From The Summer 2005 Issue of Natural Grocery Buyer

Shoppers guzzle organic hot and cold drinks

Jennifer Alsever

Consumers grumbling about artificial ingredients in their bottled beverages may get relief from a new breed of organic products marching into grocery stores nationwide.

With names like Honest Tea and Bossa Nova, a number of companies now promise healthier drinks by infusing water with flavor and vitamins, taking advantage of antioxidant fruit flavors and introducing new kinds of caffeine and sweeteners. “There’s an effort by consumers to avoid artificial ingredients,” says Marcia Mogelonsky, senior research analyst at Mintel Research in Chicago. “People are getting scared that it might not be that good for them.”

A growing number of supermarkets, she says, are willing to take a risk on new organic drinks because they’ve seen the growth of organic and natural foods. Sales for organic beverages in 2003 grew 19 percent to reach $1.6 billion, according to Nutrition Business Journal.

Meanwhile, sales of soda pop, coffee drinks and conventional fruit-flavored drinks like Hawaiian Punch were nearly stagnant, up 1.5 percent between 1998 and 2003, according to Beverage Marketing, a New York consulting firm.

Though not organic, bottled water has led the nonsoda, ready-to-drink category. Now, a long list of fruit-flavored bottled water and vitamin-enriched bottled water products are flooding into stores.

One bottled water company, Trinity Springs Inc., says its product is as close to organic as water can get. The company said its water comes from a natural spring in Paradise, Idaho, that’s free from contaminants and pollution. The company received a “certified source” seal for purity from Quality Assurance International, which doles out organic certification.

Trinity’s president, Andy Mitchell, says the product has sold well in Whole Foods Markets and other naturals stores. His company now is expanding distribution to conventional supermarkets.

Bossa Nova Beverage Group in Los Angeles is one of several companies taking a stab at another crowded market—fruit juice—by offering drinks with antioxidants. Antioxidants are said to eliminate harmful free radicals that are produced from chemical reactions of electrons in the body. A number of companies use pomegranate and blueberry juice, which contain high levels of beneficial antioxidants.

Bossa Nova instead harvests rainforests for wild açai berries, which have a higher concentration of antioxidants than pomegranates. Bossa Nova touts 100 percent organic juice with agave sweetener.

Meanwhile, the magic ingredient for David Karr’s company is yerba maté, a leaf from a rain forest tree. It produces a natural type of caffeine and has a blend of 24 vitamins, 15 amino acids and antioxidants. This summer, Karr’s company, Guayakí Sustainable Rainforest Products in San Luis Obispo, Calif., will take on the crowded category of energy drinks like Red Bull, promising a “healthier” form of caffeine. The company already sells loose-leaf and packaged maté tea.

The 16-ounce ready-to-drink Guayakí Yerba Maté will come in three flavors: Traditional Mate, Raspberry Revolution and Empower Mint.

“You get a nourishing boost of clean energy,” Karr says. “You get clarity of mind and sustained energy. It’s great for working out or studying.”

Guayaki will face a tough battle for consumer dollars. “Just having a healthier product is not guaranteed success,” says Roger Dilworth of Beverage Marketing. “A lot of it is marketing and distribution.”

You’ll likely see more marketing from organic drinks that eliminate high-fructose corn syrup in favor of sweeteners such as organic cane juice or organic honey.

Honest Tea, based in Bethesda, Md., is making headway with its bottled organic tea, sweetened with organic honey, maple sugar and agave. Since its start six years ago, Honest Tea has hit sales of $6.5 million and gained a 60 percent share of the ready-to-drink organic tea market, says Seth Goldman, Honest Tea co-founder.

The company introduced three new white teas in January and will start selling its organic teas in Target and convenience stores, Goldman says. “We want to be available to anyone looking for a great-tasting beverage and not just someone who is looking for organic foods.”

Tea has become a big seller in organic beverages, says Mintel’s Mogelonsky. This summer, Boulder, Colo.-based Celestial Seasonings will introduce six flavors of organic tea packages. And Seattle-based Jones Soda, which sells regular soda, will roll out a new organic tea line sweetened with organic cane sugar.

Jones’ president, Peter van Stolk, says he wants to grab mainstream consumers who want half as many calories as regular teas but more sugar content than some organic products like Honest Tea.

Meanwhile, Healthy Beverage Co., a Newtown, Pa., firm, has put its twist on organic tea with its carbonated Steaz Green Tea Soda. The company’s 12 soda flavors are sweetened with cane sugar.

“We knew we had something special when we hit $1 million after 11 months in business,” says co-founder Eric Schnell. “We’re triple that now.” Half of Steaz’s distribution is now in supermarkets.

“America loves bubbles, the carbonation,” Schnell says. “It’s not the bubbles that are bad. It’s all the artificial colors and sweeteners and preservatives.”

Jennifer Alsever is a Denver writer. Contact her at jalsever@comcast.net.