Wellness Market Offers Healthy Sales Opportunites
February 1, 2006
Wellness Market Offers Healthy Sales Opportunites
By SARAH THEODORE
Getting healthy is a goal of nearly every company in the beverage industry these days, and the goal of most consumers — at least in theory. Datamonitor’s “Evolution of Global Consumer Trends” report cited health as one of the 10 mega trends shaping the global food and beverage industry. Ninety percent of consumers believe it is important to take active steps to improve health, according to the London-based research group, yet only 66 percent actually do so. Among American consumers, a recent survey by ingredient company Tate & Lyle found that 76 percent of consumers indicated a balanced diet is important to healthful eating, yet only 33 percent actually incorporate it into their own lives.
The shift to healthier products is a slow one, and most consumers will never be all or nothing eaters, says Sheila McCusker, author of Information Resources Inc.’s new report “Healthy Eating Trends: Innovative Solutions to Evolving Consumer Needs.” “It is a very slow, gradual evolution in terms of changes in purchase patterns toward healthier foods,” she says. “What consumers do, and will continue to do, is balance healthier and indulgent products. In the course of a day, they may have a higher calorie drink and a light drink.”
While the disconnect between belief and behavior might make the task of selling healthful products difficult, it also presents opportunities for beverage companies to deliver healthful products that are both convenient and flavorful — in essence, healthy products that don’t require consumers to make significant changes in their behavior.
|Healthy eating continuum
(% of consumers)
|Pay no attention to nutritional facts 24%||Eat the “good, the bad and the ugly” 30%||Eat healthy for reward with indulgent snacks 42%||Health nuts 4%|
|54% of consumers take a more haphazard approach to healthful eating||46% of consumers appear to have a healthful eating strategy|
|Source: Information Resources Inc., based on findings from Parade Magazine’s “What America Eats” survey.|
McCusker says her research showed impressive growth during the past year in light products, particularly juices, and future growth opportunities in condition-specific products. “An area of growth that is in its infancy now, but I think has the potential to explode, is targeting specific health benefits,” she says. “Diabetes [is one area] but also heart health benefits. We’re starting to see some innovation, but I think we’re going to see a lot more.
“From a consumer-targeting standpoint, we’re going to see a lot more niche marketing,” she adds. “Everything from aging baby boomers to specific chronic health segments.”
Obesity is the No. 1 health trend affecting the future direction of the food and drinks industry, but research indicates that jumping on the latest diet trend might not be the best way to capture this market. Instead, it might be more advisable to help consumers devise their own diet strategies. Tate & Lyle’s survey indicates almost half the women who say they are on a diet have created their own diets. The NPD Group found a similar trend when it conducted its annual Eating Patterns in America study, with a little more than 30 percent of consumers reporting they follow their own diet.
While the low-carb trend hit the skids last year, low-sugar and the offshoot of low-carb, low-glycemic products, still have potential for beverages.
“[Light juice] is an area that is exciting because it is underpenetrated,” says IRI’s McCusker. “Light juice products represent a very small portion of the juice market, but they are growing by leaps and bounds.”
Old Orchard, Sparta, Mich., took advantage of light juice’s potential in 2005 by rebranding its low-carb juice line as Old Orchard Healthy Balance. The products contain 75 percent less sugar, carbohydrates and calories than traditional fruit juices. Hansen’s also added new Light Low Carb Juice Cocktails sweetened with Splenda. And Ocean Spray last month announced new Diet Ocean Spray juice drinks, scheduled to hit the shelves nationwide in March.
Traditionally, light products have been less popular with ethnic consumers, but Tampico Beverages, Chicago, which finds its core consumption among Hispanics, recently added lighter Tampico Plus to the lineup.
“I get bombarded with articles about American kids and adults being overweight, articles about poor bone health, articles about the need for kids and adults to get more calcium, articles about people not eating right and not getting the vitamins they need, and lastly, articles about lactose intolerance and how it’s even more difficult for lactose-intolerant individuals to get their required calcium and vitamin D,” says Richard Ross, brand director at Tampico, explaining the thinking behind the brand. “In addition, the levels of lactose intolerance and diabetes are among the highest in the U.S. Hispanic populations, our core consumer.”
