Thirsty for Change

CAROL ANGRISANI

Wegmans Food Market's Aqua-V vitamin waters don't just taste good, they're the best-tasting beverages of their kind in the store.

That's according to shoppers, who preferred Aqua-V lemonade and fruit punch over the leading brand in blind taste tests.

The retailer emphasizes the achievement by placing “Wegmans — Great Taste Wins” shelf signs under both flavors.

While the lemonade and fruit punch earned the highest kudos, a variety of other Aqua-V flavors — like Dragon Fruit Acai, Blueberry and Pomegranate — are also capturing shopper attention. All of the varieties are sold in resealable 20-ounce plastic bottles in singles and six-packs.

Wegmans, Rochester, N.Y., is marketing the water to exercise buffs, as well as to those who simply want a healthy beverage at work, in the car or anywhere else.

“Replenish your body with the thirst-quenching alternative to plain water that's dripping with the vitamins and minerals your body has been screaming for,” packaging reads.

The popularity of Aqua-V comes at a time when other private-label vitamin and fitness waters are making a splash.

Among them are a private-label dry mix from Grand Rapids, Mich.-based Meijer that can be turned into vitamin water by adding water. Winn-Dixie Stores, Jacksonville, Fla., also launched a line of store-brand vitamin-enhanced waters in 2007 in four varieties: Vitality Fruit Punch, with vitamins C, B-12 and B-6 complex; Endurance Kiwi-Strawberry, with vitamins C, B and A, and lutein; Energy Tropical Citrus, with vitamin C, vitamin B complex and guarana; and Strength Dragonfruit, with taurine, zinc and vitamin B-5. Food Lion, Salisbury, N.C., markets popular zero-calorie waters that come in three flavors: Kiwi Strawberry; Dragon Fruit and Orange.

The trend is cutting across channels as convenience store chain 7-Eleven, Dallas, plans to launch three stockkeeping units of vitamin-enhanced water next month, according to spokeswoman Margaret Chabris.

The new vitamin waters are part of a growing emphasis on private-label beverages — and other items — at 7-Eleven.

“We continue to develop lines of private-label beverages,” Chabris noted.

The chain's private-label spring water, for instance, is a particularly strong seller. Formerly sold under the Classic Selection name, it is now marketed under the 7-Select brand. It commands about 34% of the chain's total bottled-water sales.

Other new beverages have recently made their debut under the 7-Select brand. They include apple, orange, cranberry and vegetable juice.

“Sales already are exceeding our expectations,” Chabris said of the juice.

And 7-Eleven is not finished: It plans to roll out four flavors of bottled tea this month.

The chain may also get more involved with private-label energy drinks. In 2007, 7-Eleven introduced a proprietary energy drink — Inked — that targets the tattooed community. Sold in 12-ounce cans bearing logos of traditional tattoo designs, Inked was launched for $1.99 in two flavors: Maori Citrus Chikara and Tropical Grapefruit.

Although it remains on the shelves in Canada, Inked isn't available domestically since 7-Eleven “sold through the quantity we had in the U.S.,” said Chabris. Although she didn't provide specifics, Chabris hinted that the company may get back into the category.

“We are revisiting a private-label energy drink now that private-label products are selling so well,” Chabris told SN.

Such a stance comes as the overall future of energy drinks looks promising. Since the energy drink market is still young, it has the potential to attract new users. Energy drink consumers age 18 and over grew 14.8 million to 34.4 million between 2003 and 2008.

But the category is not without its challenges. Today's weak economic conditions are having an impact on the energy drink market. Whereas a July 2008 Mintel report predicted it would grow 13.3% from 2008 to 2009, a reforecast issued last month said due to the economy, the 2008-2009 growth will be much smaller at 1.5%.

Much of that has to do with price-sensitive shoppers shifting to less expensive types of beverages.

Indeed, the high price of national-brand energy drinks is the biggest barrier of consumer trial and acceptance, according to Mintel. Energy drinks are the second-priciest non-alcoholic beverage after ready-to-drink coffee. While energy drink prices declined 32% to $18.15 per gallon in food, drug and mass from 2002-2007, the cost still remains 258% more than the third-priciest non-alcoholic beverage: fruit juice.

Most energy drinks cost about $2.27 per 16-ounce bottle.

The price factor spells opportunity for supermarkets. While convenience stores remain the top retail outlet for energy drinks, supermarkets are capturing sales from consumers who are balking at spending a lot of money on a drink.

One-quarter of all energy drink users feel that energy drinks are very expensive, and try to buy them at supermarkets or wholesale clubs to save money on multipacks, which offer an approximate 20% savings, according to Mintel.

While national-brand multipacks certainly provide a savings, a private-label multipack offers an even greater value. That's why some retailers are launching their own energy drink brands.

Take Food Lion, which markets the Blue Streak energy drink line. Blue Streak launched in 2006 in single cans, followed by four-packs in 2007.

“We are one of a few in our industry with its own private label for energy drinks,” said chain spokeswoman Christy Phillips-Brown.

Food Lion currently sells Blue Streak in four-pack cans and single-serve drink straws that can be added to bottled water. Both are available in regular and sugar-free.

The fact that Blue Streak is available in sugar-free is a smart move since there's growing concern about the sugar (and caffeine) content in the beverages, observers say. Among adults who have not had an energy drink in the past three months, 32% said it was because they are too sugary and 33% said they contain too much caffeine. Most energy drinks contain as much sugar as soda. This is one of the reasons why energy drink penetration among women is lower than men.

Along with energy drinks, Food Lion is emphasizing other store-brand beverages, including green tea, 100% juice enhanced with vitamins, and organic beverages for kids.

Food Lion is launching a new line of unique juice flavors, including acai berry, strawberry-banana and pomegranate-blueberry.

“Over the past several years, we have continued to make strategic investments in our private labels, including new product development, new packaging and continuing to enhance the quality of all private-label brands,” noted Phillips-Brown. “We believe consumer adoption of our private brands will continue to grow.”

While water and juice are performing well, Food Lion's best-selling non-alcoholic beverage is carbonated soft drinks.

It offers 16 different flavors of soda, including innovative flavors such as strawberry and orange pineapple.

Specialty CSDs are making a statement at other retailers, too. Retailer-owned wholesale grocery co-op Unified Grocers' year-old Natural Directions natural and organics line includes such selections as Italian Lemon soda, made with juice from organic Sicilian lemons. The soda is produced using 12% organic fruit juice and organic sugar.

Natural Directions includes a variety of other specialty juices, like Acai-Aronia juice that combines the juice of the Brazilian acai fruit with the juice of the Native American aronia berry. High in antioxidants, Acai-Aronia juice has no added sugars, and is a natural source of flavonoids, fatty acids and Vitamin C.

Such offerings come at a time when Unified, Commerce, Calif., is giving a lot more attention to private-label beverages in general.

“We know it's one of the hottest trends just based on the proliferation of the new items being introduced,” said Dean Allen, director of procurement/marketing for Market Center, a Unified subsidiary that distributes organic, ethnic and other specialty products.

Despite all the talk about New Age beverages taking away share from CSDs, private-label CSDs are outperforming the CSD category as a whole.

Private-label CSDs generated $844 million in dollar sales at food stores with more than $2 million in sales for the 52 weeks ending April 18, a 10.2% increase over the same period the previous year, according to the Nielsen Co.

In comparison, the entire CSD category had $12.4 billion in dollar sales for the same period, flat when compared to prior-year sales.