These days consumers are reaching for more than simple refreshment; they want health in a bottle (or a can) and there are companies that are trying to give it to them. According to the latest consumer research, the beverage segment is one of the fastest growing markets within the nutraceuticals industry and also one of the user-friendliest when it comes to adding nutraceutical ingredients. However, with these ease comes challenges, as there are stil companies that focus on image over substance. Despite its growing pains, the functional beverage market continues to expand showing no signs of slowing down. According to SPINS, San Francisco, CA, the functional beverage category-as broken down into meal replacement beverages, lifestyle and wellness beverages, medicinal teas and isotonic beverages-grew 11.3% from $1.05 billion in May 1999 to $1.17 billion in May 2000 (Figure 1). New product innovations, marketing trends and diverse target populations are being explored everyday by companies who want to have a stake in the functional beverage game.


It Ain't Easy Being Trendy
We obviously live in a very trend-sensitive society and what's popular with mainstream America can change quickly. This keeps beverage companies on their toes in terms of market innovation and new products. Unfortunately it can also mean that all too quickly, beverages look the same, taste the same and contain the same nutraceuticals. It is the job of manufacturers to be innovative and responsive to consumer demand, while still keeping up with the science and safety issues.

And not everyone is up to the challenge. "There is definitely a trend toward the value-added category but companies lack creativity," said Mark Hall, senior vice president, Hansen's Natural, Corona, CA. "The new age beverage category's intent was to put out a product that was better for you than traditional soda. What is new is the healthful perception, which is sometimes justified and sometimes not, since marketing sometimes takes precedence over substance." He added, "In terms of this segment I see little innovation and a lot of companies jumping on the bandwagon."

Lynda Sadler, president, Traditional Medicinals, Sebastopol, CA, agreed, saying a lot of companies are doing "kitchen sink" formulas with no rhyme or reason. "You have to be able to substantiate your formula. These teas have no testing, no clinical trials or safety and efficacy data. We really need to use empirical information and eliminate what are started to be called 'Frankenteas,'" she said.

P.J. Sinopoli, director of public relations and professional communications for The Gatorade Company, a division of Quaker Oats, Chicago, IL, said that knowing what the consumer wants is also key. "The ultimate judges are the consumers and they are smarter than manufacturers give them credit for. The trend should be to listen to them. If you have a benefit to deliver you should do it honestly," she said. "It is possible to come out with exciting new products and still have the science."

Adhering to consumer demographics is what Minute Maid, Houston, TX, considers as well. Abigail Rodgers, vice president of innovation, said, "We are continuing to focus on the consumer trends of wellness and aging, which we look to as we deliver new products. There is a lot of growth potential in the market and the trends in wellness will help expand the category. It is also an easy-to-enter category and new brands and innovation keep the buzz going." She also noted that there are sub-trends. "For example, when you are looking at aging baby boomers, who are driving trends and have specific desires for health and beauty, they have certain expectations and are interested in immediate gratification and single serve products," she said.


The Growth Factor
The feeling among industry executives is split between those who feel the market has become saturated versus those who feel this market shows promise and future growth opportunity. Seth Goldman, president, Honest Tea, Bethesda, MD, falls into the latter camp. "There is tremendous room for growth in this industry," he said, speaking specifically about the ready-to-drink tea industry. "I would say if we tried this 15 years ago we would have fallen flat on our face because at that time America's appetite just wasn't ready [for iced tea]. Snapple has been one company that has helped grow the public's appetite."

Brad Barnhorn, founder and CEO, Fantasia Fresh Juice, Chicago, IL, added that growth has a lot to do with consumer education. "The growth in our segment is largely due to the consumer education as well as the labeling law enacted several years ago. That law alone has created much more awareness of product substance," he said.

With this growth comes a stronger regulatory presence, said Karen Lucas, vice president of marketing, Odwalla, Halfmoon Bay, CA. "I believe that functional products will continue to become mainstream because consumers are looking for nutritionally fortified products. In addition, FDA and other government bodies are going to get more involved in the regulation of the functional foods category."