Tampico Plus contains half the sugar typically found in juice drinks as well as calcium and vitamins A, C, D and E. Unlike some light drinks, the company made a conscious effort to not use the word “diet” in the name.
“It’s much more than just a light or diet type of product,” Ross says. “Though the calorie reduction is significant at 50 percent, it is as much the functional attributes that drive the ‘Plus’ value in the consumer’s mind.”
Soft drink-makers perhaps have the most experience in the diet beverage market, and during the past year have stepped up their diet offerings. The Coca-Cola Co. expanded its diet soft drink offerings with Diet Coke Sweetened with Splenda and Coke Zero. It freshened the Fresca line with new packaging and Black Cherry and Peach flavors, punched up its venerable Tab trademark with the Tab Energy diet energy drink, and added Pibb Zero to the lineup. It also rolled out new Black Cherry Vanilla Diet Coke early this year.
For its part, Pepsi-Cola Co. put renewed emphasis on Diet Pepsi, making it the star of this year’s Super Bowl ad campaign, and reformulated Pepsi One, emphasizing its Splenda content. The company also lightened up some of its non-carbonated brands such as the new Starbucks DoubleShot Light Coffee Drink.
Cadbury Schweppes Americas Beverages revamped the Diet Rite brand, adding Pure Zero to its graphics to communicate its zero calories, zero carbs, zero caffeine and zero sodium message.
The sweet stuff
Beverage companies producing light beverages have a number of sweetener options, some of which offer little or no calories, and some that are designed to be digested more slowly for low-glycemic products. Last fall, Cargill introduced Xtend Sucramalt, a fully digestible, slow-release carbohydrate. The sweetener is derived from sucrose and maltose, and is designed to release carbohydrates into the bloodstream slowly for a lower glycemic response.
Another sweetener hoping to break into the market is Zsweet from Ventana Health Inc., San Clemente, Calif. The erythritol-based sweetener is considered a natural zero-calorie sweetener. It is less sweet than sugar — about 70 percent as sweet — but has fewer calories.
Honest Tea, Bethesda, Md., used erythritol in its soon-to-be-released zero-calorie green tea, making it the first organic zero-calorie sweetened beverage on the market. The first flavor of Honest Tea Zero is Tangerine Green Tea “With A Hint of Sweetness.”
“It’s something we’ve been working on in conjunction with Cargill, which developed the sweetener,” says Seth Goldman, co-founder of Honest Tea. “As a small entrepreneurial company, part of our role is to be out there trying the new ideas and seeing what works. This is one that hasn’t been done before.”
To communicate the zero-calorie message, Honest Tea used the USDA organic seal in the “O” and “Zero calories, Zero artificial sweeteners, Zero compromise” on the label.
Palatinose Isomalt sweetener from Germany’s Palatinit, has been dubbed the “wellness sweetener” by the company for its sugar-like taste and low glycemic response. The ingredient is a natural constituent of honey and sugar cane, and has a mild sweet taste. It is fully digested and has the same caloric value as sucrose, but is digested more slowly, helping to avoid peaks and lows in blood sugar and blood insulin.
Orafti, Malvern, Pa., also is touting the low-glycemic properties of its Raftilose prebiotic ingredient, when used as a sweetener. In addition to lowering the glycemic index of a product, Raftilose can replace dietary fat without sacrificing mouthfeel.
But cutting calories isn’t the only way into the diet market today. Some diet drinks are going beyond low sugar, claiming to actually help boost the metabolism and burn calories. Elite FX Inc., Boynton Beach, Fla., developed its Celsius brand as a calorie burner, designed to accelerate the metabolism through its “thermogenic blend of nutrients, caffeine and botanicals.”
