The Coca-Cola Co., Atlanta, is placing greater emphasis on all still beverages than it has before, and such focus is none so apparent than in its juice segment. In 2009, the company reported it sold more than 1.7 billion unit cases of juice and juice drinks across more than 120 brands in 145 countries worldwide. Coca-Cola recorded 9 percent unit case volume growth worldwide for its juices and juice drinks.
Coca-Cola's juice brands ripe for growth
July 9, 2010
In addition, last year Coca-Cola’s juice brand Simply achieved billion-dollar brand status by surpassing retail sales of $1 billion and reported 31 percent unit case volume growth.
"The company has traditionally been looked at as primarily a sparkling beverage company, and as consumers’ tastes and preferences have changed around the world, we have to have a broad spectrum of products that appeal to all consumer needs and occasions,” says Mike Saint John, president of Coca-Cola’s Minute Maid business unit, which also includes the Simply, Hi-C and Five Alive brands, among others.
Over the past few years, Coca-Cola has strengthened its juice portfolio with the acquisition of well-known Latin American brand Jugos Del Valle and is further expanding its presence in Russia by purchasing the controlling stake in Russian juice maker Nidan Soki. The company also sought to buy a juice company in China last year, Huiyuan Juice, but was blocked by the Chinese government. However, its interest is still growing in the country, Saint John says. Last year, Coca-Cola also began the complete rebranding of its global juice packaging to create consistency in the company’s juice products internationally.
Positioned to grow
U.S. juice sales have been relatively flat for the past few years, due to rising orange juice prices, which has led to a shift in consumer purchasing patterns, Saint John says.
“Cost has driven some people out of the juice category,” he says. “There has also been a shifting from some of the higher priced juices into lower priced drinks. We manage our portfolio accordingly and have made consumer offerings to take advantage of those trends. Here in the U.S. in the chilled category, we’ve got a leading market share of 25 percent, where our competitor is about 22.6 percent, so we’ve tried to shift as the consumer has shifted as well.”
Even though the Minute Maid and Simply brands compete against each other on grocery store shelves, the brands are positioned to appeal to two different consumers. The typical Minute Maid consumer tends to be from a larger family with above average income. In contrast, the typical Simply consumer would come from a smaller household comprised more of adults with a higher income.
“Simply is really positioned as a premium brand that is going after a consumer who is looking for something closer to a fruit and as fresh tasting as possible,” Saint John explains. “Our tagline is ‘Honestly Simple’ and ‘simply unfooled around with.’
“Minute Maid’s positioning, on the other hand, is all about great tasting, fortified nutrition … whether it be fortified with calcium or our Minute Maid Enhanced Heart Wise that’s clinically proven to help lower your cholesterol.”
Simply products are not-from-concentrate, while Minute Maid is from concentrate. The two brands also are packaged differently. Minute Maid often appears as a stock gable-top carton, while Simply is in a proprietary high-end plastic carafe. To reflect these differences, Minute Maid is more value priced, and Simply is more premium priced.
“They are on the shelf together, but they are positioned, packaged and priced in such a way that there is really minimal interaction between the two brands,” Saint John says.
While Simply and Minute Maid often appear in the same aisle, another Coca-Cola brand, Odwalla, finds itself competing in an entirely different market. Odwalla, a wholly owned subsidiary of Coca-Cola, participates in the natural health beverage segment.
“The need states are very different in that we deliver against health, beauty and nutrition,” says Alison Lewis, Odwalla’s president. “If you look at our smoothies and juices, they really are about whole body nutrition, so that’s what makes us different within the world of Coca-Cola.”
While the natural health beverage category was a bit soft last year with the economic downturn, the segment has been strong for several years with growth expected to continue as well, Lewis says.
The typical Odwalla consumer is the same as the natural health food channel, which is defined as “lifestyles of health and sustainability” or LOHAS. At its core, these consumers fall within the 25- to 34-year-old demographic.
“These are people that are really looking to purchase products from companies and from brands that do a very good job in ensuring that they’re being good to their personal health and also being good to the health of the planet, so very lifestyle oriented consumers,” Lewis says.
