When high-pressure processing (HPP) emerged as a force in CPG about a half decade ago, the non-thermal alternative to heat pasteurization was heralded as a powerful disruptor in the beverage industry. Cold-pressed juice companies, promising better tasting and more nutritious products with longer shelf lives, stormed the cold boxes with ultra premium price points. Brands like Blueprint, Evolution Fresh, and Suja became early leaders in HPP juices, and were soon followed by a myriad of startups launching in natural and specialty retailers, and the category that had been revolutionized by Odwalla and Naked 20 years prior was revolutionized once again.
Today, however, cold-pressed juice has plateaued. While consumers are seeking out healthier beverage choices, the HPP beverage space – which is majority juice – has seen only 5.4 percent year-over-year growth between August 2017 and 2018, compared to 31.5 percent growth the year before, according to SPINS data.
Speaking with industry leaders today, many in the HPP and juice spaces now recognize early mistakes. Brands failed to communicate efficacy to mainstream consumers, high price points led to price wars, and the space quickly saturated. But there are also paths forward, including new packaging formats, consumer education efforts, and the embrace of new categories. While cold-pressed juice may be slowing down, it is by no means dead, and in many ways it’s experiencing the natural growing pains of any emerging category.
The Beginning: Stagnant Waters
2012 was a pivotal year for the HPP beverage industry: Starbucks purchased Evolution Fresh, BluePrint launched its single serve line, and Whole Foods Market was looking to reinvent a stagnant category.
Errol Schweizer, who was a VP of grocery at Whole Foods at the time, told BevNET that marching orders had come down from co-CEO Walter Robb to pick a category and refresh it. Kombucha had just been upended by what Schweizer calls the “Kombuchapocalypse” – a mass category-wide recall in 2011 stemming from an inability to control the sugar and alcohol levels of the drink, which resulted in roughly $30 million in lost sales. Whole Foods needed to fill a gap in the beverage space, Schweizer said, and HPP presented an opportunity.
“Refrigerated fresh juice was dominated by Coke and Pepsi with Naked and Odwalla, and they were just yesterday’s news,” Schweizer said. “We weren’t growing sales because they customer just didn’t care anymore. It wasn’t the thing.”
Whole Foods has a long history of partnering with brands to build categories, and Schweizer and his team proved willing to clear shelf space for the new, premium priced offerings. Investors followed, dumping money into brands ranging from Suja to Temple Turmeric and beyond.
But around 2014 there was “a glut” of new brands in the space, he said, and by 2015 oversaturation had caused sales to dive. Today, Schweizer views a culling of the herd as a positive, and retailers decisions to pull underperforming brands is a benefit for the category as it rebounds and looks ahead.
Failure to Communicate
Joyce Longfield, chairperson of the Cold Pressure Council, which advocates for HPP as a processing methodology, told BevNET that many of the cold-pressed juice category’s recent troubles trace back to the early decisions by some brands to rely heavily on diet trends to sell product. Brands entering the market at ultra premium price points – selling for upwards of $10 per bottle – were able to bring in the wellness consumers who sought out juice cleanses and understood the value of alternative pasteurization methods. But too often, she said, brands failed to realize that they were preaching to the converted.
The efficacy of HPP, which preserves nutrients, enzymes, and flavor, was often lost on the average consumer, she said. Messaging was not utilized in a way that spoke to the wider audience. Brands took for granted that cold-pressed juice would become a natural part of the American daily diet.
“Right from the get-go, the people who live that lifestyle and drink cold-pressed juices and do juice cleanses, they don’t need to be convinced. They get it,” Longfield said. “I think a lot of the people who ran these companies at the time just assumed everybody would catch on to it and be a part of it. But that’s not the case. Even to this day I still talk to conventional consumers who don’t have a clue what a cold-pressed juice is and wouldn’t think to ever buy a green juice.”
The Cold Pressure Council was founded in part to facilitate a shift in consumers’ mindset, and the introduction of the High Pressure Certified seal is a major step toward helping mainstream consumers understand the significance of HPP, Longfield said. Evolution Fresh became the first brand to achieve the certification and place the logo on its bottles.
