Brand News: Functional Water

vitaminwater isn’t what it used to be, but it’s trying.

After a $4.1 billion buyout from the Coca-Cola Co., integration into Coke’s distribution system, a host of new flavors and the past year’s introduction of eight new low-cal varieties sweetened with Truvia, the brand is currently engaged in its second major revamp this decade. But is the work going into the brand an attempt to tinker before a major surge, or is the Coke system just not a good fit for a product that made its name through close relationships with private distributors?

It’s a question that didn’t seem like it could ever get asked just two short years ago, when Coke grabbed up an energetic, disciplined organization whose bright leadership team routinely invaded new geographic markets while sampling and merchandising with gusto. The vitaminwater brand stretches back to 2000, when J. Darius Bikoff decided to combine an earlier product, the vapor-distilled, electrolyte-enhanced smartwater, with a flavored multi-vitamin tablet. It made for a quick, stylish hit: throughout its various packaging and flavor variations, the key to the brand’s appeal has been this: a light-tasting, nicely-packaged dose of functional ingredients, with each variety’s name offering a clue about what it did. xxx packed in antioxidants; formula 50 packed 50 percent of your daily need of vitamins C, E and folic acid, and power-c packed vitamin C plus energy-staple taurine.

But things aren’t so simple anymore. vitaminwater, while still the undisputed leader of the enhanced water category, has faced shifts in its leadership, battles at the borders of its category and a rush of brands crafted to replicate the glaceau magic. Through it all, vitaminwater has stayed at the head of the pack, but that doesn’t mean that Coke itself isn’t concerned about the performance of its big free agent. vitaminwater has put up some big numbers, but it has yet to usher in a bright new era of greatness for its team. Amid all that pressure, vitaminwater appears poised for change. Its marketing team has hinted at a packaging revamp, and recently-released varieties already show a shift in direction in both calorie count and flavor.

Positition of Strength

The corpses of would-be pretenders to the glaceau throne – some of them marketed by big companies – litter discount coolers. Dr Pepper Snapple Group, Jones Soda and AriZona all tried to exploit the new category, and achieved – at best – limited success. In the mean time, PepsiCo launched a coordinated attack on vitaminwater’s territory using its Propel Fitness Water, Gatorade G2 and SoBe Lifewater – the only big-firm enhanced water to hold its ground against Bikoff’s creation.

But retailers are starting to show concerns that the brand is adrift, as if they don’t know what the fuss is all about anymore.

“I believe it’s shifted more toward the flavors… from some of the names, you can’t tell what’s in that until you read what’s on the bottle,” said Paul Grammer, president of Fastop, a convenience store chain that runs 10 Circle A Food Marts in Indiana.

Take glaceau’s newest full-calorie vitaminwater flavor, sync. Its moniker obviously isn’t built around a vitamin pack. The berry-cherry flavored product includes 100 percent of the daily value of four B vitamins as well as vitamin C and polyphenols, but the name “sync” doesn’t suggest that – nor was it supposed to. The product’s on-label description calls it a “download of vitamins and antioxidants,” a reference to its real focus: each bottle of sync comes with a free download from MySpace music.

Other new releases from vitaminwater have tinkered more with the brand’s nutritional profile than its flavor profile. Following a broadside from PepsiCo that pointed out vitaminwater’s 125 calories per bottle, glaceau announced vitaminwater10. The sub-line substitutes erythritol and Truvia, a natural sweetener derived from the stevia plant, for a portion of the crystalline fructose used in core vitaminwater flavors. The result? A sweetened, enhanced water with ten calories per serving (25 per bottle) and natural credentials.

In pushing the new line, glaceau has treated vitaminwater10 like Diet Coke by trying hard to give it a life separate from its parent brand. Early ads for the low-calorie line avoid mentioning core vitaminwater. But the introduction of what is ultimately a smaller brand has lately been the bulk of the organization’s marketing focus – something Grammer has noticed in his store. The local Coca-Cola distributor, he said, has supplied him with new vitaminwater window clings on a monthly basis, and, lately, they’ve centered on the brand’s 10 line. That, to Grammer, feels like a further drift from the product that he originally picked up.

For Mike Sacocci, grocery buyer at Dave’s Marketplace in East Greenwich, RI, vitaminwater10 represents a return to the brand’s roots. He started carrying vitaminwater “back when nobody would drink it,” he said, back before 50 Cent took a 10 percent share in the company in exchange for promoting the product.

“I don’t think the brand got better. They just made it for what people wanted,” Sacocci said. “Now, they’re trying to get back.”

vitaminwater10 has been performing well at his store. It fits his clientele well, he said, and the sub-line – if it can deliver equal taste with less sugar – could help open the product up to a wider audience.

So far, the product has performed respectably, racking up nearly $78 million in sales in the 52 weeks ending Sept. 6, 2009, according to Information Resources Inc. data for supermarkets, drugstores, convenience stores and mass market retailers (excluding Wal-Mart). While that puts vitaminwater10 far behind its parent brand, which sold $827 million during the same period, the new entry has already claimed 1.23 percent of the single serve, PET still – not just enhanced – water market.

