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When drinks go deluxe

Premium beverages are invigorating the drinks category, with pure ingredients and Mark Wahlberg leading the way

Jax coconut-Oct13

How’s this for a selling point: Not only are the coconuts used in Jax Coco coconut water grown in the exotic Philippines–they’re grown within reach of effervescent ocean spray. Electrolytes in the ocean water drench the coconuts on the vine, creating something unique. By contrast, other coconuts are irrigated with boring, mineral-lacking rainwater.

“We wanted to be the premium brand of coconut water,” says Bill Craig, Jax Coco’s executive vice-president for North America. “If you think of a Bordeaux wine or a Champagne, they’re viewed as premium brands partly because of where the grapes are grown. For us, it’s very important where the coconuts are grown.”

READ: A juicy fountain of youth

Based in Hong Kong, Jax Coco launched in Canada this past summer. And the timing could not have been better. Not only are sales of coconut water booming, but shoppers are increasingly trading up to premium beverages throughout grocery and convenience stores.

Jax’s coco-terroir claim may be a brilliant piece of marketing. On the other hand, a growing number of shoppers are buying into such backstories.

Across the vast beverage category, sales of premium drinks are up. This spans health-focused beverages, such as smoothies and no-sugar-added juice; imported bottled water; and pricey, artisan-like soda pop made with cane sugar and packaged with the at-home mixologist in mind, such as Boylan and Fever Tree.

“We’re seeing an increasing number of customer requests and purchases of all-natural drinks and those with less sugar,” says John Mastroianni, general manager of Toronto’s Pusateri’s Fine Foods.

One customer favourite is Benourished, a Toronto- based company that makes cold-pressed juice with organic, superfood and local ingredients. “They’re a big hit,” says Mastroianni.

Smoothies are also growing in popularity, and not just your typical strawberry, mango or banana varieties. Pusateri’s Avocado Smoothie, made in-store, is a top seller, especially for customers looking for both convenience and health plus taste.

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“What’s easier than sipping a delicious fruit mixture on the go?” Mastroianni points out.

Across the grocery industry, smoothies are seeing positive growth. Retail sales of smoothies are outpacing the overall juice category, reaching $107 million in 2012, an increase from $87 million in 2011, according to Euromonitor International.

And while smoothies were once the domains of small, natural-positioned brands, major juice manufacturers have developed their own varieties, such as Oasis Health Break Smoothie and Oasis Smoothie offered by Quebec’s A. Lassonde.

Even bottled water has gone upscale. L.A.-based Aquahydrate landed in Canada this past May. The bottled-water brand was created in 2004, but relaunched earlier this year after celebrities such as Mark Wahlberg and Sean “Diddy” Combs came on as investors.

According to the company, the “high-performance” water contains 72 electrolytes and trace minerals plus a high pH balance to help combat acidic waste in the body. In a sense, it’s fulfilling a new health need shoppers didn’t even know they had. Or so it seems.

“I don’t know if this is going to catch on because the claims are a little bit too much,” says Svetlana Uduslivaia, senior research analyst at Euromonitor International.

Whether or not some health claims are legitimate or a bit far-fetched, research shows a stronger demand for imported bottled water. And for consumers, the term “import” often translates into “premium” or even “good for you.”

READ: Next emerging soda segment: the mid-calorie soda

“Imported bottled water has a somewhat premium image,” Uduslivaia says. “It’s usually a bit higher priced. Some come in glass bottles, so they’re nice looking.”

Harpreet Ferron, director of grocery, dairy and frozen at Longo’s in Toronto, has noticed a trend toward better-for-you drinks. “I call them beverages with benefits,” she says.

Indeed, shoppers are gravitating toward functional beverages touting vitamins, omega fats, flaxseed and protein.

“Vegetable and fruit blends are also part of the rowing trend,” she says. Premium juice also appeals to the health-minded shopper.

Keith Wallace, president of Black River Juice Company, notices people are seeking juice made with cranberry or black currant specifically because of the naturally occurring health benefits inherent to both fruit.

“They’re told to look for [such items] by a health practitioner, and yet all they find [are products] blended with sugar,” says Wallace. In contrast, Black River has been making pure, unfiltered juice for 33 years.

Whether it’s health, natural ingredients, less sugar or the elusive promise offered by 72 electrolytes, there’s no denying premium is giving the drinks category some much-needed fizz.

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