Growing Grab-and-Go

A look at the beverage and packaging trends driving sales

Published in CSP Daily News

VERNON HILLS, Ill. -- With single-serve beverage coolers taking up sizeable real estate “front-of-store” at grocers, convenience stores, drug stores, mass merchandisers and more, Packaging World magazine turned to a packaging expert to address new ways to market single-serve beverages.

Suley Muratoglu is vice president marketing & product management of Tetra Pak Inc. U.S & Canada. She runs the company’s presence in core categories, including dairy, beverage and food.

She noted that “companies attuned to the convenience trend reaped high rewards last year. Grab-and-go packaged beverages yielded growth of 6% in traditional stores and 11% in the convenience channel in 2012--both significantly outpacing the beverage category as a whole, which grew at 2.6%, according to estimates by IRI, the [Chicago] research and consulting firm covering the retail and healthcare industries.”

Muratoglu offered these tips to tap into this trend:

Combine Hydration and Nutrition

It’s not just the usual soda suspects jockeying for position in the coolers. The most impressive growth is in on-trend nutritional beverages that include coconut water and ready-to-drink tea, juices and energy drinks. Convenience isn’t enough; consumers are also clamoring for beverages with benefits--be it health or lifestyle-enhancing properties--to play to their on-the-go lifestyles.

For example, the single-largest category, energy drinks and shots, has grown into a nearly $7-billion business by some estimates, a full third of the beverage market as a whole by IRI figures. Coconut water, which is naturally electrolyte-rich, is making significant inroads as a sports recovery drink.

Focus on Natural and Organic Properties

Consumers are scanning labels for more than just nutrition information, and properties such as “natural” and “organic” reign supreme. Beyond organic, back-to-nature ingredients adding label allure include cane and beet sugars, naturally derived colors (such as beta carotene), and natural rather than synthetic preservatives.

Organic foods and beverages are still niche players--less than 5% of the overall market--but they grew at an estimated 9.5% in 2011 vs. 4.7% growth in conventional products, according to the Organic Trade Association’s most recent annual survey. And this category is poised to continue its strong growth of recent years.

Right Size--and Upsize

Single-serve packaging experienced tremendous growth in the convenience channel. According to IRI figures, the numbers were up 12.3% in ready-to-drink coffees, 10.1% in ready-to-drink teas, 7.1% in sports drinks and 4.6% in waters. But the meaning of single-serve has broadened to include a wider range of these smaller sizes, and companies are beginning to offer the half-liter as grab-and-go packaging and experimenting with even larger 1-liter size drinks aimed at day-long consumption.

Beyond size, these packages should be easy to hold, with caps that are easy to drink from and resealable.

Go Green

Even as customers demand the convenience of a single-serve drink, they are mindful of the environmental impacts of its packaging. In fact, consumers have indicated in some studies that they are willing to pay marginally more for products in sustainable packaging that can be recycled. This last finding has one key consequence for beverage makers and marketers.

To take advantage of where the growth is now, and will be for the foreseeable future, any newly developed products--along with existing ones--should be offered in single-serve yet sustainable packaging.

“Retailers will continue to open up space for on-the-go alternatives, and for a good reason, Muratoglu summarized. “Consumers are asking for products that respond to their immediate needs and are ready for consumption. As the beverage category grows ever more crowded, smart companies will heed the consumer’s call for more health-conscious drinks, sustainably and astutely packaged to match the busy and mobile lifestyles that now predominate.”