Private Label Magazine - November/December 2011

Six Pack Apps

By John J. Pierce

Private label drinkables range from coffee, tea and fruit juices to energy drinks, beer and wine. But there are new trends even in milk – and milk alternatives.

What do Great Value chocolate milk, Barrel Trolley Beer and Fuel energy shots have in common? They all come in six packs, and they’re all private brands – for Walmart, Bentonville, AR; Harris Teeter, Matthews, NC; and CVS, Woonsocket, RI, respectively.

The private label beverage market is a vast one, embracing milk, coffee, tea, juices and juice drinks, soft drinks, bottled water, sports and energy drinks, energy shots, even wine and beer. But retailers don’t all go with the flow, as witness Walmart’s convenience packaging of low-fat chocolate milk in shrink-wrapped six packs like those more common for nutritional drinks.

In alcoholic beverages, Harris Teeter has come out of the closet, so to speak, by listing Barrel Trolley Beer and its four wine brands – Oak Creek, Earthwise, Ocean Song and Marques de ValCarlos – on the Our Brands menu at its website. Walmart doesn’t quite do that with its new Lucky Duck wines, although it does offer to ship them, with the proviso: “At delivery, you must show a valid photo ID and provide a signature confirming that you are age 21 or over.”

But there is plenty of innovation even in more traditional beverage categories. Kroger, Cincinnati, OH, for example, has expanded its Big K soda line with Apple, Pineapple Passionfruit, Watermelon Kiwi, Blackberry Citrus and Mandarin. Italian sodas seem to be all over the place now, and they often come from abroad – but not necessarily Italy. World Classics Trading Company Blood Orange from Topco Associates, Skokie, IL, for example, is bottled in France.

In the bottled juice category, Walmart has gone beyond even the blends of açai and other fruits with Strawberry Banana vegetable and fruit juice blend. Performance of bottled juices generally has been mixed, reports Symphony IRI Group, Chicago, IL. Apple juice is on top, followed by cranberry juice cocktail blends – but the latter are slipping. Lemonade and orange juice are still doing well, while new contenders include cherry, pineapple and sparkling juices.

In milk, the biggest category of all, there are new alternatives like lactose-free milk – you can find that at Walmart under the Great Value brand and also at Aldi, Batavia, IL, under the Friendship Farms brand. It could be a hot item: low-fat and skim milk sales in private label far exceed those for whole milk, according to IRI – $4.765 billion versus $1.75 billion – and for the 52 weeks ended 9/4/201l, the former were up 7.3% compared to 5.1% for the latter. But there’s also a growing market for milk that doesn’t come from cows.

It started with soy milk, which was first seen at specialty chains like Whole Foods Market, Austin, TX, but has since become a fixture at mainstream chains under organic private brands like Nature’s Place at Delhaize America, Salisbury, NC. Whole Foods offers rice and almond milks in three varieties – original, unsweetened and vanilla – under its 365 Everyday Value brand, and boasts that its almonds are all produced in the USA. Trader Joe’s, Monrovia, CA, has come out with coconut milk, which is billed as gluten-free, but isn’t for weight watchers, due to its fat content.
Red Thunder. The brand has a certain ring to it, given that the most popular energy drink in North America is Red Bull.

But it’s a private brand at Aldi, and it’s being used not only for energy drinks but energy shots. Like the most popular national brand, 5 Hour Energy, Red Thunder energy shots come in two-ounce containers, and are merchandised at check-out lines.

Energy drinks under the same brand come in four-packs of 8.5 oz cans, and retail at $2.99 in regular and sugar-free versions. But Aldi offers another brand, Gridlock, sold in 16 oz cans at 89 cents, with regular and low-calorie versions. There’s even Hydro +, a line enhanced water beverages in 20 oz bottles at 69 cents in açai blueberry pomegranate, dragonfruit, fruit punch, or zero calorie lemonade. Box store competitor Save-a-Lot, Earth City, MO, has been out about a year with Max E Rush, its own energy drink.

