analysis by Sheila Eggleston
- annual consumption tops 1 bn litres
- plenty of room for growth
- four multiples take 69% of sales
- juice a predator among soft drinks
Juice is one of the rising stars in the grocery industry. But while juices have had a good year, juicedrinks have not fared as well.
Adult juice drink sales have been buoyant up 14.5% year on year to £31.1m [AC Nielsen], but the £97.3m children's juice drinks sector has slumped by 33.6% because of the fall in sales of last year's star performer Procter & Gamble's Sunny Delight.
The drink's sales are down 37% year on year, although it stays top of the brand league.
Juice has become a serious challenge to other soft drinks and hot beverages, and retailers and manufacturers have made it a sparky category to shop, appealing to time pressed but affluent shoppers wanting their daily dose of vitamin C in one easy fix.
Total juice sales accounted for 31.2% of soft drink sales last year and, according to Tropicana, the chilled fruit juice sector has more than doubled in 10 years to £267.6m, with Not From Concentrate (NFC) continuing to drive growth.
A distribution tie up with Müller yogurts has increased Tropicana's penetration by up to 18%, and it is now re-evaluating the category with Müller.
Vice president/general manager Gordon Bromley says: "We're keen to break out of the traditional store layout and move the fixture around.
"We've run some interesting front of store tests with other Pepsico brands around snacking occasions, and this month we've taken on a third party sales force to visit the top 750 stores to track and audit how things are going."
An interesting development will be the new Coca-Cola/Procter & Gamble alliance. When its new snack and juice company comes on board, Minute Maid pure juice may find its way back into the UK market.
In June 1999, Coca-Cola's Minute Maid was squeezed out of the chiller by Tropicana, and the company said then that it had been withdrawn, not discontinued.
Ray Crockett, US director of communications for The Minute Maid Company says: "The door is still open. But we don't know how things will go until the new company shapes up."
"Minute Maid will combine with P&G into the new company and Minute Maid will be responsible for the international business for Coca-Cola, but we still have regulatory approval to gain."
Satisfying consumers' thirst for premium healthy drinks has led manufacturers and retailers to bring in more exotic flavours, juice drinks with a higher juice content and convenient pack formats. For many years orange has been the most popular fruit juice, but has now been superseded by the demand for more unusual flavours and blends.
Smaller packs drive the food to go trend and Del Monte says a big area for growth is the one shot.
The company took last year out to consolidate and review the position of its Del Monte and Just Juice brands in the juice market and, in readiness for 2002, it is looking at more added value and more exotic types of fruit drinks.
UK md Edwin Petrie says: "Last year we added pressed apple to our range and we have seen volume grow, and we are now looking at pineapple based drinks."
"One shot was a new venture for us last year and we are looking at it again.
"Pure juice is healthy but you can only drink so much juice in a day, therefore a juice drink with a juice content of up to 32% or higher, could be the answer."
This year the company will again support its "Fruity Way Towards Five a Day" campaign to encourage fruit and veg intake that's easier to swallow in a glass.
Princes Soft Drinks claims there has been a massive 25% year on year increase in expenditure within the pure chilled juice sector showing people are buying more often from the chilled fixture.
In January, its tie up with Capespan International produced Outspan chilled NFC orange juice in two variants smooth and juicy bits and it is about to launch a 250ml handy size.
Princes says Outspan is the second largest fresh produce brand in the UK and its heritage has helped to woo consumers.
But seasonal peaks and troughs must be exploited to the full, says marketing controller David Patmore, and merchandising ambient and chilled juice and juice drinks together maximises sales.
"Sales of orange and apple will always dominate the sales mix, but in the summer it can be useful to experiment with exotic flavours such as lychee, passion fruit, mango, and apple and peach, plus breakfast juices," he says. "Trips out and holidays affect mini juice and juice drink sales, while half terms and back to school periods need promotional slots for minis to boost sales."
Princes has moved its mini juice drinks orange, tropical and apple and blackcurrant from 250ml to 288ml in response to the demand for larger impulse packs, but kept the price at 69p. This month it is running a 25% extra free promotion on 250ml mini juices, while a trial run of 50% extra free on Princes long life orange and apple brand is planned for the summer.
Gerber Foods Soft Drinks is backing its new Ocean Spray in 500ml PET with a TV campaign in May, part of its £7m spend on the core brand.
Gerber, which manufactures Ocean Spray and Libby's brands, recently purchased the German soft drinks company Emig, making it the largest juice company in Europe. It claims cranberry is the second biggest selling flavour in the ambient juice and juice drink sector, after orange. Its bestsellers are cranberry, followed by cranberry and lime, and cranberry and passion fruit.
Its latest coup has been to move into the ethical arena with the first Fairtrade long life pure fruit juice which guarantees a fair price to growers in developing countries.
Called Fruit Passion, it is available from May in three variants: breakfast, orange and tropical and retails for £1.09 a litre. Marketing director Rob Spencer says: "We are at the forefront of developing this market. Fairtrade is like organic another issue on which consumers can take a particular stance. But we call it trade, not aid because we're trying to help growers to help themselves.
"One of the things we want to do is to identify more growers of other fruits and bring them into the Fairtrade arena."
Organic too has played a major role for Gerber. Own label dominates the whole juice market, and in organic juice worth £14.3m, up 11.5% year on year own label accounts for more than half the market.
Gerber went national with Libby's organic long life juice in 1999 and, as one of the biggest own label suppliers, has become a significant player in this area too. Spencer says the success of the brand has encouraged retailers to develop their own ranges.
"Until we came on the scene it was a niche product. Household penetration of organic juices is still low whereas juice overall is more than 90%, and the way to increase penetration is to make space among standard products."
Two new Libby's organic juice drinks are launched this month citrus, and apple and blackcurrant in one litre cartons retailing at 99p.
Last year Princes launched an organic juice range and expects its value growth to outperform the market. And German company Dan International has now included an organic orange juice under its Bertram label.
Tropicana and Del Monte have no plans to go organic but haven't ruled out functional drinks. The sector is growing, particularly in the fortification area, whereas the traditional breakfast sector is in decline.
Tropicana Calcium accounts for 4% of all Tropicana orange sales. Tropicana Multivitamins, containing six vitamins and a blend of 12 juices, was launched in September and now outsells the calcium variant. "Purchase is geared by health now," says Bromley, "Multivitamins will sell more because of its broader appeal."
Smoothies is another growth area. Pete & Johnny is backing its P&J fruit juice super smoothies with £1.5m this year. The company recently branched into fresh chilled pressed apple juice using new technology that bypasses the need for pasteurisation and guarantees a shelf life of up to 15 days.
Four non dairy 100% fruit smoothies made from crushed mango, peach, passion fruit and raspberry are the latest lines from The Juice Company. Aimed at convenience and food to go sectors, Smoothiepacks come in three sizes of Tetra Brik cartons.
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