Fuze Beverages’ Slenderize brand, and last year’s addition of Fuze Slender Energy Drinks contain citrimax and l-carnitine to help boost the metabolism. Airforce Nutrisoda Slender also is designed to manage appetite, burn fat and speed the metabolism. Ingredients include garcinia cambogia, l-carnitine and l-tyrosine, vitamins A, C, E and selenium. And Phytobase Nutritionals Inc., Orem Utah, has introduced Bon-Java LeanCaffe with 950 mg. of hoodia gordonii in each cup to act as an appetite suppressant.
A booming market
As they have for decades, baby boomers are having huge influence on the food and beverage industry today. Their health concerns as they age, and their attitudes toward well-being are reshaping the way companies develop and market products.
According to Steve French, managing partner at the Natural Marketing Institute, the top health concerns for boomers are: heart disease, cancer, weight gain, memory loss, lack of energy, arthritis and joint health, restricted mobility, vision problems, diabetes and sexual dysfunction.
“It’s a pretty well-rounded list of health issues,” he says. “You can be rich or poor, but if you don’t have the energy to do the things you want to do, it’s all sort of moot.”
IRI’s McCusker says her study found significant differences between boomers’ attitudes toward health and the general population, and even differences between younger and older boomers.
“When you split the boomer generation in two — under 50 vs. over 50 — there are huge differences in attitudes toward health,” she says. “Older consumers are far more concerned with health because they are starting to face more health issues. [They also] have a greater tendancy to purchase light products, to worry about chronic disease and purchase things with a [functional] benefit.”
In addition, IRI found changes in purchasing behavior due to the empty nest phenomenon, leading consumers to gravitate toward premium products and smaller portions.
NMI’s French says it’s important to not assume boomers are looking for the fountain of youth, but for ways to age well. “Boomers aren’t superficial youth seekers,” he says. “They’re looking at the role of health care, both conventional and alternative; they’re looking at foods and beverages; they’re definitely looking at supplements and what kinds of vitamins and minerals are important; exercise; stress and so on. They’re probably more holistic, taking a look at the whole variety of things you can do.”
When it comes to receiving health information, doctors rank at the top of the list of experts for boomers. They also seek information on the internet, through friends and relatives, spouses, the media and pharmacists.
“The area of self discovery is important to boomers,” French adds. “They want to go out and find information on their own terms.”
What shouldn’t marketers try? Putting twenty- and thirtysomethings in advertising for boomer-related products. “They prefer advertising and promotion with people like them,” French says. “The size-zero model on TV who is gorgeous and trying to sell them something isn’t going to work.”
Antioxidants might be the health buzzword for 2006, and power berries such as blueberries, pomegranate, black currant and newcomer acai, are some of the most popular delivery methods. According to Productscan Online, 29 beverage products containing blueberries were introduced during the past year, 24 beverages containing pomegranate, and nine beverages containing acai.
POM Wonderful LLC, which launched the pomegranate craze, kept the momentum going with single-serve PET sizes of its trademark pomegranate-shaped bottle. POM has had such an effect on the industry that The Republic of Tea, Novato, Calif., used the trademark on its Pomegranate Green Tea last year. The product is labeled “China green tea with POM Wonderful pomegranates,” and has been promoted for its antioxidant content.
Leading Brands Inc., Vancouver, B.C., this month announced new LiteBlue Reduced Calorie Blueberry Juice Cocktail as a complement to its TrueBlue Blueberry Cocktails. The product is sweetened with cane sugar and Splenda for 50 percent fewer calories than the original. It is said to contain a full serving of blueberries.
Odwalla last month added pomegranate to its lineup with PomaGrand 100 percent juices. In addition to pomegranate, the drinks are enhanced with chokeberry, elderberry, blueberry and black currant to pump up the antioxidant properties. It also added blueberry and acai to its Amazing Purple Superfood product in 2005.
Naked Juice, Azusa, Calif., rolled out Pomegranate and Pomegranate Blueberry flavors, said to contain a pound of fruit in every bottle, as well as Antioxidant Mango Acai Drink containing iron, calcium, omega fatty acids and fiber. And Zola Acai, Manhattan Beach, Calif., introduced Zola Acai Brazilian Berry Power Juice Beverage.
