As we get into the new year and retailers start
to prep their shelf sets for the crucial summer selling season, it’s always fun to try to scope out what segments are the innovation hotbeds. So here’s my take on some areas to watch. Interestingly, you can get to more or less the same
spot from a different direction by
analyzing what brands the astute
minds at Bevnet have bestowed with
their “best of” accolades for 2007, so
I’ll weave some of that into the mix, too. And I’ll offer a couple of mini-trends that also could bear watching.
For starters, with Coke and Pepsi ready to open the next front of the cola wars in enhanced waters with a Vitaminwater-SoBe Life Water battle, functional beverages should be a hot spot for retailers seeking the next high-margin, value-
added niche. On that score, Function
Drinks would seem to have it all
going for it: a telegenic, working young
doctor as creator, a murderer’s row
of fi nance, marketing, packaging and fl avor talent as investors and advisors, a sales force that has earlier worked
wonders for brands like SoBe and Fuze, and a proposition that goes Vitamin- water one further on the effi cacy scale. I have no problem with Bevnet’s crowning it as launch of
the year, with one caveat: it’s still a work in progress. With the distribution void created by Coke’s acquisitions of Fuze and Glaceau having accelerated the brand’s rollout plan by a year,
the Function crew in essence is
building its airplane as it takes it
on its fi rst transcontinental flight. Going
to be fun to watch this one!
On the energy drink side, there’s healthy energy – drinks devised to appeal to the estimated two-thirds of American consumers who’re weirded out by the ingredients or macho posturing
of conventional energy drinks. So far, we’ve seen lots of action here, but no single brand has ignited, meaning it hasn’t been demonstrated yet that this category really exists. Still, Bevnet’s
two picks, Syzmo and Steaz, both are
well-thought out, appealingly
formulated brands that have garnered
traction in the natural-foods channel and
now are aiming more for the general market. Another brand that would seem perfectly positioned to crack this segment is Glaceau’s Vitamin Energy. So far it hasn’t set the world on fire, maybe because the packaging is too little distinguishable from the core Vitaminwater brand,
but the company is far from giving up on
the concept.
Kids’ drinks also seem ripe for an explosion, both at the retail and school level. As
with healthy energy, no brands seem to have yet ignited here, meaning
the game is still wide open, and we’re seeing a multiplicity of approaches, from diluted juices to essence waters to nutritionally reinforced juices. Bevnet pick Bot – a lightly sweetened Vitaminwater for kids – is a beaut, but it’s still way too early to
handicap this one.
Though the recent outpouring of concern about
carbon footprints came as something of a
ringer, high-end bottled water continues to be a rich segment driven by trade dynamics. Essentially, every distributor who doesn’t have Fiji would like to have something like it to get out of the profi tless morass of mass-branded waters, while beer and booze wholesalers increasingly view
an elite water brand in a killer package as a
way to strengthen their presence on-premise. Icelandic Glacial, another of Bevnet’s winners, was snagged fairly quickly after its U.S. launch by Anheuser-Busch for its wholesaler network, but other entries are on the way. An intriguing one that’s still in the works is Equa, sourced from an exceptionally pure aquifer in the Brazilian rainforest, thereby twinning exotic appeal
with a better claim on purity than a
water from the tropics. Expect lots
more along those lines.
Now on to a pair of mini-trends. One gambit we’re seeing is marketers’ attempts at their own ingredient branding – RightSize employs App- emine, Crayons employs SugarGuard Protection. Get the picture? These are clearly efforts
to offer a value-added differentiator, but they also comprise a second brand that has to be built from scratch. It’s hard enough to establish the core brand! Still, as consumers grow more skeptical of the questionable goodness claims emanating
from many brands, these endorsements could
find a receptive audience.
I’m also struck by the interesting efforts we’re seeing from total novices
to the beverage segment at a time
that the major players, for all their
strained innovation efforts, hardly ever bring anything with real personality to market. Bevnet designee
Bombilla Gourd, launched by three
23-year-olds with little life or business experience – let alone beverage experience – has offered a more accessible take on RTD mate than leader Guayaki. Equa is from a guy who made his mark in the Brazilian freshwater fi sh business. Hint and Ayala’s Herbal Water each come from a couple that made their fortune in the tech business. Memo to retailers: if the person who just showed up on your doorstep is an utter beverage novice – invite him or her in. You really never know.