Speaking of nutritionally fortified products, adding the most popular herbal, vitamin and mineral combinations certainly seems to be the way to go for some companies. Francie Patton, vice president-corporate communications, Ferolito Vultaggio & Sons, which manufactures "Arizona" beverages, Lake Success, NY, said, "The biggest trend is the addition of nutraceuticals. People have been adding stuff to their drinks for such a long time, but now it is really starting to take off."

John Bello, president and CEO, SoBe, Norwalk, CT, agreed, "The trend right now in the beverage market centers around value added, non-carbonated health drinks. Healthy refreshment is where the fish are biting."

Yet others remain cautious about jumping on the bandwagon. Taste, nutrition and price are three main drivers in the beverage market, said Carla McGill, Tropicana, Bradenton, FL. "With products coming out these days containing the 'herb of the day' there is a concern of taste and efficacy. The beverage market is getting crowded and we (Tropicana) are sticking to our values and taste and nutrition will continue to be very important to us."

In terms of beverages being an ideal delivery systems for nutraceuticals, Darius Bikoff, president, Energy Brands, Whitestone, NY, said, "Beverages work because people are ready to embrace a new concept. Beverages are also an impulse item for consumers-if it tastes great they will buy it again," he commented. "Liquid is a great delivery system for any nutrient because it allows the nutrient to act on the body immediately,"

But there are limits. Mr. Barnhorn of Fantasia commented, "While beverages are something people consume regularly and are a very natural format for supplementation, this does not mean that ALL beverages are good delivery systems for nutraceuticals," he said. "Fresh juice, for example, is already healthy; its not just because you put ginseng in it."

What follows is an overview of the latest in the field from manufacturers of hot and ready-to-drink teas and shelf stable and fresh juices (nutraceutical water is profiled in the following article.)


Shelf-Stable Beverages (Teas And Juices)
Honest Tea, Bethesda, MD, is moving aggressively to make its product line organic for its health oriented customers. In addition to making its newer products with organic ingredients, the company has converted its existing line into organic. On the new product front Honest Tea introduced Jakarta Ginger for summer 2000. Jakarta Ginger tea brings together green tea, ginger and lemon grass.

Beverage giant Snapple Beverage Group (SBG), a subsidiary of Triarc, White Plains, NY, has been busy recently with both its "Mistic" and "Snapple" brands. Making headlines last year with its Elements line, the company continues to expand it from six to 10 product offerings. The most recent additions include "Sky," a passion fruit drink that combines guarana, panax ginseng and schizandra; "Altitude," which contains ginseng, astragalus and echinacea; "Gravity," which is a blend of carrot juices and a medley of citrus flavors infused with echinacea, beta-carotene and vitamin C and "Meteor," a tangelo-based juice drink enhanced with gotu kola, Siberian ginseng and black currant.

Most recently the Mistic brand expanded with the addition of its "Zotics" line. Mistic Zotics debuted in May with a line of six drinks full of "exotic" flavors and enriching ingredients. The line includes "Marula Fruit," enhanced with vitamins A and C; "Mangosteen Fruit," enhanced with vitamins A and C; "Acerola Berry," with vitamins C, B2, B6 and B12; "Ginseng Green Tea," with ginseng and vitamin C; "Yuzu Fruit," with vitamins C, B2, B6 and B12 and "Pitaya Fruit," with guarana and vitamin C.

On the corporate front Triarc recently spun off its Snapple unit in an initial public offering (IPO). The new entity will be called Snapple Beverage Group and will include the Snapple product range, including the Mistic brand, as well as other beverage brands. Once a part of Quaker, Snapple was sold to Triarc in 1997. (See this issue's Industry News section, page 12, for more information.)

Rooted in celebrating the historical significance of tea, Tazo, Portland, OR, recently introduced four new organic teas. The new ready-to-drink products include a black iced tea, green tea, peach tea with a green tea base and a mango iced tea.

