Beverage industry sees flavored water as a liquid asset

June 02, 1993|By Linda Giuca | Linda Giuca,The Hartford Courant

Clear. Fruity. Sweet. Effervescent. Look how far that most basic of thirst-quenchers -- water -- has come.

Bottled spring waters gained popularity in the 1970s, but the '90s will be known for a new twist: sweetened sparkling H20 infused with fruit flavors such as key lime, peach and black cherry.

These refreshers are racking up impressive sales in a category the beverage industry calls "New Age" drinks.

"New Age is virtually anything non-alcoholic that isn't a traditional soft drink -- that is, not a dark cola, lemon-lime, root beer or flavor line such as grape or orange," says Greg Prince, senior editor of Beverage World magazine, "and has a 'sheen' to it, meaning, essentially, it reeks of newness, freshness and 'betterness.' "

Water -- that is, water whose source is other than the tap -- is in fashion. While traditional soft drink sales have gone flat, 1992 sales of full-flavored waters jumped by 49.2 percent, according to the Beverage Marketing Corp., which tracks the beverage industry. An $845 million business in 1992, the category will grow to a $1.26 billion by 1995, industry experts predict.

"As the soft drink industry moves so dramatically toward the Ray Charles type of promotion and other types of promotion, they are targeting the general population," says Ron Cotterill, a professor of agricultural and resource economics and head of the Food Marketing Policy Center at the University of Connecticut. "They're doing very well with that type of promotion.

"Having said all of that, that kind of focus may miss a niche -- those people who may want to sit quietly on a veranda or walk along Rodeo Drive in Beverly Hills and want to sip a Clearly Canadian."

People looking for something to quench their thirst or just a different beverage to wash down a sandwich are willing to pay for that privilege. A 4-pack of 10-ounce bottles of flavored waters retails for about $3 to $4; a 6-pack of 11-ounce bottles of Coke is $2.99 to $3.49.

Different and lighter

Consumer demand is only part of the reason companies such as Heublein Inc., the Seagram Beverage Co. and Coca-Cola have recently introduced versions of these fruity waters to compete with existing brands such as Clearly Canadian. Heublein's American Orchard line, released last month, is in markets in Hartford, Conn.; Washington; Atlanta; and Charlotte, N.C. Both Coca-Cola's Nordic Mist brand and the Seagram Beverage Co.'s 2 Calorie Quest are distributed nationally.

"These drinks came out of the premise that as the population ages, people become more conscious of the need for a healthier diet, the need for a healthier lifestyle," says Peter Collins, Heublein's director of sales and marketing for New Age products. "Sparkling water is perceived as being better for you than Coke."

"People want to try New Age beverages because they offer something different and, in most cases, something lighter, healthier, more natural," Mr. Prince says. "Heaviness in soft drinks seems to be a concern these days."

Who drinks these waters -- or, at least, who is targeted by the companies' marketing departments?

"The people who are drinking New Age beverages are people who are drinking fewer traditional soft drinks than they were before," Mr. Prince says. "Most companies use the most attractive demographic they can think of to describe the New Age consumer -- professional, 18 to 49, upscale, white teeth, the whole bit."

In response to this demand for "light and healthy," new soft drinks such as Tab Clear and Crystal Pepsi are mimicking a characteristic that comes naturally to the full-flavored waters -- clearness. This see-through quality "implies the absence of negatives such as preservatives," Mr. Collins says.

Some consumers also may equate this clearness with an absence of calories. For the most part, these new flavored waters contain fewer ingredients -- and few, if any, preservatives -- than traditional soft drinks. The ingredient list is short: water, fructose and fruit flavor.

The fructose is the key that, unlike plain water, these drinks are not calorie-free. An 11-ounce serving of Clearly Canadian or Nordic Mist contains 99 to 113 calories, depending on the flavor. The exception is the new 2 Calorie Quest, which is sweetened with Nutrasweet and contains two calories in a 10-ounce serving.

"In my book, [a sweetened, flavored water] is a soft drink," Mr. Cotterill says. "It's not exactly a health product. It's a soda more than a bottled water."

The Seagram Beverage Co. decided to go after the "diet" niche in this category. "A lot of people are drinking [full-flavored waters] and thinking they're getting a free lunch," says Mark Taxel, executive vice-president of marketing for Seagram. "They think there are no calories. Some people will continue to drink thembecause they love the taste. But others will say, 'Hey, I don't want the calories.'"

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