New Age "Infusion"
December 1, 2005
New Age "Infusion"
Fuze Beverage Founder Lance Collins says he got into new age beverages five years ago because he was at a point in his life when he was looking for healthier food and beverage options. Like every good “idea guy,” he used that interest as an opportunity to make his own mark on the category. With the tagline Healthy Infuzions, Collins launched the Fuze brand, and in a relatively short time has infiltrated key markets nationwide, built a team of new age sales veterans, and partnered with some of the biggest distribution names in the business. Beverage Industry recently joined the Fuze team in its largest market, Tulsa, Okla., to see firsthand how the company has “infuzed” the marketplace with its presence, and why Fuze has resonated with consumers.
At first glance, Tulsa might seem like a surprising location to be the lead market for a beverage with a decidedly healthy message. This is America’s heartland, after all, not southern California or another traditional health food market. But Collins, who is based in Englewood, N.J., says people in that market, and all over the country, want to be healthier and are receptive to products with a healthy message.
“People don’t want to get sick,” he says. “They want to live longer, healthier lives. They’re watching what they eat and drink, and they want to make the change. It’s happening here [in Tulsa]; it’s happening everywhere. It’s a cultural shift.”
Of course, the company’s choice of a powerful distribution partner in Great Plains Coca-Cola is as important as any healthy desire among consumers. The alliance helped the brand take over the top seven spots in the new age category, according to ACNielsen, and the No. 2 spot in ready-to-drink tea in its first year in that market. In total, the company has moved more than 400,000 cases through the area.
Collins says the company’s increasing maturity also helped the successful market launch. Learning from its early new age competitors, Fuze avoided SKU overload by launching only its top-sellers in the market.
“We’ve evolved as a company as far as SKU rationalization, and as we’ve evolved, we’ve refined our company to 12 really great-selling SKUs,” he says. “So Great Plains launched with our best SKUs, plus the dominance they have in the marketplace helped.”
The Fuze lineup includes the Slenderize platform, which quickly is becoming its best-selling line; the dairy-based Refresh flavor platform; fruit-flavored Essentials; ready-to-drink green and white teas, which were introduced this year; and the new NOS energy drink.
All of the Fuze products contain a hearty dose of vitamins and minerals. Slenderize also contains a metabolism-boosting blend of Citrimax, chromium and l-carnitine, and the Refresh line adds calcium. The tea products also contain folic acid and natural polyphenols — in fact, they carry the ORAC symbol (which measures the Oxygen Radical Absorption Capacity, or antioxidant activity, of a product) and claim to contain the equivalent of three servings of fruit or vegetables. They also are formulated to contain less sugar than most ready-to-drink products, with 60 calories per 8-ounce serving.
Collins, who has a background in the beer, wine and spirits industry, is the driving force behind Fuze’s product development, and says the Fuze products differ from other new age offerings in that they contain more juice and are sweetened only with crystalline fructose or sucralose. In addition, the company takes special pride in the product’s packaging. Design partner Paula Grant helped found the company, and is responsible for the eye-catching product labels. This year’s White Tea introduction, which combines flavor, high nutrient levels and art-like packaging, is an example of what Fuze does best, Collins says.
“We’re very proud of what’s in there,” he says. “Look at the vitamin and flavonoid content. It’s second to none. I think it embodies our spirit and our mission at Fuze.
“We spend a lot of time on our formulas and a lot of time on our taste,” he continues. “It’s very tricky to get a product to taste good if it’s got so many nutraceuticals in it. That’s key. Once we get it tasting good, then we design it.”
A Fuze product has about a year to prove itself before it is bumped from the lineup, and the company frequently evaluates its products to ensure they are working in the market.
“We do SKU rationalization as a team,” Collins says. “We know what’s selling and what’s not selling. Some stuff sells well in one region and not another, but we make our decisions based on what our sales team wants.”
Fuze’s current retail mix is tipped toward the grocery channel thanks to the popularity of Slenderize among female shoppers. Its grocery sales increased 121 percent during the past year vs. a more measured, but still impressive, 34 percent in convenience stores. The company plans to roll out multipacks for grocery next year using new PET technology with hidden heat panels, and the convenience channel can expect to see a new male-targeted energy offering.
Knowledge of the market
Helping Fuze ignite the marketplace is its sales team, most of whom hail from new age predecessors such as SoBe and Snapple. Two-thirds of Fuze employees are spread throughout the country, working with distributors and retailers. The company is divided into three regions — a western division; the Midwest, which stretches south through Texas; and the eastern division. The veteran team has created a hybrid distribution system consisting of soft drink bottlers, such as Great Plains Coca-Cola, and beer wholesalers.
“The regions are very decentralized,” says Bill Meissner, chief marketing officer at Fuze. “There are SKU nuances unique to each region. By decentralizing flavor [SKU] selection and promoting autonomy in those regions, we can take advantage of regional flavor preferences, leveraging the breadth of SKUs.”
The company makes use of aggressive sampling and grassroots marketing to reach consumers, and is beginning to move into more traditional mass market advertising.
Todd Gibson, vice president of Midwest sales, who oversaw the effort in Tulsa, says Fuze and Great Plains used consistent marketplace execution and sampling opportunities get in front of consumers in the area.
“The product sampling was huge,” he says. “We brought in two full-time people and all they did was sample. We sampled more than 400 accounts in the first 40 days, and the second 40 days, we went back. We didn’t just touch them once.”
Fuze has eight sampling teams around the country and plans to increase that number to 20 in the coming year. “We recruit marketing talent locally. Once hired we bring them to New York where we indoctrinate them in Fuze culture and train them to be great guerilla marketers,” Meissner says. “During the weekdays, our marketing teams focus on retail, and on the weekends, we’re showing up at consumer events.”
The company also plans to team with big-name marketing partners next year such as a well- known late-night TV personality and the Island Def Jam Music Group.
“I’m certain that Fuze is now to the stage where we have to think about driving more lifestyle into the brand,” Meissner says. “This late- night personality is a property that a lot of women on the younger side of our demographic really identify with. The Island Def Jam agreement is for a series of events — parties and CD releases or when they have a hot new band breaking out. We’re going to try to align ourselves with artists that match our messaging and demographics.”
One demographic that is new to the company is the energy drink consumer, particularly the race-car-loving demographic of its new NOS energy drink. NOS was the brainchild of the eastern region Fuze sales force, led by John Kenneally, and while there were a few people who initially worried that the product did not fit with the Fuze brand, Meissner says, “It’s been a real hit for us.”
NOS stands for Nitrous Oxide Systems, which are used in hot-rods and various other motor sports to provide an extra power boost. Fuze licensed the NOS logo, which is well known to racing fans, for its new energy drink, and made it available in regular and sugar-free varieties.
“When we came out with this, we had instant success,” Gibson says. “This is the single fastest-growing SKU we’ve ever had and there hasn’t been a lot of marketing behind it. It’s selling on its own merits.”
Collins says the company’s ability to take an idea, such as NOS, and run with it is its greatest strength. “We’re small enough to listen and large enough to react fast,” he says. “In terms of speed of innovation, we’re by far the leader. I peruse every container company and ingredient company. If we want to do it, we do it. It’s not like we have 20 or 30 focus groups. If we have an idea, chances are, it’s going to come out.”
Collins says the typical time from concept to store shelf is three or four months. On the drawing board for early next year is a line of flavored waters called Fuze Water Plus. “It’s going to be an enhanced water, with state-of-the-art proprietary packaging,” Collins says. While he didn’t elaborate on details of the product, it’s a safe bet that it, like everything else Fuze has done, will take the idea of “better for you” to another level. BI