Energy shots are really hot in store brands, with sales up 77.5% to $11.1 million, according to IRI. Over the same period, sales of private label canned energy drinks have flagged, off 20% to $4.8 million, perhaps because the category is overcrowded with so many brands. But private label energy shot sales may actually be understated, because they don’t always come with the retailer’s name in the distribution clause.

CVS’ Fuel brand is officially sourced from Advanced Healthcare (also used for some HBC items like men’s shower gels) – but in the trademark filings, as opposed to fine print on the packaging, Advanced Healthcare gives the same address as CVS. The chain prices two-packs of Fuel at $5.49, the same as 5 Hour Energy – only the private brand is billed as good for seven hours. Six-packs are $15.29 for Fuel and $16.29 for the national brand.

On the West Coast, meanwhile, Unified Grocers, Commerce, CA, offers Tasmanian Force, billed as a “fierce energy drink.” Sports drinks generally have faded in private label, but Wegmans, Rochester, NY, is pushing the category with its MVP line in orange, grape, lemon lime and blue freeze versions. HEB, San Antonio, TX, is trying to touch several bases with a new line called HEB Quench, which covers sports, vitamin-enhanced and energy drinks. “Whether you’re on the field or off, our HEB Quench FIT will replenish you with flavorful hydration for thirst-quenching satisfaction!” the chain boasts at its website.

During the days of prohibition when revelers crowded into hidden saloons, getting a beer was a clandestine process – the result of sharing a discreet password or speaking softly to avoid detection. Bootleggers flourished as they stealthily transported the prized cargo to thirsty revelers! Using a seamless network of tracks, the covert trolley system of the 1920s was a bootleggers dream. This transport system was the ticket to an American revolution and the revolt against Prohibition.

That’s how Harris Teeter explains the naming of its Barrel Trolley beer, which comes in Belgian style, wheat ale and pale ale. It may be small beer compared to Port Republic at Kroger and Buck Range at Supervalu, Eden Prairie, MI, because Kroger and Supervalu have a lot more outlets. But the people who buy those brands may not even know that they’re private brands. They aren’t even mentioned at their websites. But Harris Teeter stands by its beer. Likewise, it stands by its four wine brands, one of which is a “green” wine.

Harris Teeter is proud to introduce Earth Wise, a family of premium wines carefully crafted from special vineyards, where earth friendly sustainable farming practices have been in place for many years. These wines are made exclusively for Harris Teeter. Earth Wise is an “Earth Friendly” brand featuring sustainably farmed grapes coupled with all recyclable packaging.

“Harris Teeter strives to minimize its impact on the environment and promote sustainability,” adds Ed Cook, director of Beer and Wine at the chain. Earth Wise wines include Cabernet Sauvignon, Merlot, Chardonnay, Moscato and Pinot Grigio. Unlike a number of other private label wines, such as Charles “Two Buck Chuck” Shaw at Trader Joe’s (On a more serious note, Trader Joe’s has also come out with an organic wine range, Green Barn.). Earth Wise wines don’t come cheap – they were retailing at at $5.99 in Virginia recently. What’s more, their vintages are listed, as with “California 2006” for the Merlot. It’s the same with Harris Teeter’s import brand:

From the Martinez family, proprietors of Bodegas Faustino, Spain’s largest producer of Reserva and Gran Reserva Rioja wines, comes Marqués de ValCarlos – a new line of wines from the most modern winemaking facility in Spain’s up-and-coming Navarra region. Bodegas Faustino has long been a proud custodian of the Rioja’s international reputation for world-class wines. Today, Don Julio Martinez has made it his personal quest to bring his family’s expertise and standards of quality to this promising region just northeast of Rioja.

There’s a Chardonnay in this $8.99 line, too, but the other varieties may be unfamiliar to many shoppers. “Crianza is an elegant, full-bodied red with intense aromas of ripe red fruit and nuances of vanilla ending with a voluptuous finish,” Harris Teeter details at its site. “Tempranillo [Vintage 2008] exudes notes of red fruits and toasty hints from the oak. The licorice and ripe fruit flavors lead into a smooth finish. Rose Tempranillo is a youthful, well balanced, brilliant rosé with pronounced aromas of red berries, strawberries and raspberries.”

