Focus - Soft drinks makers reap superfruit dividend

By | 8 February 2008

Growing consumer interest in the health-enhancing properties of previously unknown fruits has proved a significant boon for the soft drinks industry. Most of these superfruits end up in juice form, writes Shane Starling, providing soft drinks producers with a constant stream of new product opportunities at premium price points.

The term 'superfruit' is relatively novel, describing as it does the stream of new fruits now flooding western markets. Yet the first commercially successful 'superjuice' was a cranberry/apple blend offered by Ocean Spray way back in 1963.

Cranberry juice has now become mainstream and is the third highest selling juice behind orange and apple in many markets including North America, many parts of Europe and elsewhere. And cranberry is showing no signs of age fatigue, as sales continue to grow in most markets where it has an established presence. Indeed, cranberry sales are being boosted by the increased interest in superjuices generated by the new wave of antioxidant and nutrient-rich superfruits. Moreover, market researchers and industry pundits are forecasting that superfruits and superjuices will attract an increasingly broader audience in the coming year and beyond.

"Superfruits haven't been defined scientifically, but it's generally agreed that they're valued in their native country for their medicinal or health-enhancing properties and that they have a high antioxidant content - usually double, triple or more than that of other fruits - as defined by their ORAC (oxygen radical absorbance capacity) score," notes Dr Wayne Geilman, a senior research officer at Utah-based Pure Food Technologies.

With an international public more interested in healthy foods and beverages than ever before, the exotic, nutrient-boosted cachet of superfruits is highly appealing, so much so that they can command significant price premiums. Superfruits from all over the world have poured into the market in recent years with most of them ending up in juice form.

The appeal of perceived health benefits also appears to outweigh environmental concerns such as food miles, in the eyes of consumers, say researchers.

Explicit health claims are not yet ratified in most jurisdictions but the healthy press antioxidants have garnered in the past ten years has created a strong link in consumer minds with heart health and free radical control.

But claims abuse remains a concern as some Australian juice makers discovered when marketing was highlighted by the consumer watchdog there recently. "It is a breach of the Food Standards Code to make health and therapeutic claims for food, but it is clear from marketing hype around superfruits that these regulations are not being effectively enforced," the watchdog, Choice, stated.

Açai, pomegranate, blueberry, goji, mangosteen, noni, tamarind, gac-chi and lychee are just some of the 'superfruits' beverage makers large and small have incorporated into various juice, soda, water, dairy and other products. More 'regular' fruits such as plum, watermelon and blueberry are also benefiting from the trend.

The unique thing about superfruits is that they are almost exclusively consumed in a processed format. In their whole state, there is usually little demand for them as they tend to taste bitter or can be fiddly and difficult to eat. As Karl Crawford, food business development leader at New Zealand-based fruit science company HortResearch, notes, pomegranate was an obscure fruit before its juice-based ascendance into the superfruit limelight. "There are five key criteria for superfruit success: novelty, health benefits, convenience, controlled supply and promotion," Crawford adds.

Research suggests these attributes appeal to under-50s, among whom fresh fruit sales are falling in many developed markets.

"Superfruits are the product of a strategy, not produce you find growing on a tree," writes Julian Mellentin, business editor of New Nutrition, in his Report, 'Ten Key Trends in Food, Health and Nutrition 2008'. "They are the result of a bringing together of science and marketing in order to create a new, value-added niche in the nutrition market. Crucially, a successful superfruit strategy is about creating niche, very low volume, very high-value brands. It is a salutary fact that in the US market, to take one example, sales of three brands of superfruit juices - mangosteen, goji and pomegranate - between them account for a massive 45% of the sales value of the mainstream brand Tropicana Orange Juice by selling just 1.5% of its volume."

Brands such as US-based PomWonderful (pomegranate), UK-based PomeGreat (pomegranate) and US-based Sambazon (acai) have quickly established healthy sales that are growing at often double-digit rates. PomWonderful has pushed through the $100m mark in swift time, selling at $8.60 a litre, while US-based mangosteen specialist, Xango, has achieved sales of about $300m and sells at $50 a litre, about 25 times the price of chilled orange juice.

US-based Brandstorm's Himalayan Goji Juice has yearly sales of about $60m, mainly through multi-level marketing. It has also launched the US's first not-from-concentrate organic goji juice, called Gojilania, which has achieved nationwide retail distribution.

Mainstream beverage giants like PepsiCo and Coca-Cola have climbed onboard with acquisitions of fruit juice startups and launches of juice lines and line extensions.

PepsiCo has been particularly active in the area, with acquisitions such as California-based Naked Juice at the end of 2006. At around the same time, it launched a new brand, Fuelosophy, which includes a pomegranate/berry blend. Pepsi-owned Tropicana has launched a pomegranate-blueberry juice in the US and Dole Sparklers, a sparkling juice range including a Blueberry Pomegranate flavour.

Coca-Cola released an energy drink in Australia called Mother, which contains açai, and recently acquired Fuze Beverages in the US. The Fuze range is infused with a weight management ingredient from an Asian berry called garcinia cambogia. Coke also launched a line of pomegranate-based juices called PomeGrand under its Odwalla brand in the US. Cadbury Schweppes also recently launched Pomegranate Pear under its Nantucket Nectars brand in the US.

UK retailer Marks & Spencer has an own-label pomegranate drink retailing for about GBP2.65 (US$5.17) while other UK supermarkets, such as Tesco and Sainsbury's, have launched smoothies, juices and other products incorporating superfruits.

This is all good news for superfruit suppliers. As Jon Wisniewski, managing director of New Zealand-based açai supplier and product maker, Nu Fruits, notes: "The fact that the bigger drinks companies are showing an interest in açai indicates it could make it through to the mainstream. Things are going well. There are a large number of new products coming out and a lot of NPD pipeline work being done."

Sceptics remain, however, such as Arizona-based beverage specialist Jim Tonkin, who wonders if the antioxidant sell may begin to fatigue consumers. "People are buying them now because they are new and they are intrigued," Tonkin says, "but time will tell how many of these products stay the distance, especially as science, health-claim and formulation issues remain problematic."

Source: Soft Drinks International

For more information, go to www.softdrinksinternational.com

Sectors: Soft drinks, Water

Companies: Tropicana, PepsiCo, Fuze, Coke, Cadbury Schweppes

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