To date, glaceau has invested in eight varieties of vitaminwater10, a hefty roll-out for a line that’s only a year old. But core vitaminwater is due for something of a reboot as well. Danielle Dubois, spokeswoman for glaceau, said the Coke unit plans significant changes for the brand at the beginning of 2010.

That roll-out may reflect the changes within the brand’s inner workings. While glaceau has remained a separate unit inside The Coca-Cola Co., it has been nudged, pared down, reorganized and stripped to fit Coke’s corporate structure. After the acquisition, Coke junked glaceau’s fruitwater and vitaminenergy to instead build up PowerAde, which Coke added to glaceau’s portfolio. But Bikoff isn’t the leading brain behind PowerAde – or even vitaminwater – anymore, and Mike Repole, the brand’s pre-merger president, similarly departed in August 2008. Coca-Cola Enterprises veteran Hal Kravitz – a post-merger addition – replaced Repole, but that lasted only a year. Coke dropped him to a lower rung in September and installed former consultant Brent Hastie to lead the unit.

Whether Coke is flailing following the realization that it’s selling vitaminwater for $1 per bottle after dropping $4 billion on the brand – or if it has a real plan – is hard to tell. glaceau’s leaders declined to talk to Beverage Spectrum. Distributors – and Coke executives themselves – have expressed optimism about what they call a pair of new functional platforms that will be released in April, but there isn’t much hype leaking out.

Meanwhile, rather than try to figure out what consumers want, glaceau recently made the move to throw that job back to the consumers themselves. glaceau launched a Facebook-based campaign to involve consumers in creating the next vitaminwater variety. Via an online poll, the brand chose black-cherry lime for a new flavor, with a functional pack including “vitamins a to zinc + caffeine.”

Through the same online interface, glaceau will choose a label for the new product. The application gives users three options for creating the label, and none of them restrict designs to the brand’s solid color motif. The simplest, least involved of the three design options includes 40 patterns for use with a secondary color. If the flavor’s planned March 2010 launch is indicative of the brand’s plan, the entire line’s packaging could get a bit more flair.

It’s an intriguing idea, one that seems to suit a brand that grew through an array of styles that each seemed to attract their own individual consumer, allowing them to build relationships with the different SKUs. But building relationships that last can be hard, and it’ll be a Coke team, rather than the original brains behind rescue and vital-C, who will ultimately have to put in the work to keep things fresh, not just low-cal.

Eldorado Natural Spring Water. Eldorado has expanded east, as Tree of Life recently began distribution of the entire Eldorado line in the Southeastern, Southwestern, and Midwestern U.S. Eldorado is sponsoring Denver’s 9NEWS Optimum Wellness program in Q4.

H2Om. As of October 1, 2009 H2Om will be the first nationally distributed spring water brand bottled in 100 percent post consumer recycled plastic (R-PET) completely eliminating their reliance on petroleum and virgin resources. Recognized by TIME Magazine and The Wall Street Journal, and recommended by the Environmental Media Association, H2Om Water with Intention is an award-winning natural mountain spring water (no flavors or additives) which promotes positive energy for people and the planet. In 2010 H2Om will welcome the arrival of its 1.5 liter bottles.

bot. bot has added an new ‘big bot’ line extension to the bot beverage portfolio. The new bot is a healthy, modern approach to hydration and is positioned as an enhanced water. It is an all-natural enhanced water featuring B Vitamins, electrolytes and antioxidants. bot enhanced water is lightly sweetened with pure cane sugar. It comes in four natural flavors – grape, berry, orange and lemon. bot enhanced water is only 25 calories per serving and is free of preservatives, coloring, artificial sweeteners, thickeners or HFCS.

Mosse Beverage Industries. MBI has added two flavors to its current lineup, Citrus Fusion and Georgia Peach. Both flavors are now sweetened with Agave. Additionally, the company has reformulated its Black Cherry beverages to meet consumer demand for more cherry flavor. Going forward, all MBI beverages will be sweetened with Agave.

Ayala Herbal Water. Fans of Ayala’s Herbal Water can find a new flavor added to their line of already widely popular flavors: Lemon Verbena Geranium. The Lemon Verbena Geranium flavor is infused with aromatic herbs and results in a pure, fruity lemon note. It also has a clean fresh finish combined with a romantic floral touch.

SoBe Lifewater. SoBe Lifewater unveiled several marketing programs beginning in late June, in an effort to engage consumers all summer long, SoBe-style, including one of PepsiCo’s largest sampling programs to date, with multiple markets across the country distributing 3 million samples of SoBe beverages at hot events. SoBe’s new advertising also feature SoBe’s Twitter handle – twitter.com/sobeworld – making SoBe among the first national brands to tag advertising with a Twitter callout.

