DRINK TO YOUR HEALTH

BARBARA MURRAY

Even though there is still some confusion over what defines a New Age beverage, retailers are in growing agreement that such drinks are increasing in the supermarket channel.

John Bisio, a spokesman for Wal-Mart Stores, Bentonville, Ark., said the chain's buyers and customers have the most interest in "drinks that have a benefit." To him, New Age refers to a drink that provides something extra such as energy or enlightenment. He mentioned SoBe, Snapple and Guzzler, a fruit-flavored spring water drink, as creating interest among the buyers. "We've seen real interest [in New Age beverages], and we're in it for the long haul. It's [perceived as] one of the things that are good for you, with herbal supplements and vitamins."

Information Resources Inc., Chicago, puts the New Age Beverage category at $438,268,670 in sales for the 48 weeks ended Dec. 5, 1999, a 14.8% increase over the prior period, measured in the food channel only, unlike its usual reports that show all three channels. The 14-brand category ranges from Snapple at the top with $174.8 million in sales, SoBe second at $53 million, followed by AriZona, a tie between Ocean Spray and Lipton for fourth place, V-8 Splash, Fruitopia, Nestea, Mistic, Hansen's, Nantucket Nectars, Red Bull, Mad River and Red Devil.

Unit sales of the total category -- which were 483,842,832, almost the same as dollars, since the average unit price is 96 cents -- were also up, by 8.4%.

"New Age lives in the single-serve case, which is usually not the grocery store," pointed out Tom Pirko, president of Bevmark, a New York City-based product development and marketing consultancy. Randy Papadellis, senior vice president of marketing, Welch's, Concord, Mass., countered that "single serve is becoming more of a supermarket thing" and that single-serve beverages' growth in the grocery channel is improving. "You'll find it in the deli section, in the regular juice aisle, and in many cases you find it at checkout now," Papadellis said.

Grocery is growing, agreed John Bello, chairman of South Beach Beverage Co., Norwalk, Conn., makers of SoBe. He says the grocery channel represents only about 20% of his company's sales. SoBe's biggest channel is the C-store, but boosting sales in grocery stores is a priority for this year.

Bello explains that "healthy refreshment" is SoBe's tag line, and says it's the value-added component -- be it ginseng, soy, St. John's Wort, amino acids, or vitamins and minerals like selenium, calcium and the fat-burning chromium -- that define "New Age."

"Everybody wants to be stronger, smarter, skinnier. Our whole principle is to add value, such as, to add soy, which the FDA recently approved as heart-healthy. We do whatever we can to come out with a product that features hot new ingredients, and that tastes great," Bello said.

South Beach is currently the brightest star in the New Age sky, having increased its sales from 5.4 million cases in 1998 to 14.8 million last year, while its dollar sales jumped from $67.3 million to $166.4 million, as the company says. In 2000, SoBe's volume is projected to go beyond 22.5 million cases and sales are projected to pass the quarter billion dollar mark, according to the company, which is said to be for sale.

As beverage manufacturers removed the perceived negatives of carbonated soft drinks, like caffeine, carbonation and phosphates, they charged more for what was left, leaving a niche that was about 10% of the total beverage category and that provides retailers with higher margins than Coke or Pepsi.

J.B. Pratt, whose stores in Oklahoma City emphasize whole health, said "we carry most of those things, but I am not sure what the movement figures are. We sell a lot of sodas without the preservatives and the phosphates that fit into the natural and organic category." Blue Sky, a natural, organic carbonated soft drink, "is a significant category for us," he said, adding that he thinks some consumers are switching to drinking water instead of soda or New Age beverages.

"Is it food or is it medicine? That is confusing to the customer," Pratt said. "It's too hard to try to take your tonic along with your drink. But we make a lot more margin on the specialty beverages -- a good reason to sell them."

When SN visited a Draeger's Marketplace in San Mateo, Calif., last month, there was a SoBe Healthy Refreshment display on a five-shelf rack at the end of one aisle, with bottles priced at $1.29 for 20 ounces. Fancy cookies, wine, bulk candy and gift baskets were nearby, and on the aisle were waters, jams and jellies, peanut butter, and cold soda.

Assistant manager of that store, Keith Myers, who also is the beverage buyer, said "SoBe Soy is within our sort of health drinks, but they and Nantucket Nectars soft-sell the corn sweetener aspect, and since it looks new, they push the health aspect."

A regional brand, Drinks That Work, based in Santa Cruz, Calif., had been demonstrated in the store pretty heavily, he said. Those drinks are along the nutraceutical line because they have some biological effect. "They have one to wake you up, one to calm you down, and one, Luna, puts you to sleep," Meyers said. "They hit like gangbusters, had a pretty aggressive campaign, and have simmered considerably within the past six to eight months."

Red Bull Taurine energy drinks, a booster sold in gyms, "sell quite well" in Draeger's, Meyers said. "We run a regular ad on them at $1.89; they sell them for $2.69 down in L.A., and here at that price they just blow out.

"Those types of drinks, I think, are the cutting edge. More and more companies are focusing in on them. For a [distributor] company like Coors West to pick up the whole line, makes me feel like the industry is really going to the nutraceuticals, adding vitamins and stuff to the beverages. You get a refreshing drink and your supplement."

Mike Schiavoni, owner of a small IGA in Sag Harbor, N.Y., said "There are so many items: Snapple, AriZona, Mistic. You get a lot of requests for something that's different. We brought in Nantucket Nectars, that was a good move."

Some manufacturers don't add any vitamins or minerals, believing that Mother Nature has already done that.

Papadellis told SN "We have yet to do any significant fortification; in our purple grape juice, we have all the nutrients without adding any in. The flavenoids in purple grape juice, studies show, keep blood platelets from sticking, and sticky platelets lead to heart attacks. Drinking grape juice gives people the same effect as they would get from taking an aspirin."

Welch's has been getting the word out on healthy benefits from drinking purple grape juice, aided by national network news items on medical studies. In the last four years, while two or three health announcements have boosted sales of purple grape juice, Welch's baseline sales are up 40% to 50%, Papadellis said. "I think other things have also driven that increase, but health and nutrition is a part of it. We have a very successful advertising campaign, we've gone to plastic packaging, and we've got new graphics. It's been great.

"On white grape juice, we have quite a different story," Papadellis continued. "For years, mothers have been feeding apple juice to their infants and toddlers. We have learned that white grape juice is better because it doesn't cause as much gas, so we have promoted it as a first juice."

Papadellis said "New Age is all about offering the right combination of food and beverages to optimize your health. The 80s were all about calories, the 90s all about fat. This new decade is about eating the right combination of foods, being aware of the impact it will have on my health."