Ferolito Vultaggio & Sons, manufacturer of Arizona beverages, Lake Success, NY, recently introduced a line of herbally enhanced "Elixirs" under the Arizona brand name. The line consists of "Rx Stress," which contains green and black decaffeinated tea, panax ginseng, kava kava, chamomile, valerian root and vitamins B6 and B12; "Rx Health," which includes decaffeinated green and black tea, clover honey, echinacea, rosehips, licorice, vitamin C and zinc gluconate; "Rx Memory," which contains decaffeinated green tea, tropical citrus fruit juices, panax ginseng and vitamins A, C and E and "Rx Energy," containing tropical citrus fruit juices, schizandra, panax and Siberian ginseng, guarana and vitamins A, C and E.

More beverages introductions are also on the way at Ferolito Vultaggio. The company is coming out with a ready-to-drink line of teas and juices this fall in conjunction with Celestial Seasonings. The new line will include "Lemon Zinger," a decaffeinated black tea with rose hips, hibiscus, clover honey and lemon grass; "Green Tea Peach Blossom," which is sweetened with orange blossom honey and contains panax and Siberian ginseng and 100% natural peach flavor and "Tension Tamer Ruby Red," which contains decaffeinated green tea, tropical citrus fruit, chamomile, kava kava, panax ginseng and vitamins B6 and B12. Juices include "Sleepytime Herbal Cider," which contains apple, pear and peach juices, valerian root and chamomile; "Ginkgo Sharp Cran-Fruit-Blend," which contains cranberry, apple, strawberry and raspberry juices, ginkgo, rose hips and lemon grass and "Magic Energy Juice Boost," which contains mango, orange and pear juices, guarana, panax and Siberian ginseng and vitamins B6 and B12.

Smucker Quality Beverages, Chico, CA, currently encompasses the R.W. Knudsen Family brand, the After-The-Fall brand and the Santa Cruz Naturals brand. With respect to its R.W. Knudsen brand, Smucker most recently debuted "Visionade," which is a part of the "Simply Nutritious" line. Visionade contains lutein, bilberry extract, vitamin C, taurine, zinc and ginkgo biloba in a base of blueberry and cranberry juices.

Also in the new product spotlight is Smucker's "Rocket Juice" line, which has added three new organic varieties to its line-up. The new blends, "Space ACE," "Lemon Mint Echinacea" and "Universal Harmony," are the only organic selections in the nutritionally fortified smoothie category. Space ACE contains a blend of orange, peach, banana and mango and provides 110% of the recommended daily intake (RDI) of vitamin A, 100% of vitamin C and 120% of vitamin E. Lemon Mint Echinacea is a blend that delivers echinacea as well as 100% of the RDI of vitamin C and Universal Harmony is a mixture of concord grape juice, cranberry juice and raspberries with an infusion of St. John's Wort.

The Gatorade Company, Chicago, IL, recently introduced its "Torq" sports drink, a non-herbal compilation of carbohydrates that provides immediate and sustained energy as well as a unique blend of B vitamins to aid in energy metabolism. The drink contains simple and complex carbohydrates, four B vitamins (B6, B12, niacin and pantothenic acid) and three antioxidants (vitamins A, C and E). Torq flavors include orange, grape and wild berry.

Hawaiian Natural Water Company, Honolulu, HI, has added a line of functional beverages to its product offerings. The "East Meet West Xen" line includes six functional drinks with herbs and fruit juices; offerings include "Power," which contains guarana, ginseng, jasmine and schizandra in a raspberry, mango and tangerine blend; "Relax," which contains St. John's Wort, kava kava, valerian root, chamomile, green tea polyphenols and mango juice; "Mental Energy," which contains ginkgo, gotukola, ginseng, white grape, cranberry and lime juices; "Immune," which contains echinacea, goldenseal, zinc, green tea polyphenols, apple, carrot, pineapple and mango purees and lemon-lime and kiwi juices; "Energy," which contains ginseng, gotukola, passion flower, agave nectar, cactus pear, black current, red raspberry, white grape and pear juice and "Sex," which contains yohimbe, dong quai, damiana, white grape, blackberry and marionberry juices.

Hansen's Natural continues to add to its "Hansen's Functionals" line of nutritionally enhanced beverages in 8.3 ounce aluminum cans. The newest addition is "slim-down," which contains "Super CitriMax" FES, pyruvate, "ChromeMate," L-carnitine and B vitamins.