But these power berries are not limited to super-premium juices. They also have been added to more mainstream juices such as Old Orchard, Langers and Hansen’s brands. Old Orchard Brands launched Blueberry Pomegranate to its 100 percent juice line, while Langers added Pomegranate Juice Cocktail, and Hansen Beverage Co. rolled out Hansen’s Natural Pomegranate Juice Cocktail.
Black currant is a popular flavor in Europe, but one new to U.S. consumers — at least modern consumers. The berry can be found in CurrantC Nectar from The Currant Co., which grows black currants in Dutchess County, New York. Company President Greg Quinn took a very personal interest in black currants, which had been banned for commercial growth in the United States since 1911 due to concerns over a botanical disease. Quinn lobbied New York lawmakers to lift the ban in that state, began growing black currants in 1999 and launched CurrantC last spring.
“Currants are amazingly healthy, but back in 1911, there was no such thing as health food,” Quinn says. The berries contain high levels of potassium, iron, vitamins C, B6 and E and other antioxidants, and are enjoying positive press thanks to a report last month that they could help prevent Alzheimer’s disease.
He points out that “those little raisiny things” that most people consider to be black currants actually are champagne grapes, and says his company is on a mission to introduce the black currant to American consumers.
“Black currants have a very unique flavor,” he says. “Currants taste like nothing else.” He describes CurrantC as a beverage that has an initial sweet note and finishes with a tart flavor, making it thirst-quenching as well as healthful.
Along with the power berries, tea has a continuing reputation for health. Producscan Online reported 164 new teas introduced during the past year.
“People are getting a little more of the nuance in tea,” says Honest Tea’s Goldman. “It’s not all the same.”
He reports that the company saw “a phenomenal response” to last year’s introduction of white tea. “Some of the appeal of white tea is because it’s new, but it’s also because people are attracted to the antioxidants in white tea,” he says.
Other companies jumping into white tea include Ferolito Vultaggio & Sons, Lake Success, N.Y., which rolled its first white tea, Arizona Blueberry White Tea. Cadbury Schweppes introduced Snapple White Tea, and expanded the Snapple franchise with Snapple Tea Bags in 20-count boxes.
Not to be forgotten, green tea continued its health march with Sencha Shot from Japan’s Ito En. The single-serve 6.4-ounce shot of green tea contains 152 mg. of Catechin tea antioxidants. Fuze rolled out Diet Green Tea in an Orange Ginger flavor, and played up the product’s antioxidant content, which it says is equal to three servings of vegetables per each 18-ounce bottle, with an ORAC symbol on the label.
On the hot tea side of the business, The Republic of Tea introduced a Blueberry Green Tea called Man Kind Tea and pledged to contribute 75 cents from every tin of Man Kind Tea to fight prostate cancer. In addition to green tea, the product contains wild blueberry to promote prostate health.
Beauty in a bottle
While good looks are not essential to good health, a healthy appearance and a healthy image seem to go hand in hand. The category of “cosmeceuticals,” or products that help consumers look good from the inside out, is a tiny one, but one that is gaining interest.
Among the growing trend of new products designed to enhance skin care are bottled water products from Borba Nutraceuticals, based in Beverly Hills, Calif. The company launched Skin Balance Water, Clarifying Pomegranate, Age Defying Acai and Replenishing Lychee. Clarifying Pomegranate contains a vitamin complex to improve the overall clarity of the skin, while Age Defying Acai is designed to soften fine lines and wrinkles, improve elasticity and “renew the skin’s natural glow.” Replenishing Lychee is designed to boost skin’s moisture, and contains a botanical gelatin complex to hydrate the skin.
Also along the bottled water front, is H2Olive Pure Mineral Water from South Africa’s H2Olive Pty. Ltd., reportedly available in the United States and Canada. Dubbed “the inner beauty drink,” the product is said to contain olive oil and olive leaf extract.
