Juices The Juice Squeeze: With major brands in transition challenges and opportunities abound (with Brand News)

By Martín Caballero

With major brands in transition, challenges and opportunities abound

In the later 1950s, residents of New York City looking out at the city’s ports could often fi nd the familiar sight of the S.S. Tropicana, an 413-foot, 8,000-ton steamship that made a weekly trip up the Atlantic coast from its loading point in Port Canaveral, Florida fi lled with precious cargo: stainless steel tanks holding a total of 1.5 million gallons of fresh-squeezed orange juice. Until water transport was eventually scrapped for rail shipping in 1962, partly in an effort to reach the burgeoning Midwest market, Tropicana’s fl agship steamer served as a life-sized representation of both Americans’ insatiable thirst for the citrus juice and of the engineering and logistical feats required by the fruit company to fi ll that demand.

Fast forward to 2021 and that ship metaphor takes on a wholly different meaning. Despite reporting sales growth in 2020, Tropicana had been resembling a rusty, dated cruiser for much of the past decade, as a variety of practical challenges, from distribution issues to encroaching competition from non-juice brands, combined with the anti-sugar movement to create a perfect storm of disruption for the category. The Florida-based company isn’t the only one feeling the squeeze: over the last 12 months, two other legacy brands — PepsiCo’s Naked and Coca-Cola’s Odwalla — have been either sold or divested completely, while Suja, once considered an integral piece of Coke’s strategy to pivot away from soda and into more natural categories, was acquired by private equity fi rm Paine Schwartz Partners in July. Though names like Bolthouse Farms (itself sliced off from Campbells back to private equity a few years ago) and Evolution Fresh still remain, many of the of the breakthrough category brands from the past decade — Daily Greens, BluePrint, Juice Served Here — are either gone or barely pulsing.

Yet if Tropicana and the like have been decommissioned, a new generation of juice brands are charting their own course through the market with considerably more nimble vehicles. Rather than simply chasing the cooler space left behind from the departure of heavyweight category names, this group is seeking to redevelop the juice space from a different perspective by leaning into functional ingredients and use-specifi c products, embracing innovative packaging formats and

by making it easier for their target demographic to get their hands on products, regardless of where they live or how they shop. The end of the “big juice” era marks the beginning of a new chapter for the category — but where the story goes is still far from certain.

Beverage Giants Move On

Not long ago, juice was seen as a healthier alternative to soda, and as a way for U.S. beverage giants to diversify their portfolios with a natural, healthfocused product that could offset declining soft drink sales; there’s a reason why Pepsi named its since-shuttered emerging brands division after Naked.

Compared to that, things in 2021 are pretty much upside down: not only are sodas as popular as ever, but the big bets that conglomerates like Pepsi, Coca-Cola, Hain Celestial and The Campbell Soup Company made on juice have all failed to pan out (the exception being Starbucks, which owns premium cold-pressed brand Evolution Fresh). Even as technology has helped improve product quality and shelf-life, the deck remains stacked with logistical problems and extra costs, not to mention long-term declines in consumer demand.

Many of those issues have been an ongoing challenge for juice makers, but this year, corporations determined that they simply weren’t worth the trouble anymore. Divestment and a culling of bulging brand portfolios has been a consistent theme across the major industry players over the past year, which has seen Nestle Waters offl oad its U.S. water business and CocaCola put long-standing brands like Tab and Zico out to pasture. But the biggest moves have come in juice — fi rst with Coke’s closing of Odwalla in July 2020, and followed this year by the exits for Suja, Tropicana and Naked. The motivation, according to Euromonitor’s Howard Telford, is to keep the focus on a smaller group of high-performing categories — water, energy drinks, coffee and carbonated drinks, mainly — rather than continuing to work in a challenged segment.

“In part, the news of Tropicana and Naked refl ects the uncertain role of fruit juice in the consumer’s routine long term and the ongoing concern about sugar, particularly in North America where Tropicana is largest,” wrote Telford in August. “While the category in the US enjoyed a boost in off-trade sales in 2020, with consumers seeking more vitamin C for immune support, the long-term trend has been one of decline. The role of fruit juice in future consumers’ diets will look signifi cantly different in terms of portion size, functional need and packaged versus unpackaged formats.”

