In a step toward what would eventually be a sweeping victory, Miami-based soup-drink makers Tio Gazpacho advanced to the final round of six of the BevNET Live New Beverage Showdown. Hours earlier, Duane Primozich, EVP of Boulder Brands spoke to to why a seemingly obscure drink like Tio Gazpacho currently has the potential for success in the beverage industry.
“These nutso ideas are what everybody’s looking for right now” Primozich said. “Weirdo ideas like putting soup in a bottle and throwing it in the beverage case.”
Fittingly enough, when the results were announced later in the afternoon, Tio Gazpacho had not only advanced to the finals, but the company also received the majority of the 500+ person audience vote.
Primozich wasn’t alone in encouraging beverage upstarts to separate themselves from the pack. In his opening presentation on the key elements of building a challenger brand, Tyler Ricks, CMO of Peet’s Coffee stressed the need for such brands to truly disrupt their category conventions and change the ways consumers think. Ricks also spoke to the importance of taking the mentality of a challenger brand beyond a company’s mission statement.
“You have to drive that psychology deep into the mindset of the organization,” Ricks said. “It’s not enough to state it on paper. You have to live it and breathe it every single day.”
On a similar note, in a Q&A focused on navigating both strategy and passion, GT Dave, founder of GT’s Kombucha and a pioneer in the kombucha space, touched on the power of a company’s “soul,” calling a personal relationship with the consumer as vital to a brand’s journey as the strategic logistics of building a performing product.
“At the end of the day some people will say we’re just a product, but we always want to be more than that,” GT said. “We want to have an emotional connection”
For companies that are doing so, there is tremendous opportunity, particularly with natural products. In a presentation on channel shifting and consumer changes, Brian Reed of IRI and Kathryn Peters of SPINS reported significant growth in sales for natural refreshment beverages both in the natural channel and the conventional food channel. For the former, the 13.5-percent growth was attributed to store count growth and distribution point growth. For natural refreshments in conventional food channels, it’s 9.1-percent growth was attributed to an increase in distribution and promoted units.
“These are not normal growth rates,” said Peters.” They’re typically at low, single-digit growth. So [mainstream supermarkets] really see this as an opportunity to grow their brand. [Natural beverages] are in demand across all channels of trade, without a doubt.”
Reed added “in 2014, one of the things we’re seeing is that beverages are better for you. “Better for you” used to mean nutritious, now it means better quality ingredients. People are saying they still want a carbonated soft drink, but they want one that isn’t what the old model was.”
In what was perhaps the biggest surprise of the day, Reed and Peters explored how despite it’s seemingly white-hot popularity, the sales of coconut beverages have actually plateaued, with a less than one-percent growth. This was credited to the product’s servicing to mainstream channels in recent years, accelerating the product’s lifecycle. Similarly, the sale of RTD teas have also gone flat. However the sales of kombuchas, vegetables juices and RTD coffees are experiencing impressive growth across both channels.
And there’s even more opportunity outside of conventional and natural grocers. Glen Figenholtz, Division Merchandising Manager of Beverages and Snacks for Wallgreens spoke on how brands can win in the drug channels. Figenholtz reported an average of $25 million in sales as the threshhold for beverage upstarts to secure placement in major drug retailers like a Walgreens. Additionally, Colin Jones and David Johnson of CAJ International/ Omni Partners spoke on how companies can successfully utilize online store-fronts like Amazon, FreshDirect, and others.