A beverage executive stopped by our office
recently to knock around some ideas and
steal free out of our cooler. He couldn’t have
been more optimistic about the way the year is
going at this, its approximate mid-point.
What had him so fired up? In a word,
activity.
Big companies have opened their wallets
to recognize innovation in the best way –
financially. Smaller companies are starting to
find their way up the funding and distribution
ladders as decision makers at the higher levels
notice that non-carbonated and functional
products are continuing to attract new
consumers. Independent distributors – some of
whom are flush with buyout cash – are going to
be looking for a new line to replace the loss of
Vitaminwater. All that creates the anticipation
of even more activity.
There’s a lot of jostling for position – new
brands like FRS are trying to work as hybrids
of established categories, water beverages like
Function Drinks seem to be the 2.0 version of
Vitaminwater, and teas and coffees continue
to gain momentum. It’s been at least a week
since I was forced to try the hot new flavor
“pomegranate.” Once-odd ingredients are
becoming mainstream – perhaps a bit too
mainstream, as this issue has a New Products
listing for an açai-flavored vodka.
Even more interesting, a lot of talent is
disseminating to other companies – the
inevitable departures that accompany brand
purchases result in sales and marketing people
moving on to help energize other products.
Yes, an infusion of cash seems to create an
air of excitement around an industry. But it’s
sometimes hard to tell, once the money starts
flowing, whether you’re in a gathering wave or
one that’s just peaked.
With Coke’s purchase of Glaceau, there have
to be questions about whether there’s going
to be room for a continued rush of functional
waters, for example. There are still scads of new
energy drinks being introduced, but at the same
time, there has been a real consolidation of the
leadership pack. There haven’t been exciting
new CSDs in a long time, although Coke Zero
continues to keep people talking. One has to
wonder, now that Vitaminwater has a route
to ubiquity, how many competing products
consumers will want to try, no matter how
innovative they might be.
Breakout hits in the new beverage world are
hard to come by – for every Glaceau or Arizona
or Gatorade, there are plenty of small products
that might be just as tasty or functional but just
don’t make it for a variety of reasons. There’s
always a pack of beverages chasing consumers,
but retailers need to be careful. They need to
think about this as they face an onslaught of
products that will be the “next Vitaminwater”
just as they’re finishing sorting through the “next
Red Bulls” of the world.
Now that Glaceau has become part of the
establishment, the questions retailers have to ask
are these: How many more major game changers
are out there? Is this the next link in the chain,
or the spike?