For Pepsi, having two of its fl agship brands stalled at midsingle-digit dollar share of a fragmented, low-growth category no longer made sense, despite those brands bringing in $3 billion in revenue in 2020. While consumer interest in products with immunity boosting ingredients helped the brands grow around 9% in 2020, years of declining sales prior suggested that the reversal could be temporary. Meanwhile, the fl uctuating nature of commodities (like orange juice futures, for example) makes margins on juice-based beverages inconsistent, at best; according to Credite Suisse, Pepsi’s juice EBITDA margins (12%13%) in 2020 lagged behind its overall numbers (18.6%). Analysts at Goldman Sachs noted that the deal puts Pepsi “one step closer” to achieving its goal of approximately 15% margins in its North America business, with proceeds from the sale going to fund growth for hot brands like Mountain Dew, Rockstar, Gatorade and bubbly. It also means unloading some hard assets in the form of Tropicana’s sprawling 285-acre manufacturing base in Bradenton, Florida, which processed around 4 billion oranges annually as of 2019. Yet the deal would likely not have been possible without some additional incentive for Pepsi, which arrives in the form of the joint venture. Under the terms of its agreement with PAI Partners, Pepsi will retain a 39% non-controlling interest and control exclusive U.S. distribution rights to the portfolio for small-format stores and foodservice via its refrigerated DSD network. That architecture will allow the soda giant to hand off product innovation and scaling to PAI, while it focuses on serving customers in “arguably the most attractive segment of the portfolio” because of its relatively high margin, according to Goldman Sachs analysts. “This joint venture with PAI enables us to realize signifi cant upfront value, whilst providing the focus and resources necessary to drive additional long-term growth for these beloved brands,” said PepsiCo Chairman and CEO Ramon Laguarta in a press release.

But the recent moves are mainly about unloading an expensive, complex business in favor of focusing on simpler and stronger ones: as Laguarta mentioned at the time, the deal “will free us” to concentrate on growth categories like zero-calorie drinks, healthy snacks and better-for-the-planet products, like SodaStream. At the time of the Pepsi transaction, Credit Suisse analysts voiced support for the deal, noting that its structure “removes legacy brands at a fair price while also providing future optionality in a large category.” Goldman Sachs agreed in their coverage, noting that the proceeds from the sale “will strengthen the company’s balance sheet and enable PEP to make organic investments that will likely support further margin expansion over time.” Though the deals have yet to close, Pepsi’s current trajectory appears to be positive: the company reported a 20.5% increase in net revenue during Q2 2021, with Pepsi Beverages North America (PBNA) and Frito-Lay North America turning over $809 million and $1.3 billion in operating profi t, respectively.

The calculus for Suja was slightly different. At the beginning of the decade, the California-based brand seemingly ticked all the boxes as the next billion-dollar brand: controlling production from its own 20,000 sq. ft. facility, Suja quickly became one the country’s fastest growing beverage companies, picking up backing

from celebrity investors and PE fi rms along the way. By 2017, Coca-Cola had a 33% stake in the company (over $90 million invested), with an option to purchase it outright in 2020. The brand’s success with juice brought it into adjacent categories, like kombucha and shots, and after a sales dip last summer, Suja was recovering well under the leadership of CEO Bob De Borde.

Yet there was one glaring issue: the brand’s wide reach was dependent on its place aboard Coke’s network of refrigerated delivery trucks. According to Suja co-founder James Brennan, by shutting down Odwalla and its accompanying chilled DSD platform in July 2020, the soda giant effectively ended its relationship with the juice brand. The company subsequently bought out Coke’s stake and began shopping the brand, eventually agreeing to sell to PAI this July. The soda giant’s strategic shift away from chilled distribution also helped set in motion a similar process at Health-Ade Kombucha in August: Coke sold its stake in the brand, which was ultimately acquired by FBG.

New Horizons

Could there have been a different outcome for these brands? Perhaps. As seen with kombucha, cold brew and coffee creamers, developing shelf-stable versions of refrigerated products is one way to escape the restrictions of the cold box and expand the audience for a product; see sparkling juice brands like Izze and Hubble, or fruit-derived drinks like coconut water. Whether in the cooler or the ambient shelf, the competition has also changed — juice brands aren’t only jockeying with each other, but also a new generation of hybrid products: think plant-based platform brand Koia, juice-hydration beverage Lemon Perfect, or the range of high-pressure processed coconut-based drinks and smoothies from Harmless Harvest and Genius Juice.

