Aiming for Enhancement

By Max Rothman

Adapting to the millennial generation’s desire for variety and convenience (dubbed “the chill hustle” by MTV trendspotter Nick Shore at BevNET Live Winter 2012), a multitude of brands have altered their approach to beverages. It’s not just what the beverage is—it’s what you can add to the beverage. As a result, powder and liquid enhancers have further cemented their positions in the beverage industry, symbolizing the new-age thirst for portable interaction and healthy products.

“The do-it-yourself flavor is what the millennials are looking for,” said Bill McKay, CEO and founder of Ecosentials LLC, makers of Vitamin Squeeze.

With these consumer desires in mind, Vitamin Squeeze, a concentrated powder that the company suggests adding to water, is one of several examples of beverage enhancers that have molded themselves into what they believe resembles the millennial ideal.

McKay said that Vitamin Squeeze offers 120 percent of the daily recommended Vitamin C requirement, 100 percent of vitamins B3, B5, B6 and B12, 50 percent of vitamin D, and doses of zinc, antioxidants and electrolytes. These health factors, he argues, complement a way to enhance your water without turning it into a CSD. This combination has led to at least some growth in sales and distribution; Vitamin Squeeze, which McKay said had a revenue between $1 million and $2 million in 2012, can be found in 2,500 stores nationwide, including Safeway, Super Value, Albertson’s and H-E-B, among others.

“Customized flavor and the reduction of calories and sugar was big on my mission list and certainly on trend,” McKay said.

The hope of many brands following this form factor, or something close to it, is that it could lead to a MiO-like payout.

MiO is the liquid water enhancer launched in 2011 by Kraft Foods, the same one that rolled up more than $200 million in sales last year, according to a November story by Ad Age. The brand also featured a 30-second Super Bowl advertisement in February, affirming its status as the best-selling product in the beverage enhancer category. The commercial coincided with the release of MiO Fit, a sports-centric SKU that helps consumers turn water into a sports drink.

Following in MiO’s footsteps, Coca-Cola launched Dasani Drops in September. This liquid flavor enhancer doesn’t hide its obvious targeting of MiO’s market share, but that may not matter. With a distribution footprint and other resources as expansive and wide-reaching as Coke’s, Dasani Drops could develop into MiO’s primary competition. After announcing the release of the product, John Roddey, the vice president of Coke’s water, tea and coffee business, said that the soda giant sees potential in the nascent beverage enhancer category.

Another recently-released option, Crystal Light Liquid, which contains no sugar or caffeine and is gluten-free, is available in six flavors: Strawberry Lemonade, Blueberry Raspberry, Iced Tea, Mango Passionfruit, Peach Bellini and Pomtini. With a manufacturer’s suggested retail price of $3.99 per 1.62 oz. bottle, these flavors could appeal to millennials looking for lurid combinations over traditional flavors like grape, orange or cherry.

Banking on its brand name and high hopes for this category, even venerable Kool-Aid has gotten into the mix: it announced on April 15 that it will launch Kool-Aid Drink Mix, a sugar-free, squeezable liquid drink mix that comes in 1.62 oz. bottles (24 servings). Sugar-free Kool-Aid may sound disastrous, but this is a new age for the American pastime. And besides, an enhanced and reimagined Kool-Aid Man will be on hand to help market it.

However, aside from powders and liquids, other forms of beverage enhancers exist, such as Tubulars Vitamin Milk Straws by Unistraw, which was featured at the Natural Products Expo West in March. While the product treads uncharted waters (a definite risk for a startup), it takes an innovative approach toward encouraging dairy consumption with straws of four flavors: chocolate double, strawberry drops, banana bee buzz and peanut butter twist.

“As a drinking experience, we can provide fun that no other delivery system can,” said Brian Direen, chief business officer of Tubulars.

While the idea may seem kitschy, the straws also follow the theme that old standards don’t cut it anymore. Developing a unique identity and product line while still competing with MiO could catalyze distribution and sales, especially in the beverage enhancer category, which is really just mimicking the millennial life.

“People are customizing everything from their facebook page to their iPhone. They want their food customized and they want their beverages customized,” McKay said.