The big story at SoBe, Norwalk, CT, is the "Lean" drinks, the sweetener for which was recently converted from aspartame to a blend of sucralose and Ace-K, which are both naturally derived sweeteners. New flavors include Peach Lean, Lean Orange Carrot and Lean Green Tea. Also recently debuting was the company's "Tsunami" beverage. Billed as being "a great tasting orange cream brew that's loaded with energizing herbs and other natural supplements," the beverage includes guarana, taurine and zinc and V-complex, which is a combination of vitamins A,C, E and B complex.


Hot Tea
The Republic of Tea, Novato, CA, in conjunction with Dr. Peter D'Adamo, author of Eat Right 4 Your Type, has introduced a new line of wellness teas under the "Sip Right 4 Your Type" name. The teas are individualized by the four blood types, A, B, AB and O, and linked to the four optimum diets specific to these types. Most recently, however, the company has been busy launching its line of unsweetened bottled green iced teas, which were launched nationally on July 1. The line includes five flavors, Berry Plum, Spring Cherry, Orange Spice, Kiwi Pear and decaffeinated Ginger Peach.

Triple Leaf Tea, San Francisco, CA, has five new products to promote. These include "Herbalax," which is intended to promote regularity and "Detox," which contains more than 20 Chinese purification herbs. In addition, the company is focusing on green tea with its "Decaf Green Tea," "Decaf Green Tea with Ginseng" and "Ginkgo and Decaf Green Tea with Ginseng and Chinese Herbs."

As of October 1, Yogi Tea, Eugene, OR, is rolling out a totally revamped product line, with new packaging and inserts, as well as an updated website and several cross promotional schemes. The new offerings include a complete medicinal line and an updated green tea line. The green tea line now includes classic green tea, with and without caffeine, and a classic green tea maté as well as green tea combinations including "Green Tea with Triple Echinacea and Kombucha," "Green Tea Super Anti-Oxidant with Grapeseed and Amla," "Green Tea with Panax Ginseng and Kombucha," "Green Tea with Cat's Claw and Kombucha" and "Green Tea Decaffeinated with Kombucha." (For more information on Yogi Tea, see this issue's Company Cameo , page 104 in the print version.)

Traditional Medicinals, Sebastopol, CA, recently introduced two new teas, an organic chamomile and "Breathing Thyme." In terms of the former, the tea uses an organic Egyptian chamomile and will be introduced this fall.

The Breathing Thyme tea allows the company to offer a tea that "supports clear breathing" without ephedra. The tea is based on a traditional herbal formula from Germany and contains fennel seed, plantain herb, licorice root and thyme herb. All ingredients are "pharmacopoeial-grade" herbs and pass the quality control identity and purity tests defined in the German Pharmacopoeia monographs.

Fresh/Refrigerated Juice
In the fresh juice category Odwalla-which recently purchased East Coast rival Fresh Samantha, recently introduced "Think Drink," which contains lion's mane mushroom mycelium and ginkgo biloba blended with strawberry, papaya, apple and orange; "Serious Energy," which has a green tea base, with ginger, apple, orange, lime and passion fruit along with ginseng and gotu kola and "Viva Las Veggies," which contains a tomato base, carrots, celery, beets, red and green bell peppers as well as odorless garlic.

Fresh Samantha recently unveiled its line of Summer Samanthas, which consists of "Watermelon Whirler," "Lulo Lemonade," "Energizer Ginseng" and "Fuchsia Lemonade." Watermelon Whirler contains watermelon as a source of antioxidants, vitamin C and potassium; Lulo Lemonade is made from a fruit native of Ecuador called lulo, lime and orange juice; Energizer Ginseng is a tropical fruit blend with the addition of ginseng and guarana and Fuchsia Lemonade is made with prickly pear, a fuchsia colored fruit from the opuntia cactus, and contains vitamin C as well as potassium.