Changes for today’s consumers
Minute Maid’s portfolio of fortified juices, including its Enhanced Juices and Juice Drinks, provides people with the opportunity to consume products that are potentially beneficial to their health, which is what more people are looking for today, Saint John says.
“What consumers won’t do is compromise taste for a benefit, however,” he says. “You have to find a way to build the enhancement or benefit in there, but still have your product taste great.”
Minute Maid’s flagship line includes fortifications such as calcium and vitamin D. Minute Maid’s Enhanced Juice and Juice Drinks line in 59-ounce bottles consists of Heart Wise Orange Juice, which includes plant sterols to help reduce cholesterol; Pomegranate Blueberry Flavored 100 percent juice blend of five juices, which contains omega-3 fatty acid/DHA and four other ingredients to help nourish the brain and body; Strawberry Kiwi Flavored Juice Drink that combines yerba mate extract with fruit juice to provide a natural energy lift; and Pomegranate Lemonade and Pomegranate Flavored Tea, which both include antioxidant vitamins C and E to help support a healthy immune system.
It had been several years since the company had refreshed the Minute Maid brand, and, late last year, Coca-Cola unveiled a new visual identity for key brands in the company’s juice portfolio, including Minute Maid, Del Valle, Andina and Cappy. Coca-Cola debuted a uniform packaging design based on the historic logo and color scheme of Minute Maid, the largest brand in Coca-Cola’s juice platform. The modernized design includes a black rectangle and white logotype lettering while adding a green horizon mark, fruit photography and natural imagery to underscore the source of the juices. The new design also creates a coherent look on the shelf when packages are placed side-by-side to showcase the fruit and help the brands stand out, the company says.
Last month, Minute Maid also refreshed its 128-ounce size by moving from an opaque orange container to a clear bottle. “You can actually see the juice like you can with Simply,” Saint John says.
In addition to the packaging makeover, Minute Maid is changing its target consumer and reaching out to them through a new advertising campaign.
“Traditionally the brand had been a rather nurturing brand, and we marketed it through the caretaker or Mom essentially, targeting women 25 to 54,” Saint John says. “Our new target is adults, but a target that would skew a little bit younger and that is both male and female.”
Since Simply’s launch in 2001, it has become the 14th billion dollar brand for Coca-Cola. Saint John attributes the brand’s success to the growth of the natural health food channel.
Simply is available in Orange, Grapefruit, Apple, Lemonade and Limeade varieties. Simply’s Orange varieties include Pulp Free, Medium Pulp, High Pulp, With Pineapple, With Mango, and calcium and vitamin D fortified options. Simply launched Lemonade with Raspberry last year, which has become the No. 2 selling chilled Lemonade, behind No. 1 Simply Lemonade, Saint John says. Simply juices and juice drinks are available in a variety of sizes: 59-ounce carafes, single-serve 13.5-ounce carafes, and 89-ounce bottles.
Simply continues to grow by capturing new consumers with single-serve packaging in foodservice, convenience and drug stores, grocery and vending channels.
“If you look at the c-store, colleges and universities, two years ago we were in zero with Simply single-serve,” Saint John says. “Today we’re in over 30,000. … There are foodservice businesses that absolutely use the single serve where we have a dominant share with Minute Maid, and we’re also expanding Simply there as well.”
Natural health beverages
Odwalla offers an expansive portfolio that delivers what LOHAS consumers want, including beverages that provide protein, antioxidants, vitamins, energy and superfoods. With its broad portfolio, its top sellers span a spectrum, but include Original Superfood, Mango Tango, Strawberry C Monster, Chocolate Protein Monster, Carrot Juice and Orange Juice. All of these products deliver against different needs but also deliver against great taste, Lewis says.
