|Title:||United Kingdom top five juice and smoothie brands ranked by sales in pounds sterling and percent change for year ending January 21, 2012|
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TOP FIVE BESTSELLERS
Juices: XX w/e XX January 2012
fm y-c-y% Own label XXX.X X.X Tropicana XXX.X X.X Innocent XX.Xi XXX.X Copella XX.X j X.X Princes XX.XX -XX.X
Smoothies: XX w/e XX January 2012 SALES CHANGE
fm y-o-y% Innocent XXX.X X.X Own label XX.X XX.X Ella's Kitchen X.X X.X Naked X.X XXX.X Happy Monkey X.X -X.X
Innocent's move into chilled juices in 2010 was always likely to put the squeeze on rival juice brands. But what people perhaps did not foresee was that it wouldn't be its competitors in the chiller cabinet that would be hardest hit. It would be the ambient brands.
The migration from ambient to chilled juice has been evident for a while, but it has undoubtedly been accelerated by the smoothie giant's entry into not-from-concentrate juice. Innocent has not only capitalised on its ready-made fan base from its smoothies business, it has also benefited from the narrowing price gap between chilled and ambient - the result partly of from-concentrate juice suffering bigger commodity hikes than NFC and partly of heavy weight promotional and marketing activity from the big chilled players, not least Innocent.
Alongside PepsiCo brands Tropicana and Copella, it accounted for over XX% of branded featured space promotions in the juices and smoothies category last year [Assosia January to December 2011], with multipack deals helping consumers save, on average, more than [pounds sterling]X on every purchase.
The upshot is that while chilled juices & smoothies enjoyed XX.X% and X.X% respective value and volume growth, ambient grew just X.X% by value and actually fell in volume, by X.X% [Kantar Worldpanel]. Indeed, chilled juices & smoothies overtook ambient in terms of market share in 2011. And they're not about to take their feet off the gas, as Innocent marketing and innovation director Douglas Lamont attests. "We are investing in innovation, marketing and support for the category, whereas you see less of that from the ambient players," he says.
None of this bodes well for ambient suppliers already struggling to manage commodity price hikes well in excess of those faced by their chilled peers. While recent predictions point towards a softening in orange concentrate prices this year, costs have risen sharply over the past three years and the knock on effect on retail prices has been that the price differential between ambient and chilled juices is now negligible.
"The level of commodity increase in chilled NFC juices has been half that of ambient," confirms Razin Ali, brand manager for ambient juice brand Sunmagic. "Now the consumer can go to the supermarket and pick up NFC fruit juices at almost the same price as ambient fruit juices, so as a consumer you're a bit confused. You think ambient should be cheaper than NFC juice."
Another major reason for the shift from ambient to chilled, say suppliers, is the sustained promotional activity from chilled brands. "Price promotions are driving sales because savvy consumers are aware there has been an uplift in retail selling prices across the entire juice category, so they are more inclined than ever to buy only on promotion," says Joanna Watling, marketing director for Princes Soft Drinks.
To make matters worse for ambient, Innocent's arrival in juices has not just forced chilled rivals to raise their promotional and marketing games. Innovations such as its Juicy Drink for kids, launched last summer, and two blended juices, which came out in January, have also prompted a flurry of NPD from the big chilled players, notably PepsiCo.
In January 2011, it launched a range of still lemonades under its Tropicana brand that PepsiCo marketing manager Peter Charles says generated sales of around [pounds sterling]X
X in its first year. It has also brought out a host of new blended products. In June, it added a three-strong Tropicana Premium Edition range in Sanguinello, Orange with Kiwi & Raspberry and Pineapple with Mango & Lime flavours, and extended its Orange Creations range with the introduction of Orange & Pineapple and Orange & Raspberry variants.
While apple and orange continue to dominate the chilled juices fixture, Steve Jones, senior insights manager at SymphonylRI, notes strong growth in "interesting flavour combinations". Charles agrees that UK consumers are becoming more adventurous in their tastes. "With Tropicana Orange Creations, we've seen a real sense of consumers wanting to try new things, but what's interesting is that they seem to like it rooted in something they know, in this case orange."
Apple-based sister brand Copella, meanwhile, has benefited from the launch of an Apple & Mint variant. Another key growth area is seasonal products, says Charles, which is why last autumn, PepsiCo launched Copella Winter Warmer, a spiced apple juice intended for heating (see right). Early feedback has been very positive, he claims, adding that 'hot' juices have the potential to be the next big thing. "Seasonality is something that, from a retailer and brand point of view, is an interesting area to explore. Some categories do it in a much bigger way than has traditionally been done in juice."
There is also still plenty of potential to exploit in chilled single-serve formats, believe experts. They currently only account for XX% of total sales, but are growing faster than multi-serve formats as suppliers look to cash in on new consumption occasions such as lunchtime meal deals. Copella recently made its debut in multipack single-serve formats, which Charles says has contributed to an XX% increase in PepsiCo's single-serve business in the past year.
Pack formats have been very much on the agenda of late as suppliers break free from the traditional one-litre carton format and examine new ways of presenting juices and smoothies - either to create greater shelf standout or maintain a particular price point.