For retailers, the COVID pandemic helped spark broad demand for refrigerated orange juice in particular, but the role that different channels are playing in growing the category is changing. Speaking on a BevNET panel in March, Jeff Crumpton, Retail Reporting Solutions Manager at SPINS, noted that smaller regional grocers are becoming centers of innovation for juice, and in some cases are growing at 2x compared to chain and big box stores.

But brands are adapting in different ways. For fresh-pressed juice bars, the approach has been to fi nd consumers where they live by simplifying their offerings: in the case of Pressed Juicery, it’s by refreshing its packaging and branding, or by expanding coverage by partnering with rapid-delivery platform goPuff, as with Pure Green. Elsewhere, brands like Uncle Matt’s Organic, which also recently underwent a rebrand, are using momentum from consumer interest in immunity drinks to push further into the segment, most recently with the launch of a line of “Ultimate Shots” with functional benefi ts. Juice shots, as readers likely know, have been a bright spot for the category in recent years, with names like KOR, Vive Organic and So Good So You all expanding distribution this past year.

Yet as younger brands push the envelope with innovation, the old fl eet will be looking towards their new private equity owners to guide them towards the horizon. Even Odwalla may see a new life, its rights acquired by investment fi rm Full Sail IP Partners in mid-September. Much remains uncertain, but you can’t count on one thing: the old map doesn’t work anymore.

Launched last June as a limited-edition seasonal product, Living Juice’s latest innovation -- Watermelon Juice fl avored with mint and lime -- has become a top seller at the US Open and at Hampton beaches this summer. With high demand for the fl avor, Living Juice announced plans to add it to its permanent lineup of cold-pressed juices.

Blending cold-pressed carrot and orange juice with ginger, turmeric and sea buckthorn, Garden of Flavor has launched an antioxidant-rich, upgraded version of orange juice called Turmeric Crush.

Cold-pressed and high-pressure processed juice brand Sofresco launched new functional shots with probiotics: Carrot Ginger and Apple. This new range contains one billion CFUs of certifi ed BC30 probiotic – a science-backed and natural probiotic ingredient that can help support digestive health, immune health, and may help support protein absorption.

NewTree Fruit Company has partnered with Arty’s Premium Beverages to debut the Supper Club Lite line of canned cocktails. Supper Club Lite contains 35% de-sugared fruit juice, zero sugar and less than 1 gram of carbs. The fi rst fl avors to roll out are Garden Party (Watermelon Cucumber Mint with Vodka), Gins ‘N Roses (Raspberry Lemon Rose with Gin) and Bramble On (Blackberry Mojito with Rum) which are available at select retailers in Wisconsin and Illinois.

Beverage brand Sarah’s Homegrown launched agua frescas made with real fruit sourced from Frey Farms – a womanowned business based out of southern Illinois. Sarah’s Homegrown agua frescas launched at Tony’s Fresh Market in Chicago beginning in September.

Sparkling juice maker Hubble – aka the healthy bubble – has added expanded distribution in Southern California to Jimbo’s Naturally and Erewhon. Hubble is also available in the region’s Whole Foods locations and also was recently included in the “Taste Tomorrow” section for emerging brands at the annual Kroger Wellness Experience in Cincinnati, Ohio. The brand will be launching new fl avors later this year. Following a brand refresh and website redesign, Happy Moose announced its entire portfolio of juices and shots will be available for nationwide shipping in the coming months. Currently, the brand’s immune-support wellness shots and cold-pressed juices are available for shipment to the West Coast.

Just under a year since its market debut, plantbased energy drink OCA has expanded distribution to fi ve Latin American countries and across the East and West Coast of the United States. In its fi rst year, OCA has gained more than fi ve thousand points of sales and in October is set to announce a national partnership with a large chain retailer in the U.S.. The brand, a venture between Marc Anthony and Beliv, has plans to launch in markets across China and Europe and will also introduce new fl avors and additional functional, plantbased line extensions.

