By Larry Levin
Natural, organic and specialty beverages are exploding in the marketplace, outpacing conventional beverages in every channel. According to SPINS, certain types of beverages have seen massive growth in dollar volume over the past year:
+282 percent in functional beverages featuring turmeric
+62 percent in refrigerated cultured or fermented beverages
+52 percent in raw refrigerated juices with functional benefits
+22 percent in flavored sparkling waters
+19 percent in non-GMO project-verified refrigerated juices and functional beverages
With 36 percent of U.S. consumers actively seeking food and beverage products that help them meet their nutritional goals, natural/organic and specialty food and beverage items offer incredible opportunities for brands of all sizes. Smaller brands often use the natural segment as a way to get on the shelf as natural and specialty gourmet channels are great incubators to test health-oriented products before they are rolled out to the larger, riskier and more expensive channels.
The question many of these brands will eventually face is whether to stay in the smaller niche channels or move mainstream. It all depends on the brand’s goals. Some brands may alienate their consumer base by moving to mainstream channels too quickly or at all. Natural and specialty products can easily get lost in bigger, more conventional stores, and more spending is certainly needed on trade promotion in larger channels.
Of course, there are several examples of natural and specialty food and beverage brands that have smoothly migrated into mainstream channels and done well, such as Celestial, Kind, Keurig and Chobani. All of them have made their mark on their categories and, at IRI, we recently ranked them as New Product Pacesetters, that is, having one of the most successful new CPG product launches last year. They also prove that companies of different sizes can connect with consumers by delivering high-value products that enhance consumers’ daily lives.
Regardless of the size of your brand, there are three key areas to focus on when growing natural/organic/specialty food and beverage products:
1. Launch – Are your products on trend? Do they meet the key needs of today’s
consumers: simplicity, excitement and affordability?
2. Growth – Will you stay in niche channels or go mainstream? Will your decision alienate current customers or significantly hinder new growth?
3. Future – What resources will you put behind your brand in year two and beyond? Will you use the latest analytical tools to develop deep shopper insights and find new ways to grow?
CPG brands that focus on truly understanding their customers and delivering value to them are the ones that will be flying off the physical and virtual store shelves.
Want to drive disruptive innovation in food and beverage? View my recent video interview on this topic and/or email me at Larry.Levin@IRIworldwide.com.