In May, Odwalla expanded its protein offerings with Odwalla Strawberry Protein Monster, which contains 25 grams of soy and dairy protein in every bottle. Last year, the company introduced its first whole grain offering with Wholly Grain!, a smoothie that includes orange, pineapple and mango juices as well as 16 grams of natural whole grains in each 8-ounce serving. The company also introduced Pink Poetry Superfood, a smoothie made with plum, dark sweet cherry, guava and other juices along with hibiscus, cranberry and green tea extracts. Formulated with women’s health in mind, Pink Poetry contains iron and calcium, and used its launch to help raise awareness of breast cancer in support of the work of The Breast Cancer Research Foundation.
“That’s a good example of where we believe the category is going, where very specific functional benefits are very important to deliver against,” Lewis says.
Odwalla’s innovation strategy includes building sustainable platforms that target consumer needs such as its Protein Monster and Superfood portfolios, but seasonal launches provide another avenue for new products throughout the year. For example, during flu season, Odwalla launches a wellness smoothie that contains echinacea and vitamin C and for the fall it launches Super Protein Pumpkin.
What sets Odwalla apart as a wholly owned subsidiary is its ability to move quickly to launch new products, Lewis says. An example of its speed is the launch this spring of Haiti Hope Mango Lime-Aid in six weeks. The juice developed as part of Coca-Cola’s Haiti Hope Project, a five-year project to provide long-term investment in Haiti’s economic development following the earthquake that devastated the country early this year. The program aims to raise $7.5 million from private and public sectors to help 25,000 Haitian farmers double their income through the building of a sustainable mango juice industry. The program will provide farmers with access to training and markets for their juice through TechnoServe, a nonprofit dedicated to creating income, opportunity and economic growth in the developing world. All of the profits of the sale of Haiti Hope Mango Lime-Aid, which is a limited-time offering, will go to the Haiti Hope Project.
“Odwalla saw this opportunity as one where we could play a role,” Lewis says. “We are a company who has always been about doing good things in the community, but we had tended to focus on the community of North America, not the community of the world.”
Sustainability plays a large role in Odwalla’s marketing strategy. Less than 1 percent of the 150 million pounds of produce that enters Odwalla’s manufacturing facilities end up in a landfill. Pulp and peel from fruit are used to feed livestock. The company also recycles all the materials that it can that come into the plant. In February, the company announced it plans to install five redirected bio-gas Bloom Energy Server fuel cells at its juice packaging plant in Dinuba, Calif. When fully operational at the end of the year, the fuel cells will cut the plant’s carbon footprint by 35 percent and supply 30 percent of the plant’s energy needs.
In May, Odwalla expanded its Plant a Tree program to plant more trees in all 50 states. The program is a partnership between Odwalla and America’s State Parks to plant 200,000 trees free of charge. Tree locations will be determined by website visitor designation.
Going forward, Minute Maid, Simply and Odwalla all have expanded placement as part of their growth strategies. One key area of expansion for Odwalla is its retail presence.
“As consumers’ needs grow, we’re looking to be where consumers want us to be,” Lewis says. “The way that we really do that is insuring that we have a flexible route to market.”
Odwalla operates about 300 direct-store-delivery routes as well as shipping directly to customer through the customer’s supply chain and third party distributors.
The Minute Maid division has a five-year growth plan to go from capturing slightly more than one in five juice occasions to capturing one in three, Saint John says. “In a category that’s relatively fluid, in order to grow, obviously you’ve got to gain share,” he says.
The division’s strategy to increase its usage occasions is four fold. First, it plans to triple its Simply business in the next five years. “We think there is an opportunity for it to be three times as large,” Saint John says. “The reason we say that is the household penetration today is slightly over 20 percent, so 75 to 80 percent of consumers have never even tried the product yet, which isn’t that surprising given the short time it’s been in the market.”
Second, Minute Maid’s new packaging and advertising programs hope to refresh and contemporize the brand for today’s consumers. In addition to the new packaging and marketing, Minute Maid plans to continue to lead in innovation and new product launches. Lastly, the company plans to expand its availability.
“Our business for years had really been based on more of a multi-serve, future consumption platform based primarily on supermarkets and mass merchandisers,” Saint John says. “We have a huge opportunity with single serve and up and down the street business. Convenience stores, colleges, universities, club, dollar stores are big sources of growth for us as well.” BI