Over the past year, Blue Monkey sparkling tropical juices has grown in its e-commerce and international distribution channels and by January 2021 saw a signifi cant increase in its international distribution across Japan, Hong Kong, South Korea, Australia, China, Kuwait and soon in France and the U.K. Blue Monkey Tropical Multi-Packs are now available in all Costco locations in the U.S. and Canada and will enter the retailer’s stores in South Korea and Japan by the end of this year.

Juice maker Suja Organic recently announced the launch of Suja Organic Elements, a line of sparkling, cold-pressed juice blends. Each bottle has one billion CFU’s of live probiotics, prebiotics, vitamin C, vitamin D & zinc to support immune and microbiome health. The enhanced sparkling line is made from high quality, organic ingredients, and processed using Suja’s high-pressure processing method. The line also includes adaptogenic ingredients like Reishi and Lion’s Mane mushroom for added functionality. Suja Organic Elements replaced Suja’s Sparkling Cold-Pressed Juice line in major retailers nationwide.

Teen-entreprenuer founded juice brand NIU is launching two new fl avors this Fall: Tropical Orange Eden is a blend of mandarin orange, vanilla and coconut water, while Tropical Berry features a mix of blueberry, raspberry, and assorted tropical fl avors. The

brand is also airing a new marketing campaign on ABC, CBS, and Fox that will run through the end of October.

Uncle Matt’s Organic recently launched a line of Ultimate Shots with functional ingredients and probiotics in three varieties: Ultimate Defense Shot, Ultimate Immune Shot and Ultimate Energy Shot. The shots are made with juice from 100% organically grown fruit that is free from synthetic fertilizers, pesticides and GMOs and blended with multi-functional organic ingredients and live probiotics for digestion and immune-support.

Chicago-based cold-pressed juice company Twisted Alchemy released a Margarita Madness Kit available for free shipping nationwide. The cold-pressed juice kit makes up to 75 margaritas, contains six bottles of coldpressed juice, recipes and instructions. The kit requires the addition of the consumer’s tequila of choice and comes in Grapefruit, Passionfruit and Persian Lime Sour fl avors.

This fall, Bolthouse Farms added two new functional varieties: Red Goodness fruit smoothie and Green Immunity Boost juice blend. The Red Goodness fruit smoothie provides 100% of the daily value of vitamin C and 90% of the daily value of vitamin B12 and includes a blend of apples, blackberries and strawberries. Green Immunity Boost mixes the juices of pineapple, cucumber, apple, and kale with immunity-support ingredients such as ginger, cranberry, pomegranate and goji berry. Green Immunity Boost and Red Goodness are both available in 52 oz. multi-serve and 15.2 oz. single-serve sizes.

Juice company Tropicana added four new SKUs to its premium beverage line: Summer Berry Bliss, Caribbean Sunset, Piña Colada and Strawberry Kiwi Sunrise. The new juice-based products come in 12 oz. and 52 oz. formats and are available at select retailers nationwide including Albertsons, HyVee, Meijer, Harris Teeter, Giant Eagle and ShopRite.

Pressed Juicery is now known simply as Pressed as part of its 360-degree rebrand from labels to storefronts. The new look is intended to refl ect sentiments of an uncomplicated approach to its product. The brand will also use the rebrand to make changes on its digital platforms and at retail including new logo and store design. The refresh also brings new membership perks and menu expansion to include wellness shots, smoothies, smoothie bowls and plant-based soft serve.

AMARUMAYU introduced two immunityboosting Superfruit Juices made with fruit that is wild-harvested by indigenous communities in the Amazon Rainforest. The two blends, Buriti and Camu Camu, offer a range of vitamins, antioxidants and minerals. The ready-to-drink juices are shelf-stable and are packaged in resealable, reusable and recyclable 12 oz. aluminum bottles.

Sol-ti introduced Dragon Fruit SuperAde with fertility benefi ts and digestive and immune support to its lineup of organic living beverages. The new drink also features prebiotics and vitamin C derived from the dragon fruit. It is made with fresh-pressed dragon fruit and blended with lemon for extra hydration.

Lori’s Original Lemonade is launching Baja Lemonade Tea in early October which will be available in all of its existing local retailer partners and Whole Foods throughout Southern California. The new product is made with organic black tea leaves, the brand’s classic real juice lemonade and a splash of lime and was inspired by Founder Lori Volk’s travels throughout the Baja Peninsula.

