Drink Tank Grab a cold one and read on to uncover the latest trends in the beverage industry.
Opinions expressed by Entrepreneur contributors are their own.
In an era when a beverage's claim to fame is twice as muchcaffeine, and milk is going carbonated, it's hard to believethe next big thing is . . . water. According to Beverage MarketingCorp. of New York City, water is the fastest-growing major U.S.beverage category, expected to surpass coffee and milk to takesecond in volume only to soft drinks by 2004.
Now you've got four companies dominating the bottled watermarket-Pepsi, Danone, Coke and Perrier Group of America-butthat's where the twist comes in. According to John Rodwan,editorial director for Beverage Marketing Corp., you'reexpecting too much if you're shooting for No. 1, butthere's a good chance your product can attain underdog statusand significant sales if you either try for regional success bytouting the water's source, or add a special something-aningredient or other element-to plain old water. Rodwan expectsenhanced water fortified with calcium, caffeine or added flavors togrow "very, very quickly" this year. But he's notsure whether, over the long term, "that's going to satisfyconsumers when they simply want water-or if it's an areathat's just a little too peculiar."
Bob Lynn, vice president of marketing and sales forLe-Nature's, a Latrobe, Pennsylvania, company founded in 1992that specializes in purified and fully pasteurized juices, waterand teas, has no doubt plain old water will maintain its strength,but questions the longevity of infused water. He gives new entrantssix, maybe nine, months. "It's H20. No matter what you doto it, it will try to revert back to being H20," Lynn says."Americans are faddy and sometimes gullible, but theyaren't stupid, so fads that grow and maintain in other[countries] tend to have a very short life span in the UnitedStates." That doesn't mean you can't garner successwith fad-beverage businesses, as long as you're able tocontinually reinvent the fad.
And the Red Bull phenomenon? We'll have to wait a coupleyears to see whether energy drinks outlive their fad status, but,according to Rodwan, it's another exciting segment and theclosest thing the beverage industry's got to a totally newcategory. Troy Widgery, 35, who founded Denver-based extreme sportsapparel manufacturer Go Fast Sports Inc. in 1995 and Go FastBeverage Co. last year, has been hard-pressed to keep up withdemand for his energy drink. Still, the beverage company, whichemploys about 40 people and expects first-year sales of $3 millionto $4 million, isn't yet profitable. But, says Widgery,"For our size and amount of [grass-roots] marketing we'vedone, I would say our margins are better thananyone's."
As for Widgery's "next big craze" prediction,he's betting on milk thistle, an active ingredient in GoFast's 11 that acts as a liver detoxifier. Will it be the nextgreen tea? Wait, is green tea out of fashion already?
| A BRIEF BEVERAGE HISTORY |
| early1800s: European and American businessmen bottlenaturally carbonated water, claiming it helps indigestion andfever. |
| 1886: Coca-Cola is created by a Georgiapharmacist. |
| 1927: Kool-Aid inventor Edwin Perkins transformsthe product from a syrup into its present concentrated powderform. |
| 1972: Specializing in carbonated apple juice, ahealth food store owner and two window washers start Snapple in NewYork City. |
| 1987: Red Bull is launched in the Austrianmarket. |
| 1995: Starbucks adds Frappuccino blendedbeverages to its menu. |
| 1995: Water Joe, caffeine-infused bottled water,is sold in convenience stores. |
| 1996: Four health and fitness buffs start Sobe,making exotic herbs like ginseng, ginkgo and green teamainstream. |
Contact Sources
- Beverage Marketing Corp. of New York
(800) 275-4630, www.beveragemarketing.com - Global Beverage Systems Inc.
(800) 542-8333, www.le-natures.com - Go Fast Beverage Co.
(800) 895-7290 www.gofastsports.com