Aloe vera has a centuries-old reputation for healing the skin, and ingredient-maker Aloecorp, Lacey, Wash., recently announced the development of the Qmatrix processing technology, which it says will allow it to design value-added products such as fruit-enhanced aloe drinks, juices, teas and other products with the benefits of aloe. Among its benefits, the company says aloe has been shown to promote wound healing and increase collagen, which is associated with skin elasticity.
Along with cosmeceuticals, products that appeal to the connection between mind and body are a potential new wellness category. Aromatherapy, energy and stress reduction all are part of the mind-body connection. According to Datamonitor, 81 percent of U.S. and European consumers believe it is important or very important to “find ways to escape the pressures of everyday life,” and 89 percent indicate it is important or very important to “reduce stress levels.” Consumers are trying to achieve this by seeking therapeutic products, trying alternative therapies and pampering at home.
Jivita LLC recently launched a drinking water called Jivita, said to be an aromatherapy water. The water is infused with a combination of extracts from flowers, resins and bark. The line includes Jivita Red, said to enhance mental and physical awareness; Jivita Orange to enhance mental and physical endurance; Jivita Green to calm the body and mind; and Jivita Purple to center the body and mind.
Vancouver, B.C.-based Fusion Coffee Inc. rolled out a line of whole bean Fusion Coffees in four functional varieties, including Well Being Blend, which is infused with ginseng, white willow and matcha to help reduce stress and stimulate the immune system; and Focus Blend, which contains ginkgo biloba, yerba mate and ginseng to aid concentration and memory while reducing stress and fatigue.
Metromint Peppermint Water from Soma Beverage Co., San Francisco, is formulated to take advantage of the “natural stress relieving powers of peppermint.” According to the company, mint relieves stressed muscles, stimulates nerves, calms the stomach after meals and aids in digestion.
According to Tate & Lyle, 90 percent of parents say they try to ensure their children have healthful, nutritious diets. But the survey also says parents find it difficult to manage their children’s diets, balancing nutrition with the taste preferences of their kids, and they are concerned about brands marketed at children.
While targeting kids as consumers can be a delicate proposition, several companies have formulated products to give children less sugar and more nutrition. Cadbury Schweppes’ Motts division rolled out Mott’s Plus for Kids’ Health, a 100 percent juice fortified with 100 percent of the recommended daily allowance of vitamin C, 10 percent vitamin A and 10 percent calcium.
Waddajuice, Westport, Conn., introduced WaddaJuice Naturally Flavored Beverage with 100 percent of the RDA for vitamin C and 10 percent for calcium. According to the company, the product has no added sweeteners, flavors, dyes, preservatives or additives, and contains half the sugar, calories and carbohydrates of other fruit juices. And Wild Waters Inc. rolled out Wild Waters flavored waters for kids, containing vitamins and minerals.
Organic products have made significant inroads into mainstream markets, due in large part to the perception that they are healthier than conventional products. IRI measured double-digit growth in sales of organic products during the past year, and while it expects growth to slow somewhat, it predicts it will continue in the high single-digits through 2010. Household penetration of organic products has reached 46 percent in the United States, while “natural” products can be found in 94 percent of households.
“There has been a real transformation in what the organic symbol stands for,” says Honest Tea’s Goldman, who has made organic an overarching theme among all of the company’s products. “It used to mean people’s environmental concerns, but now it’s really more about their health concerns.”
Younger shoppers are a key demographic for organics in the United States, especially Generation Xers, according to the Organic Trade Association. Ethnic shoppers such as Asian and Hispanic Americans also are more likely than the general population to be organic consumers.
Among the 155 new organic beverage introductions reported by Productscan Online during the past year were Ocean Spray’s new Organic 100 Percent Juice Blends. The company rolled out organic Cranberry, Cranberry Blueberry and Cranberry Raspberry varieties with no added sugars, preservatives or artificial flavors. Apple & Eve, Port Washington, N.Y., added organics to the lineup in 2005, and added Organic Juice Boxes for kids. Organics are so popular that trendy Jones Soda Co., Seattle, debuted Jones Organics in ready-to-drink White, Green and Red Teas. BI