Naked Juice, Glendora, CA, debuted its "PowerNoni," a 100% juice blend that delivers tropical flavor plus noni juice extract, calcium, vitamin D and glucosamine. Each pint of PowerNoni supplies 800 mg of glucosamine sulfate, 1500 mg of noni juice extract, 60% of the daily value of calcium and 100% of the daily value of vitamin D. The company has also rounded out its line of organic juice products with the addition of two new beverages, "Naked Juice Calcium.Org" and "Naked Juice Organic Peach Mango Smoothie." In terms of frozen juice, the company introduced a frozen Orange Carrot Banana juice. One 10 ounce carton supplies 480% Daily Value (DV) of vitamin A; 360% DV of vitamin C; 370% DV of vitamin E, and 90% DV of selenium.

Now two-and-a-half years old, Fantasia Fresh Juice, Chicago, IL, has grown from having distribution in four cities a year ago to having its products distributed in 10 cities today. The company recently entered into the soy market with its "Soy to the World" product, which comes in Vanilla Almond and Cafe Latté flavors. Fantasia has also created a beverage called "Millennium Mojo" which contains blueberry, banana and coconut along with ginseng and ginkgo and will be rolling out this month. In addition, the company has introduced a beverage laced with St. John's Wort called "Blues Be Gone" and another beverage called "Echination Sunrise."

The Fresh Juice Company, Winter Haven, FL, has introduced a line of premium juice blends with whole crushed fruit. The new juices include "Ginseng Berry," which contains apple and orange juice, whole crushed strawberries, guavas and mangos in addition to bee pollen, vitamin C, ginseng, royal jelly and propolis powders; "Plentiful C," which contains orange and pineapple juice, whole crushed bananas, rose hips, vitamin C and E, beta carotene and selenium; "Fruit Salad," which contains apple and orange juice, whole crushed mangos and bananas, spirulina and vitamin C; Peach Mango, which contains apple juice, whole crushed mangos and peaches and vitamin C; "Protein Rapture," which contains whole crushed strawberries and bananas, apple, orange and lemon juices as well as isolated soy protein powder, creatine, glucosamine and vitamin C and Strawberry Banana, which contains whole crushed strawberries and bananas, orange and apples juices and vitamin C.

Zeigler's, Montgomeryville, PA, recently finished a test market of its "Zigs" smoothies with a wider market launch planned this fall. The Zigs line includes Strawberry Banana, Tropical Blend, Berry Blend and Orange Carrot. All of the beverages contain 100% of vitamins A and C, plus calcium.

Fresh juice is on the "juice guys'" minds at Nantucket Nectars, Cambridge, MA. Most recently the company introduced Freshly Blended Nantucket Nectars, which are not from concentrate and contain 100% fresh juice packaged in plastic bottles-a first for the company. The juices are pasteurized and are all-natural; flavors include Squeezed Orange, Strawberry Orange Banana, Mango Banana Carrot, "Super C," which contains 500% of the RDA for vitamin C, Carrot Mango Orange, Ruby Raspberry and "Raspberry Berry Good." The juices have a 60 day shelf life.

While not fitting specifically in the fresh juice category, Tropicana, Bradenton, FL, and Minute Maid, Houston TX, which offer refrigerated and shelf stable varieties, are also introducing new products.

Most recently Tropicana reformulated its vitamin fortified Pure Premium juice. Now it has double vitamin C and 100% of the recommended daily allowance (RDA) for vitamin E. Additionally, new calcium-fortified juices were rolled out earlier this year. The company in January introduced pure premium "Orange Blends with Calcium." The line includes Orange Tangerine, Orange Pineapple, Orange Ruby Red and Orange Strawberry juices fortified with 35% of the daily value of calcium. The Orange Tangerine product replaces Tropicana's Tangerine Orange Juice, while Orange Pineapple replaces what used to be Tropical Orange. Orange/Strawberry is a new flavor for the company. All of the products will be available only as calcium-fortified products.

Minute Maid also recently launched several new products. The new products include a fortified premium orange juice that contains double vitamin C, vitamin E and zinc, as well as a low acid orange juice that was developed with a proprietary Minute Maid technology. The low acid juice is targeted mainly toward baby boomers as well as the older population.

Earlier this year Minute Maid also launched calcium fortified orange and grapefruit juice. Available in the West, Midwest and Southwest regions, Minute Maid Premium Home Squeezed Style orange juice and grapefruit juices provide 35% of the daily value of calcium.