This segment enjoyed a compound annual growth rate of 5.5% between 2006-2010, according to Packaged Facts, which factors energy drinks, sports drinks and functional waters, ready-to-drink (RTD) tea and coffee, and yogurt drinks and smoothies in its definition of functional beverages. A closer look suggests category sales reached $23.4 billion in 2010, and the energy drink portion accounted for just over $7 billion in global, says Claire Moulin, a departmental research analyst with Euromonitor International.
However, the segment is not without its controversy. For the second time this year, the FDA has warned a beverage company that products labeled as supplements must be sold and marketed as supplements, not beverages. The warning letter sent to Rockstar cautioned the company that, despite being labeled as supplements, its Coffee & Energy products are represented, advertised and sold as beverages. Furthermore, because the products contain gingko, an unapproved food and beverage additive, the agency has deemed the line to be “adulterated.”
The letter to Rockstar is similar to one the FDA sent in March to Revolt Distribution, marketer of Slowtivate Relaxation Drink. Despite Slowtivate’s labeling as a dietary supplement, the FDA determined the product has the appearance and representation of a conventional beverage and was considered unsafe because of its inclusion of melatonin, which similar to gingko, is an unapproved additive, according to FDA guidelines.
The FDA also notes that “there is no food additive regulation which authorizes the use of ginkgo… [and] we are not aware of any basis to conclude that ginkgo is [Generally Recognized as Safe] for use in conventional foods.” The agency pointed to scientific reports that “have raised safety concerns about the use of ginkgo in conventional foods,” with studies showing gingko associated with carcinogenic activities in experiments on animals.
The energy drinks segment has seen a pair of recent additions, with Xyience Xenergy’s launch of Melon Mayhem and Tangerine Twister. Both are free of sugar and calories; tangerine flavor mixes with vanilla and cream flavors in Tangerine Twister, while honeydew and cantaloupe are augmented with strawberry and a touch of citrus in Melon Mayhem.
"We considered what is trending, such as retro-inspired flavors, which influenced Tangerine Twister. Then we add our own distinctive twist, but we never compromised on our promise to use only natural flavors or colors," says Susan Curry, Xyience's vice president of operations and overseer of the development of the brand's beverage flavors.
The company also has incorporated new elements to its Xenergy labels: the drink’s caffeine content and advice against mixing the beverage with alcohol, a clear nod to an awareness of its audience: "Given that our audience is concerned about how they fuel their bodies, it's important that we are transparent," says John Lennon, Xyience's president.
A similar awareness of its audience’s nutritional needs has driven Jamba Juice Co.’s development of a fruit and dairy beverage for K-12 schools. Developed with nutrition guidance from the National Dairy Council, and available in berry and peach flavors, the smoothie is naturally sweetened with fruit and fruit juice, combining fat-free milk with real fruit. It promises one serving of fruit and one-half serving of fat-free dairy per 8oz., is low in sodium and promises to be a good source of protein, potassium and phosphorous, while an excellent source of calcium and vitamin C.
Young consumers also were cited as a major reason behind a recent major acquisition in the food industry. Campbell Soup Co. is spending $1.55 billion to purchase Bolthouse Farms, manufacturer of carrot juices, fruit smoothies and protein drinks. The move will further strengthen Campbell’s beverage business, which has seen sales rise 2% (to $593 million) in the nine months to April 29, a period of time when its soup sales have faltered (dipping 3%).
For any company looking to tout its beverages’ antioxidant content, a new study out of Portugal sheds some interesting light on antioxidant activity of certain ingredients. After analyzing the phenolic content in 19 different tea-based beverages and fruit juices, Universidade do Porto analysts found a tea formulation containing green tea, hibiscus and pineapple boasted the most antioxidant punch. Published in the Food Science and Technology Journal, the study noted that while fresh berries are said to be full of health benefits, blackberry and raspberry-based juices had the lowest antioxidant content. A cocktail made of pomegranate, grape and carrot juice, hibiscus and green tea extract was shown to pack the biggest punch.
Antioxidant content appears to be an important factor to consumers, judging by a Packaged Facts 2011 online survey of consumers who had shopped for groceries within the last 24 hours. That survey found 8% of respondents indicated they had purchased grocery products with high antioxidant claims, making high antioxidants a top 10 consumer nutritional concern, one that consumers either purchase more avidly or remember more vividly than the traditional high vitamin/mineral claim, noted by 6% of grocery shoppers.
From the July 23, 2012, Prepared Foods E-dition
