Editor’s Note: Gerry Khermouch is the editor of Beverage Business INSIGHTS (BBI). BBI is an electronic newsletter, published at least 90X per year. BBI breaks important news developments; reports key trends and provides exclusive coverage of non-alcoholic beverages, including soft drinks, energy drinks, sports drinks, juices, teas and coffees. (This article also appears in the March 2011 issue of Beverage Spectrum Magazine)
For a few years now the impression has been spreading – promulgated by folks like me – that natural foods are rapidly going mainstream and that it’s only a matter of time before you can grab a 6-pack of kombucha at the local c-store. Hyperbole aside, is there much truth to that sentiment? As an informal gauge, I’ve found it interesting to observe the growing (if still small) numbers of natural foods exhibitors at the Natural Products Expo West that turn up as exhibitors at the NACS c-store extravaganza in the fall not long after their Expo debuts. That migration simply didn’t happen in such short order in the past.
These thoughts are prompted by my visit to the latest edition of Expo West in Anaheim, where I spent literally every minute of every day on the show floor and still didn’t cover all the beverage exhibitors. It’s a phenomenal show whose steady increases in exhibitors, attendees and overall energy level has seemed unstoppable. Even during the worst of the recent (current?) recession you couldn’t tell from a surface glance at the show floor that anything was amiss in the broader economy. You couldn’t say that even about NACS, which had seen similar blockbuster growth but certainly has more ties to the macroeconomic environment. Expo’s sustained ebullience no doubt reflected how the affluent tier of consumers pursued by Whole Foods marketers has been comparatively insulated from the ravages of the recession. But it also demonstrates natural food’s rapid inroads into the mainstream. All in all, despite the inevitable compromises you see some manufacturers making as they cultivate a broader audience, it’s been heartening to see.
Still, even though natural is moving toward the mainstream as a product class, at this year’s show, there were few among the individual newer products I spotted that seemed close to mainstream acceptance. This is not to say there weren’t quite a few intriguing entries. And there is always a lag inherent in the process of introducing items to Expo West and mainstreaming them into the general market. But as the coconut water example proves (more on that in a minute), sometimes things move quicker than you’d imagine.
The entries that intrigued me either harnessed an unusual ingredient, were dramatic and dead-on in their branding, or both. On the superfruit front, I sampled at least a pair of good-tasting coffee fruit entries, Kona Red and Bai, albeit very different in their formulations (Kona Red is a juice, while Bai is a water). Whether retailers and consumers may not be getting fatigued by the endless onset of new antioxidant-rich drinks is a subject I addressed in my last column. Ditto for Runa Guayusa, which harnesses a nutrient-rich Amazon plant in both loose-leaf and, soon, ready-to-drink formats. With kombucha enjoying a resurgence despite taste challenges to some consumers, it was no surprise to see a fair amount of interest surrounding an alternative probiotic-rich entry, KeVita. On the branding front, the baby boomer-targeted Ojo eyecare line launched by an ophthalmologist graphically riffs off eyecharts in an unmistakable way, even viewed from across the store. AmaZon Extracts offers an enhanced water fortified with Amazon superfruits – perhaps the explicit indication of added value that might allow it to escape the downward pricing spiral instigated by vitaminwater and SoBe Lifewater. Not least, that exquisite Chicago tea and coffee chain, Argo, has pushed into elegantly packaged, beautifully crafted RTD teas alongside the move of its stores into new cities like New York and Boston. All worth keeping an eye on, I think.
Of course, the accelerating spread of innovation beyond natural foods can’t be better illustrated than by coconut water. The segment was liberally represented at the show, in the form of established players Vita Coco, Zico, O.N.E. and Naked Juice, and by scads of smaller rivals in cans, glass bottles, plastic bottles and aseptic boxes.
It’s worth reflecting briefly on that segment’s rapid rise. Even the founders of the more successful brands admit that coconut water’s broad acceptance has surprised them. Who’d have thought coconut water wouldn’t spend long years as strictly a New York and L.A. thing? Yet during the industry’s recent supply squeeze, the complaints were just as loud from distributors in secondary and tertiary U.S markets.
That could be a sign that, with the spread of social media and the continued expansion of Whole Foods, we’re moving into an era where dissemination of healthy food concepts is nearly instant. More likely it reflected the crisp messaging of an ingredient that was positioned as an all-natural, unprocessed hydration alternative to items like Gatorade and vitaminwater. With Zico’s launch first of a concentrate-based bottled version and, at this show, a chocolate flavor that puts it into a more indulgent realm, we’re clearly entering a new phase. Will plays like that – as well as its increasing use as an ingredient in other common products, like teas and smoothies — move coconut water toward ubiquity among potential consumption occasions? Or do they harbor the risk of undermining the fresh-from-the-coconut positioning that got the segment this far? Tune in this fall to NACS, where some answers may emerge.