LIQUID BURST

KELLY GATES

Consumer demand for more flavorful and, more importantly, nutritionally enhanced beverages, has prompted the launch of a number of unique drinks in recent months. These new introductions, as well as stalwarts, continue to keep many beverage subcategories afloat in terms of sales.

Water is one category that has been doing well for years and isn't expected to slow down anytime soon. According to Gary Hemphill, senior vice president of the Beverage Marketing Corp., New York, water has been a strong-performing category for over a decade with volume and sales increasing between 8% and 12% annually.

"We expect this steady increase to continue for at least the next five years or so, with the strongest growth in the single-service sizes of noncarbonated water," he said.

The proliferation of package sizes introduced over the past decade is one reason sales have continued to increase. Enhanced waters with added nutrients have also fared well, particularly Glaco vitamin waters, said Hemphill, who added that this segment of the water category tends to sell more frequently as a single-serve product rather than a multi-pack, and in smaller grocery outlets and convenience stores vs. larger chains.

Energy drinks are also a hot segment, said Hemphill. "Anything that enhances energy or includes added nutrients, vitamins, resembles a health benefit or promises an enhanced feeling has been a big seller for the past few years," he said. Beverages like Red Bull, SoBe and vitamin-enriched and fruit-flavored teas continue to increase in sales, particularly those that focus on teenagers.

Although Hemphill describes the overall performance in the soft-drink category as being "lackluster," several new products have recently been launched in this area in an attempt to boost sales. "Mountain Dew's new Code Red has done well so far and Coke and Pepsi just introduced lemon-flavored versions of their flagship brands," he said.

"These are all still in the trial phase, so it will take a while to determine their staying power in the category."

Grocers around the country have also taken note of the new drinks in their beverage aisles, while acknowledging the growing interest in other products launched several years ago.

"The biggest drinks that have hit the market in the past year or so are the Pepsi and Coke products with lemon flavoring and a few take-offs of existing energy drinks," said Kevin Copper, store manager at Sterk's Super Foods, a grocery chain in Hammond, Ind.

"A take-off from Red Bull, we have Blue Ox and another energy drink called Venim, but on average, people seem a little more interested in the new soft drinks than the energy boosters," he said.

According to Copper, both Pepsi and Coke have held in-store demos to introduce their new fruit-flavored sodas to consumers. They've also put up shelf-talkers in the aisles to draw attention to the beverages.

Skip Moreau, store manager for Highland Park Markets in Glastonbury, Conn., concurs that the new soft-drink flavors have been a big hit.

"We also sell a lot of SoBe [and] Arizona stress-reducing iced teas; bottled water with added calcium has sold very well."

Moreau said his store doesn't carry other energy drinks like Red Bull, Blue Ox or Venim, but stressed that local consumers definitely express an interest in fortified drinks or those with added benefits.

Along with shelf-talkers in the aisles, Moreau said most of the companies that have recently launched new beverages, including major soft-drink companies, prefer to stock their product on endcaps. However, as Highland Park Markets is tight on space already, endcap displays aren't a possibility.

And, instead of promoting their new products separately in Highland Park's weekly circulars, both Coke and Pepsi opt to include all of their products within the same ad, he said.

Wild Oats, a supermarket focused on natural products and based in Boulder, Colo., carries an all-natural line of beverages. According to Sonja Tuitele, spokeswoman for Wild Oats, no beverage hits the shelves in the chain's 109 stores unless it meets strict natural food-product guidelines.

"We acquired a few stores that sold soft drinks, but once we bought them we immediately got rid of those products because we only sell products with natural ingredients," said Tuitele. "We won't sell anything with partially hydrogenated oils or artificial flavors or colorings because our consumers, like a growing number of consumers in general, want healthier, more natural beverages."

According to Tuitele, many of the beverages carried by Wild Oats are now seeping into conventional grocery stores as more and more consumers show an interest in natural products. In response, some stores are adding natural food sections, which include beverages.

"We've seen some of the same beverages we sell in conventional stores lately," she told SN. "We carry a line of juice from Mountain Sun and Santa Cruz, and drinks like Blue Sky and our own Wild Oats soda, among others."

Wild Oats also has a line of private-label juices, bottled teas and bottled waters, said Tuitele. To promote manufacturers' products as well as their own private-label beverages, Wild Oats has an educational center called "Did You Know?" that informs consumers about the products sold in its stores.

Unlike most conventional stores, Wild Oats does not permit manufacturers to hang shelf-talkers or additional signage. It does, however, hold in-store demos for consumers to taste various products, and Tuitele said most manufacturers promote their beverages in the chain's weekly circulars.

During a recent store visit to a Meijer location in west Michigan SN found a wide assortment of beverages, including everything from hot and cold teas, sports and other enhanced drinks, juices, bottled waters and children's drinks. The tea section boasted a wide array of green tea boxes that occupied nearly half of the shelf space.

While most of the beverages were simply placed side-by-side on shelves, two separate displays distinctly interrupted the otherwise mundane aisle setup.

Sandwiched between the teas and nutritionally enhanced energy drinks was a gourmet coffee display which included several rows of Starbucks coffee, bottled iced frappaccino packs and a few additional upscale coffee products from mainstream brands like Folgers. Packages of coffee were arranged at various depths on shelves, making the entire section highly dimensional as compared to standard, flat-front shelves.

On the opposite side of the aisle, was a vibrant Gatorade section framed on either side by thin, bright yellow signage strips that reach from the top shelf down to near ground level. Hovering on the top shelf on the day of SN's visit was another Gatorade sign bearing information on a promotion sponsored by the sport drink manufacturer.

Displayed along with Gatorade and Powerade beverages were the company's line of energy bar products. And, to draw attention to its Powerade drinks, Gatorade featured on-pack coupons draped over the neck of each bottle.