Walmart created a splash this year with Lucky Duck, which offers imported wines: “We search he globe to create a collection of authentic, great tasting international wines, with layers of flavor,” it says on each bottle. The brand retails at $2.99 a bottle – perhaps it could be called Three Buck Duck. Walmart takes a humorous approach to its designs, in any case. For Cabernet Sauvignon from Chile, the duck wears a ski cap. For Malbec from Argentina, it’s a gaucho hat. And for Shiraz from southeast Australia, the duck is hanging upside down.

Fresh & Easy, El Segundo, CA, debuted its own wines this year – Luca and Luigi and Winter’s Tale, the latter a mulled wine. It also offers its own beer – Hopper Whitman, billed as a “Belgian-style wheat ale with flavors of orange peel, coriander and subtle spices. With clean, crisp, full-bodied flavor this unfiltered ale finishes exceptionally smooth. Best served in a tall frosty glass, garnished with an orange slice.” A Winter Brew was launched just last month.Like Barrel Trolley, the Fresh & Easy beers comes in six-packs; they are priced at $5.99.

But Buck Range at Supervalu is 12 cans to a pack; and Kroger’s Port Republic, introduced last May, comes in 30-can cases. Could be just the thing for tailgate parties, if hauling the case doesn’t put a crick in the host’s back. Supervalu is looking for men who want ti man up for for Buck Range beer: “Whether it’s hunting, fishing or kicking back to watch the game, this premium American lager tastes great, yet won’t break the bank.”

There may be a Tea Party in politics, but in beverage sales it’s more like a coffee party. Tea bag and loose tea sales are down 1.4% in private label to $57.5 million, according to IRI, even though overall sales are up. Private label canned and bottled tea sales have slid seven percent to $32.4 million, again in face of higher overall sales. Store brand ground coffee sales, by contrast, have soared 18.7% to $282.8 million and ground decaf sales 10% to $45.6 million, Even whole bean sales are up 6.1% to $39.7 million.

Three trends stand out in coffee: origin, style and flavor. Examples include Brazilian Bahia Region under the Simply Enjoy brand from Ahold USA, Quincy, MA; Seattle Style dark roast under the Meijer Organics brand from Meijer, Grand Rapids, MI; and Vermont Maple Nut from Wegmans. “Seattle Style” is obviously supposed to invite comparisons with Seattle’s Best, while Donut Shop Blend under the Central Market Classics brand at Price Chopper, Schenectady, NY, is presumably an allusion to Dunkin’ Donuts. Fair Trade coffee is still a selling point for Walmart, under the Sam’s Choice brand, which is no longer used for other consumables.

Wegmans does a big business in coffee to go – small, medium and large cups are its most popular items, according to its website. In canned coffee, the top two are its Medium and French roast 100% Arabica coffees. But in bagged coffees, it has been pushing other origin coffees like Sumatra Madheling and flavored items like Orange Cappuccino and Crème Brulée.

Retailers seem to be pursuing niche markets in tea. Passion Fruit & Papaya black tea in 20-bag packs is new at Kroger under the Private Selection brand. Other examples of 20-bag specialty teas include Meijer Organics English Breakfast and Culinary Circle Pomegranate green tea from Supervalu. Nature’s Basket organic Calming Tea at Giant Eagle, Pittsburgh, PA, is only 18 bags. Wegmans offers sachets of Chinese teas like peony (Bu Mau Dan).

In bottled teas, examples include Market District organic Green Tea with Clementine, also from Giant Eagle; and Green Way organic White Tea with Raspberry at A&P, Montvale, NJ. Big Y, Springfield, MA, offers a low calories peach iced tea mix, a variation on traditional tea mixes – which are down 10.6% in private label to $57.5 million.

For those who want to avoid caffeine, incidentally, CVS, Woonsocket, RI, has introduced Big Chill purified water in single-serve bottles. Bottled water, too, is hot in private label, with sales up 5.4% to $874.9 million in still water, and 2.2% to $106.1 million in sparkling water. Jug/bulk water is the slowest moving segment, with store brand sales up 0.4% to $293.3 million, according to IRI.