Innocent initially launched its juices range in cartons but found that "it didn't stand out from the competition and confused consumers who thought it was just another smoothie", according to Lamont. The range was relaunched in PET carafes in XXXml and X.XX-litre sizes, not only to differentiate the Innocent juices from rival products but also to keep the entry price point as low as possible. "It was a combination of those two things and we've not had any push back on that at all," says Douglas. "Consumers seem to have adopted it very comfortably."
With chilled driving so much of the traffic in terms of NPD, marketing and promotions, it is not hard to see why ambient volumes have taken a hit. Some brands have, however, managed to successfully row against the tide. Del Monte sales grew XX% to [pounds sterling]Xm [SymphonylRI XX w/e XX January 2012], indicating "there is still place for ambient in consumers' lives", according to Marnie Millard, commercial director of Gerber Juice Company, which owns the brand.
Despite Princes' XX.X% sales slump [SymphonylRIJ, Watling is similarly upbeat about the sub-category's prospects. "Ambient juice household penetration has held firm," she says. "Even though shoppers may be visiting the fixture less often, they still see juice as an essential part of their shop. This is good news for the long-term future of the category and we expect to see sales regain ground over the past year."
One of the key messages Princes will be pushing in a new campaign is the benefit of the longer shelf life of ambient juices and the fact they don't require fridge space until opened. "We've found that by investing in the education of our products, we can encourage consumers into new areas and, backed by our above-the-line brand investment, we can help introduce new consumption occasions for juice," says Watling.
Sunmagic is also running an above-the-line campaign to engage consumers with its new brand design. Last year, the company revamped the brand on the back of consumer feedback suggesting its key messages were not communicated sufficiently well.
"The logo wasn't seen as right at the time; it wasn't seen as fresh enough and the execution on-pack of some of the cues - such as our XXX% fruit juice message - weren't seen as clear enough," admits Ali, who claims the new logo and pack design have had a dramatic impact. "All those things have come together and we've never had so much coverage and new listings."
Sunmagic is one of the few ambient brands to have enjoyed sales growth - of X.X% in value to [pounds sterling]X.Xm [SymphonylRI] - something Ali attributes in part to strong NPD. In December 2010 it launched an Orange & Carrot variant and followed it with a Blood Orange variant towards the end of 2011. It also gained its first-ever listing in a major mult with a Fairtrade range in Ascia.
Other ambient brands are also stepping up the NPD, and supplier Closed Loop has made its presence felt with the launch of the Coldpress range it claims tastes as good as fresh (see box, psi).
But there's one area ambient has made few, if any, inroads into: smoothies. This remains very much the preserve of the chilled players, who have responded to the economic climate by doing all they can to make their offerings less prohibitively premium. Innocent, for instance, has resized its range, moving from one-litre to XXXml cartons and introducing a X.XX-litre SKU. The aim, says Douglas, was to split the packs "so we had a bigger one that represented better value in terms of pence per ml, and then the XXXml pack, which gave us a lower entry price point with consumers".
The switch seems to be working. Smoothie sales are up by more than XX% in both value and volume [Kantar], with sales of Innocent up by more than X% in both metrics [SymphonylRI]. The brand leader, however, was outperformed by own-label smoothies, which delivered sales growth of around a third, albeit from a smaller base.
One area it may be easier to maintain a price premium in is kids' juices and smoothies. Indeed, Innocent's kids' range is now one of the key growth drivers in smoothies, claims Douglas. The company ran its biggest-ever back-to-school campaign last summer and also launched a product for the kids' lunchbox market - Juicy Drink - developed in collaboration with parenting website Mumsnet. But Innocent is facing competition in the kids' smoothies market, with Don Simon launching Disney-branded smoothies for kids (see psi) and Heinz this week announcing the launch of smoothies for kids aged seven months and up (see pXX).
And across the market the price differential between smoothies and NFCs is narrowing, suggests Douglas - largely a result of pack size re-engineering - which is helping drive penetration into smoothies. It's potentially more bad news for suppliers of ambient juices, which may begin to see a two-way pull on sales from both NFCs and smoothies. All of which suggests ambient juice suppliers will need to formulate a game-changing strategy in 2012 if they're not to see their market share squeezed even further.
* Price inflation has been the key driver of the X.X% value growth in the market, with volume down X.X%.
* Falls in volume bought per trip may partly reflect tinkering with promotions away from the heavier, volume-driving mechanics.
* Penetration is at or close to saturation (XX%), so for long-term growth frequency of purchase will be the area to focus on.
* Chilled growth outperformed ambient, continuing the long-term shift in favour of the more premium sector. Volume sales declines in ambient are behind the overall decline in juice market volume.
* Chilled not-from-concentrate is the big winner, growing both from its existing shopper base and by stealing from other sectors, often via deals.
* The category's challenge is to manage the pricevolume balance of deals to sustain profitability without deterring shoppers.
Symphony IRI Group
Data provided by Symphony IRI Group, formerly named IRI. Driving the transformation of the consumer packaged goods (CPG), retail, and healthcare industries. Symphony IR I Group provides a unique combination of real-time market content, advanced analytics, enterprise performance management software, and professional services. Visit www.symphonyiri.co.uk for further information.
The take-home snapshot is produced by Kanlar Worldpanel. Kantar Worldpanel monitors the grocery retailer take-home purchasing habits of XX,XXX demographically representative British households. Call XXX XXXX XXXX or visit www.kamarworldpanel.com for details
"Now the consumer can pick up NFC fruit juices at almost the same price as ambient"