Evolution Fresh president Ryan Ziegelmann wrote in an email to BevNET that the seal will boost education efforts with both consumers and retailers as more brands adopt it.
“As people seek to serve functional needs naturally with clean labels, we also see the category morphing and changing into what we now refer to as Premium Functional Beverages,” Ziegelmann said. “It’s an acknowledgment that we are delivering towards a broader nutritional and functional benefit agenda.”
Price Point Hits Hard
In Longfield’s view, price wars have contributed to the category’s stagnation and at times have compromised the integrity of the product. When Suja dropped the price of its juices in Whole Foods to $7.99 per bottle, she said, it created an immediate need for other juice brands to bring down their SRPs. Those pricing pressures led some brands to reformulate with cheaper ingredients.
“It just kind of seems like from there all the focus was about the dollar,” she said. “And whoever can sell for a more affordable means on an everyday basis is who is going to win in the end. Unfortunately, I feel like everything kind of delineated from that point.”
According to Cyrus Schwartz, CEO of distributor and HPP toll processor Dora’s Naturals, dollar sales for cold-pressed juice are currently “flat at best.” Both unit sales and dollar value have fallen in the past two to three years, he told BevNET.
“What was selling for $10 a bottle is now selling for $5 a bottle,” Schwartz said. “Our dollars in what I call the green juice/cleanse space is probably half of what it was a few years ago.”
Dora’s was an early believer in the HPP juice category, having picked up BluePrint for distribution when it was only carried in four New York stores. Examining the space today, Schwartz said that he sees green juice “holding its own” but that innovation has only minimally offset declines in sales. Rather, hydration-focused HPP juice brands, such as HoneyDrop and WTRMLN WTR, have performed better at lower price points and with a stronger functional positioning. Although the category has struggled, Schwartz remains bullish that different kinds of innovation outside of juice cleanses can spur growth in the space.
Stay The Course or Branch Out?
The cold-pressed juice pioneers are now building larger portfolios outside of the single category in order to stay on top of consumer trends. Blueprint has added drinking vinegars to its offerings, while Evolution Fresh has recently announced a line of kombuchas. San Francisco-based brand Forager Project has pivoted significantly, dropping most of its juice offerings to focus on plant-based milks and yogurts. Suja has expanded as well, adding new lines for all three of those categories.
According to Ziegelmann, Evolution Fresh has sought to innovate in order to remain “fresh and authentic while offering more functional benefits.” In the last two years, he said, the brand has converted nearly all of its juices to organic, introduced plant-based protein and probiotic lines, and the addition of its organic kombucha line is the next step forward.
“At the end of the day you have to still make strategic business moves,” Longfield said. “As much as I might be an advocate of HPP through all my years of consulting, I say to everyone HPP has to make sense for your business. It needs to bring added value for your business. When I look at a company like Evolution Fresh or Suja staying committed to the technology for their cold-pressed juice line, it makes perfect sense for them to go into kombucha.”
The result, Longfield added, is that many brands now look at themselves as overall beverage companies, not just juice companies anymore.
According to Schwartz, juice shots have become a strong mover in the category, but that space has already become overcrowded. The space was initially built by brands dedicated to shots, such as JUS by Julie and KOR, but an increasing number of juice companies are adding shot lines, including Suja. Schwartz said that while it’s too soon to tell, it’s likely that consumers may be more interested in the brands only playing in the shot space.
“I think consumers might want to have a shot that has a different identity, they want something they can look at differently,” he said. “They want a brand they feel is kind of focused on that concentrated nutrition. So, we’ll see.”
For Schweizer, although the category has taken hits in the past few years, the change to the beverage industry that HPP juice has brought in will not be undone.
“It’s a paradigm shift,” Schweizer said. “Fresh juice has existed, it was called Tropicana and Minute Maid, then it was Odwalla and Naked. This is a paradigm shift in beverages that we’re still in the middle of. When I hear ‘evolution,’ or when people use those wonky terms, I think it’s more concrete. I think customers have shifted to these products and are going to continue to buy them. I don’t know that the growth rate will continue, the momentum will probably slow down, but you’re still talking about a huge volume of product that didn’t even exist a few years ago and is now becoming mainstream.”