Aquafina FlavorSplash. Aquafina FlavorSplash now comes in six refreshing flavors. It’s available in Grape, Wildberry, Raspberry, or NEW Strawberry Kiwi, Peach Mango, or Lemon. All six flavors are available in Aquafina’s new 16.9 oz. bottles that use 20 percent less plastic for less environmental impact.

glaceau. The results of vitaminwater’s flavorcreator lab (http://www.facebook.com/vitaminwater) are in, and the next flavor of vitaminwater will be black-cherry lime, with a vitamin package that will include vitamins a to zinc, plus caffeine. The new variety will be available in stores nationwide in March. Facebook fans will also get the opportunity to design the label for the new bottle and take a stab at drafting some clever copy describing the flavor and function. After the Facebook fans vote for their top ten label designs, vitaminwater partners Carrie Underwood and 50 Cent will help choose the winning designer – who will be awarded with fame and a $5,000 prize.

LaCroix. Now available in seven flavors, Pure, Cran-Raspberry, Orange, Lemon, Lime, Berry, and Grapefruit, LaCroix 100 percent Natural Flavored Sparkling waters contains an essence of natural flavors and provides great taste without anything artificial added. They are calorie free, sodium free and sugar free. LaCroix is 100 percent recyclable and bottled throughout the U.S.

Activate Drinks. ACTIVATE’s distribution has grown, from San Diego to San Francisco to Hawaii. This Cold Season, the company is promoting ACTIVATE Immunity Orange, which is packed with 250 percent of the RDA of Vitamin C, Echinacea, and Zinc. Its naturally sweetened with Stevia, contains 0 Sugar and only 5 calories per entire bottle. All of these healthy ingredients are at their full potency when consumed, thanks to ACTIVATE’s twist cap, which stores them in an airtight lid.

Cutting Edge Beverages. The H2Organics Family of Organic Nutrient Enhanced Water introduces the re-launch of their H2Organics Original. The six functional formulas now have twice the level of nutrients and an improved flavor profile. The products are available in six functional organic formulas: RELAX, FLEXIBILITY, ENERGY, FOCUS, ANTIOXIDANT, and HYDRATION. Each has organic natural flavor and is packaged in a 20 oz. PET, BPA-Free bottle.

Hydro One Premium Beverages. Hydro One Premium Beverages has added Böde Heart Health to its all-natural, functional, healthy line of beverages. Loaded with the flavor of Acai Blueberry, Böde Heart Health was introduced into all Fresh Markets during the last week of September. It contains essential vitamins, nutrients, minerals and antioxidants formulated to reduce the risk of heart disease: plant sterols, grape seed extract, decaffeinated green tea extract, acai, folic acid and magnesium.

Hint, Inc. Hint continues to grow at a triple digit pace in core markets San Francisco, Los Angeles, New York, and New England. During 2009, Hint CEO Kara Keenan focused her team on building a world class sales organization, lowering the cost of goods and preparing the company’s back office for an outstanding 2010. Heading towards the new year, Hint is ramping up its field marketing efforts, as it continues to build the category it leads. In addition to helping consumers enjoy a healthier lifestyle, Hint has committed to doing its part to protect the environment. In 2010, the company will launch a 15 percent lighter bottle.

VBlast! Vitamins & Spring Water. Bottled by New York Spring Water, Inc. of New York City, the company uses its signature natural spring water and tops the bottle with a patented Vitamin Infusions Cap, which contains liquid vitamins and flavoring. Once the consumer twists the top cap, the vitamins are injected into the water. VBlast! has no calories, no sugar, and no carbs. The vitamins are stored in the cap in a concentrate.VBlast! comes in half-liter PET bottles in eight flavors: Pomegranate-Cherry, Acai & Berry, Green Tea, Grape, Peach Tea, Strawberry-Kiwi, Wild Berry, and Citrus.

VBee! Multi-Vitamins & Spring Water. The children’s version of VBlast! has all the benefits of the parent brand PLUS added Calcium and Vitamin D. Using the patented Vitamin Infusions Cap, the fresh liquid vitamins are dispensed when the white cap is twisted. VBee! is naturally sweetened with Stevia and contains no caffeine, no sugar and no calories. Packaged in 8 oz. PET bottles, VBee! comes in three flavors: Watermelon, Blue Raspberry, and Green Apple.

Trimwater. Trimwater comes into 2010 with a new look, a new partner, and an enhanced flavor lineup for its proprietary 4-calorie weight-control formula. Wilhelmina International will be working as a marketing and branding partner of Lifestyle Beverages and Trimwater, bringing Trimwater to fashion shoots, fashion shows, the gym, parties, or just walking around the city. The redesign of the Trimwater logo and packaging is now available: it is a 16.9 oz. powerflex bottle with colorful, full shrink sleeve and a colored transparent ‘beverage window’ displaying the new Trimwater logo. Trimwater will also be modifying its flavor lineup in 2010 and introduce new flavors, including Acai-Blueberry and Chocolate-Maqui Berry.

TalkingRain. TalkingRain is now offering the following new products: actiVwater lemon lime and orange mango, twist lemon organig and pink mango, and a new SKU of pink twist to celebrate cancer awareness. actiVwater is also now available at all 7-Eleven locations in Seattle, Washington and Portland, Oregon.

Icio. Icio is a purified bottled water infused with natural extracts. This new product comes in four SKUs: Peppermint, Cucumber Lemongrass, Lemon Basil and Apple Pear. It is sold in 12 oz. flasks. This new product is seeking distribution in Southern California.