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Euromonitor Analyst Sees Juice Redefined in 2013

Posted: March 6, 2013

Prospects for the juice category have grown murkier in recent years, particularly in developed markets where skepticism of sugary beverages of any kind continues to grow, according to a recent Euromonitor report. But in more developed markets, functional drinks offer "real potential."

In the report "Juice in 2013: Building a Better Beverage," Michael Schaefer, head of beverage and food service at Euromonitor International, noted that consumers continue to gravitate toward the latest tropical “super fruits” and flavors, while stevia-based products could drive further expansion among consumers looking to control sugar intake. Among emerging market consumers, he added that effective localization is paramount, with products able to accurately reproduce the flavors and textures of local unpackaged favorites likely to see continued growth.

For instance, Egypt is home to thousands of juice bars, where one can enjoy a wide array of freshly squeezed juice drinks for just a few cents, which Schaefer said sharply limits the appeal of packaged juices for much of the population in this area. Although he noted that powdered beverages, such as Tang, are enormously popular in many markets, with their low prices, wide variety of flavor choices, and added features such as nutrient fortification (often tailored to local tastes) proving very appealing to low-income consumers in particular.

In the U.S., Tropicana’s Trop50 product, which uses stevia to offer a lower-sugar, reduced calorie beverage with the taste and vitamins of pure orange juice, recently had $150 million in annual sales, which Schaefer noted as one of the most successful new product introductions in the juice category for some time.

Going forward, he said these "engineered" types of products will account for an ever-larger portion of sales among consumers unwilling to compromise on price, sugar content, or flavor. The 100%, not-from-concentrate category will remain important in higher-income markets, but will further evolve into a super-premium, high-end niche, he said.

"Consumer concerns about sugar can be overcome, but this will come in the form of more-exotic products like coconut water, tropical “super fruits” like acerola or cupuaçu or juices prepared through high-pressure-pasteurization, like Starbucks’ Evolution Fresh line, offering a different taste/health benefit equation," Schaefer wrote.

The unpackaged juice culture of markets like Brazil, Egypt, and Indonesia will serve as an on-going inspiration/innovation pipeline for markets in North America and Europe, particularly among upper-income consumers looking to make high-end juices part of their lifestyle, Schaefer added. At the same time, he expects juice will become less of a stand-alone product and more of a complement to RTD teas, sparkling waters, and even energy drinks as consumers look to transition away from full-flavor carbonated.

"New fruits and flavors can be expected to often serve less as stand-alone products and more as the building blocks for the next Minute Maid Pulpy," Schaefer concluded. "This is especially true in fast-growing emerging markets, where there is strong demand for convenient, affordable soft drinks for in-home consumption, reminiscent of the local flavors one can often find on every other street corner."