SUGAR LAND — They’ve been entrenched in the cola wars for decades, but it’s the juice war that has mobilized Coke and Pepsi most recently.
Last year, Coca-Cola Co.’s juice division, anchored by Minute Maid and its not-from-concentrate counterpart, Simply, pulled ahead of PepsiCo’s Tropicana and Dole juices. Now Sugar Land-based Minute Maid has a five-year plan to widen the margin of its market dominance, targeting younger consumers and the health-conscious with new products, new packaging and a new ad campaign.
“We think we can grow our market share by 50 percent,” said Mike Saint John, president of Coca-Cola’s Minute Maid unit, which includes Simply and several other brands, among them Hi-C and Five Alive.
It’s an ambitious plan, but beverage industry analysts say Coke is buoyed by Simply’s rapid growth trajectory. The juice line launched in 2003 and is expected to become a billion-dollar business this year.
“Most new brands in the beverage industry are very hard to establish,” said John Sicher, editor of the trade publication Beverage Digest. “Coke established a bona fide new brand, which has been very successful.”
Conditions are ripe for the growth of the juice industry, Sicher said. After taking a hit in the early part of the last decade, when carb-consciousness was at its peak, juice sales saw overall improvement last year for the first time since 2001.
“I think today that carbohydrate concern is much, much less,” Sicher said. “I think that the diminution in concern about carbohydrates has given Coke and Pepsi more impetus to think proactively about their juice business.
“I think there’s going to be a lot of innovation from both Coke and Pepsi in the refrigerated juices this year.”
Saint John, a 26-year veteran of the Minute Maid company who has been president for the last five years, showed off Minute Maid’s newest products and packaging last week from the company’s Sugar Land office.
Minute Maid has been headquartered in Sugar Land for the past year, after moving last February from the downtown Houston offices it had held since the 1960s, when Coca-Cola acquired the Houston com- pany Duncan Foods. With 400 employees and contractors, the Sugar Land office is the base of management operations for Minute Maid and its affiliated brands. Minute Maid has roughly 2,800 employees nationwide; its closest bottling plant is in Waco.
Minute Maid’s recent overhaul includes everything from changing the labeling on its orange juice cartons to new single-serve containers that will debut throughout the first and second quarters of this year. It has introduced new juice flavors: strawberry kiwi, pomegranate lemonade, and pomegranate blueberry, for a few examples. And it has unveiled a new line of “natural energy” drinks, enhanced with yerba mate, a South American plant that contains caffeine.
All are aimed toward a broader market than Minute Maid has courted before. The company is wooing young adults, men and women, in the 25-to-39 range.
“Typically, we’ve been targeting moms only, in a slightly higher age group,” Saint John said.
The company’s new advertisements, which will air this year, pursue the same ends. A Simply ad focuses on the health benefits of natural ingredients. A Minute Maid ad features a man in his 20s who finds himself heroically transformed by yerba mate’s stimulant effects.
“Minute Maid has been a very traditional advertiser,” Saint John acknowledged. “Typically you’d see moms sitting around the breakfast table with 2.3 kids — kind of a Leave It to Beaver atmosphere. Our new advertising goes after a younger audience. It’s much edgier. It uses humor.”
The company has also aggressively increased its retail presence: Its products are sold in Whole Foods now, and in club stores like BJ’s.
“Two years ago we weren’t in any convenience stores,” Saint John said. “Now we’re in 20,000.”
Minute Maid has made forays into restaurants as well, starting with Whataburger, where Simply Orange juice has replaced Tropicana.
“We want ubiquitous availability of all our brands,” Saint John said. “Everywhere Coke is, we wanted to have Minute Maid or Simply.”
Emphasis on health
The new ads and packaging have a clear focus on health benefits. A Coca-Cola news release says the redesign “communicates the nutritional goodness inherent in the juice and evokes the imagery of whole fruit.”
While eating whole fruit is still better for you, and juice is a significant source of calories and sugar, it does have health benefits, especially when compared with soda, said nutritionist Roberta Anding, the dietician for the Houston Texans and a spokeswoman for the American Dietetic Association.
“It doesn’t mean you get to drink as much of it as you want,” Anding said. “Even healthy food can make you fat. But if you’re going to drink a caloric drink anyway, that’s a much better choice.”
Anding believes the impetus behind much of the new marketing is to undo the bad rap juice got during the low-carb craze. While she’s not a fan of the yerba mate products — “Do we need more stimulants? I don’t think so” — she lauds the research that has gone into enhancing other Minute Maid products.
“Their ‘Heart Wise’ orange juice has been clinically proven to reduce cholesterol,” she said. “That’s a hit-it-out-of-the-park home run to me.”
It was the success of the Simply brand — more expensive than Minute Maid, and not from concentrate, targeting what Saint John describes as more of the “natural, organic” customer base — that catapulted Coke’s juice line past Pepsi’s last year. Simply itself holds almost 10 percent of the juice market share, less than a decade since its inception. Minute Maid holds 14 percent. Combined, the Coke brands capture 23.3 percent of the market share, compared with 21.8 held by Pepsi’s juices, according to Sicher’s data. Saint John expects to expand Coke’s share to 33 percent by 2015.
Spokesmen for Pepsi’s Tropicana brand did not return calls seeking comment on their initiatives and innovations.
Soft drinks still king
The changes under way at Minute Maid’s Sugar Land office aren’t likely to ripple broadly through the Houston community, although the company has been hiring some extra staff and contractors as new initiatives get up and running.
While juice seems to be on an upward swing, analysts say there’s little chance it’ll unseat soda as America’s favorite drink anytime soon.
“Soft drinks are one of the top 10 things we consume in this country,” said Harry Balzer, a beverage industry analyst for the consumer research group NPD.
While juice didn’t make the top 10, Balzer said, “it is the number three most popular thing we consume in the mornings,” giving it a huge market in its own right.
“When there’s a lot of people interested in the category, there’s a lot of diversity that comes out,” he said. “You probably haven’t seen the end of that.”