I recently took a vacation to one of my favorite cities in the world; my own personal Xanadu—San Francisco. (Like any self-respecting desk jockey with his head on straight I bookended my holiday vacation with a second vacation.) But the job follows you everywhere, of course, and I couldn't help but notice on every street corner, in every bodega, and in every refrigerator case the same thing that's popping up in just about every press release in my inbox—super-premium, high-pressure processed (HPP), bottled fresh juice.
Every other block boasted a pop-up juice stand that sold cold-pressed, elegantly bottled juices at upwards of $12 a pop. It's a trend that bucks the conventional logic of the beverage market, where price, volume and efficiency ensure a lasting shelf presence. This latest wave of fresh juice carries a premium price and a very low shelf life. It's a wonder it's developed into such a phenomenon.
For some perspective on the manufacturer's side, check out the video below, where Annie Lawless, co-founder of breakout juice brand Suja, talks about her initial anxiety over consumer sticker shock and how she learned to stop worrying about it.
So consumers have been wowed by the taste, the quality, the nutritional profile of this bottle of juice, and they're willing to drop $9 to follow you down the rabbit hole—for now. But is this trend sustainable? And will HPP continue to grab a sizable chunk of the juice market?
For more insight, I talked to Brad Barnhorn, a Bay Area local and a first-mover in the bottled fresh juice category—Barnhorn's company Fantasia Fresh Juice merged with Naked Juice in 2000. He compared the current wave in fresh juice to other defining moments in the beverage market's history.
"It's reminiscent of first generation of the fresh juice category," he said, "which was Odwalla, Naked, and we came in toward the end with Fantasia. Jamba Juice was the analog in the food service side. The two sides worked together to build consumer awareness around the category and validate the price point."
A similar dynamic is at work in the current phase of the market, he said. The prevalence of fresh-pressed juices for $6-$8 in a food service setting "allows bottle players with more of a convenience story be at a similar or slightly lower price point."
The natural progression now is for established players to beef up their supply chains and economies of scale to push that shelf price down a dollar or two in coming years. Barnhorn also sees trade spending amping up for brands placed in store sets with other HPP options to effectively compete on price.
But still, can HPP brands that trade at $8.99 or $9.99 compete long term with a non-HPP option like Naked that trades at $2.99 or $3.49? "I don't think the category, at a 2x to 3x premium over other juice options, has a lot of extendability," Barnhorn said.
And on the food service side, especially with the ascendance of Evolution Fresh (bought recently by Starbucks), there isn't a ton of headroom for dozens of HPP juice bars to break onto the national scene. "It's not going to be 25 to 30 brands" that can scale to such a meaningful position, Barnhorn said.
Nevertheless, the HPP category has claimed a respectable chunk of the fresh juice market. All signs point to strong category growth over time, but no one expects HPP to subsume the entire juice industry. Instead it's exemplary of the stratification of juice into value, premium and super-premium options, much like you'd find in any other food category.
So are all those pop-up juice stands in downtown San Francisco going to last? Maybe. Are they the next wave of Jamba Juices? Mayyyyyybe.