IT’S
ONE OF THE PARADOXES OF contemporary beverages. Moms swear they want
something better than soda for their kids to drink – nutritious would
certainly be nice, but if not that, then at least something that’s more
interesting to drink than plain water but doesn’t contain the sugar,
the empty calories, the artificial colors and sweeteners, all the bad
stuff. And don’t even talk about orange juice, the one-time default
choice that used to be a badge of parental care and responsibility. In
recent years parents have been read the riot act on that one. This all
makes it sound as though healthier kids’ beverages should be a whopping
opportunity for someone, right?
And yet, when you review the field of beverages that were launched
precisely to provide these healthier alternatives, it’s hard to find
anyone doing more than just surviving. Some aren’t even doing that.
Waddajuice has pretty much thrown in the towel on its efforts to raise
the capital that would have enabled it to resume production of its
juice-and-purified-water blend, even though it’s spillproof bottles had
proved a hit with moms in emporiums like Stew Leonard’s in the affluent
suburbs north of New York. White Hat Brands, marketer of Dog On It
fortified juice drinks, is out beating the bushes for capital to resume
production, even as it rethinks its basic premise. (These include the
ready-to-drink sector itself; it’s devising powdered beverages that
might allow it to dodge some of the punishing production and
distribution economics of ready-to-drink.) Even a well-financed,
carefully researched brand like Crayons has lurched from one restage to
another, burning through millions as it gropes for the branding and
formula answers that might click with moms and their brood.
So what’s the problem been? Talk to the developers of these drinks and
the first thing that comes through is that, nutritious or not, they’ve
found that they’re still battling against the rock-bottom price and
massive shelf presence of Capri Sun and its ilk. And they also blame
their target consumer. “Moms lie,” they say – meaning the same moms who
feel compelled in focus groups to insist that they would happily pay a
premium for better beverage choices for their kids act quite
differently in the store. (This seemed to be the case even before the
recession crimped spending on a wide range of products.) One can’t
argue that these marketers were naïve in believing the mothers in the
first place because, in the milk segment, it was moms paying a steep
premium for organic milk that ignited the broader organic sector in the
first place. And while the price points of some of entries definitely
would be a challenge to all but the most affluent families, the
disappointment has been shared even by a brand like Wild Waters, which
went out of its way to rig its economics so that it could get its
nutritionally enhanced waters onto store shelves at less than a buck a
bottle.
So is all this opportunity a mirage? Not necessarily. As the prevalence
of obesity rises, parents are concerned about what their kids drink,
and some influential retailers – from 7-Eleven to Toys ‘R’ Us – have
been setting up healthier-beverage sets to cater to them. It’s too
early to say whether those experiments will pan out but you can’t argue
that these retailers aren’t attuned to their customers. (And for
undercapitalized beverage marketers, a presence in those sets provides
a national billboard that could help a lot in building brand awareness.)
So if you can’t blame the consumers, then the problem may also be
simply that none of the healthier beverages in the market today has
completely nailed it. It’s a complicated trick to offer a distinctly
superior nutritional premise that gets past the gatekeeper moms while
also offering something kids – a finicky focus group, even when
tranquilized – actually want to drink. That means some concessions to
taste as well as more exciting branding. It’s not clear to me that the
latter amounts to no more than label imagery of wakeboarders or
cartoonish dogs. On top of that, if you’re going to be considerably
higher-priced than Capri Sun, it may help to come across as offering
some distinct added value for the money. This may be where brands that
are essentially selling diluted juice miss the mark: consumers may
bridle at the notion of paying more for something they can do in one
step in their own kitchen (even if few of them actually do).
Distribution is another conundrum: economics dictates that most brands
eschew DSD and instead take the warehouse route to market in order to
keep their price low – but in doing so, they find themselves waging
battle on precisely the Capri Sun-dominated grocery shelves that are
hostile to new brands, rather than in more impulse-oriented channels
where they might get a look from parents and their kids. Since most of
them are undercapitalized, they’re going into that battle with few
marketing weapons at their disposal.
The bright side of this is that these are a lot of levers with which to
play around until somebody gets it right. Roberta Greenspan, the mom
who devised the Wateroos brand of flavored water packed in juice boxes,
reminded me the other day that even familiar adult-skewing brands may
take a decade or more to hit their stride. Patience is key, she
counseled. With lots of kids apparently drinking brands like Gatorade
and Vitaminwater, there’s also a chance that fundamentally
adult-targeted brands could play the aspirational card to bring kids
aboard too – as Honest Tea is doing with its well-received Honest Kids
pouched juice line and Hint is trying to do by re-entering the kids
space with a boxed version of its unsweetened enhanced waters.
Somebody, eventually, should be able to figure it out. The question is
whether the segment’s more inventive players are able to hang in there
through these tough economic times. And whether those moms will finally
get scared enough of shopping in the “husky” section to make that
perseverance worthwhile.