effective advertising and promotional activities, such as very good FSI coverage."
Tom Pirko, president of Bevmark, a New York City-based beverage-marketing consultancy, said that the success of Northland's bold incursion into the retail juice aisles surprised Ocean Spray. He said, however, that Ocean Spray also has become overly conservative in its approach to growing a cranberry-juice market that it has controlled -- basically uncontested -- for so long. One big reason for that, he said, is that Ocean Spray's previous marketing arrangement with PepsiCo fell apart after PepsiCo acquired Tropicana Beverages, which is marketing its own blends, including cranberry juice.
"The consumer had just gotten used to not hearing about cranberry juice because the marketing no longer was there from Ocean Spray to reinforce it," Pirko said. "There just hasn't been enough of a big-time marketing kick."
Such marketing absence is especially inopportune considering how well cranberry juice -- with a venerable reputation for medicinal-type effectiveness against urinary-tract infections and other digestive disorders -- fits into the strong recent trend toward "functional" beverages with specific health-enhancing properties. Other critics have noted that Ocean Spray has done little to promote consumption of cranberry juice abroad; about 95% of it still is consumed in North America.
Thus, without the 100%-juice surge, the entire cranberry-beverage category would be much less attractive to supermarket category managers. But Golub-Ganz and other managers said another contributing factor to their enthusiasm for the category is that Ocean Spray, Northland and other brands are holding the price line as the cranberry glut grants them enough slack to absorb any other cost increases without having to boost retail prices. Some private-label lines, she said, are even cutting prices a bit.
Murphy, of Martin's Super Markets, said that an additional prod to the growth in sales of 100% cranberry juices has been the fact that state food-stamp programs have included the product line in covered items.