This year, Calypso announced a distribution agreement with Big Geyser, the largest independent non-alcoholic beverage distributor in the New York metro area. This partnership brings Calypso products to the fi ve boroughs of NYC, as well as Westchester, Nassau and Suffolk counties, representing access to 26,000 outlets.

Me & the Bees Lemonade hit a milestone and is now distributed to all 50 states in the U.S. The brand also announced the hiring of a new director of operations, Shon Whigham, to manage logistics, supply chain, warehousing and distribution. Whigham joined Me & the Bees after a tenure at Keurig/Dr. Pepper where he worked in operations and fl eet supervision.

Drink Simple has upgraded its packaging to highlight the sustainability of its maple waters by ditching plastic bottles for ecofriendly cartons made with plant-based and renewable materials. The brand’s relaunch in TetraPak cartons marks the latest step in Drink Simple’s commitment to environmental stewardship.

Sapsucker has taken on the tree water category by introducing two new fl avours available in 4-packs: The Orange One and The Grapefruit One. It also added its fi rst-ever tree water ready-to-drink vodka beverage to its lineup, with additional innovations set to be announced across its entire portfolio in early 2022.

¡CACTUS! Organic Cactus Water recently placed runner-up in the 2021 WBENC Sustainability Pitch Competition. The brand uses nopal cactus, which is grown without the need of irrigation and regenerates within two weeks of being cut, to make its waters.

Chicago-based ÈSSE Water launched Sparkling WellnÈSSE Water at select Target stores. The line features two SKUs – Lemon Ginger and Elderberry Passionfruit – that are packed with plant-based vitamins and minerals to support a healthy immune system.

LAURO began a partnership with LA Libations to expand the reach of its Sparkling Prickly Pear Water in Southern California through its incubation program, which has helped the company secure distribution with KEHE, UNFI, and POD. The company is engaging in a further partnership with Independent DSD Beauchamp to extend into the Molson Coors distribution network.

Cactus water brand True Nopal announced that it has fi nalized an agreement with Green Spoon Sales to expand distribution across the United States. Through this new partnership the brand’s True Nopal Prickly Pear cactus water will roll out to nine regions across the country.

Coconut water brand CoAqua announced its agreement with global beverage distribution leader, UNFI, which services over 30,000 locations nationwide. The fi rst phase of CoAqua’s coconut water distribution with UNFI will begin in the Rocky Mountain Region.

Organic beverage brand TREO has undergone a brand refresh to refl ect its ingredients on its packaging and label. Organic TREO offers low calorie (15-20 per serving), low sugar (1 gram) of hydration-support that is naturally sweetened with birch water as the key ingredient and each bottle contains immune-support from Vitamin C and Zinc.

The brand’s Cacao Water is now available online in a new three-fl avor variety pack for $18. Blue Stripes Urban Cacao Water is available in three varieties – Just Cacao, Cascara Coffee & Cinnamon and Chili, Lime & Cardamom – and offers hydration and gut-health support through antioxidants, magnesium and potassium. Cacao Water is all natural, has no added sugar and is available at Blue Stripes cafe locations in Nashville and New York as well as select Whole Foods and Erewhon locations across Southern California.

Beverage brand Body Intelligence EUPHORIA launched as the only nationallydistributed brand that features Kava and the only brand with verifi ed Immunity and Relaxation health claims. The beverages are plant-based, with vegan-friendly Vitamin D3, and are distributed nationwide through KeHE.

Pink Lady Apple is the latest new fl avor of fl avored coconut water from Harmless Harvest. The new fl avor contains real fruit juice and electrolytes and recently hit shelves at Whole Foods Market.

Following its 2020 debut at drive-in concert with The Chainsmokers, better-for-you energy drink alternative brand Once Upon A Coconut has begun distributing its caffeineinfused coconut waters to retailers nationwide this year. The brand’s two varieties – Sparkling + Energy and Pure – contain electrolytes and vitamins and minerals such as potassium, calcium and magnesium. The Sparkling + Energy variety also contains Vitamin C and the caffeine equivalent of a cup of coffee.