Running out of juice? Category hits hard times in North America

07-Apr-2013 - Last updated on 08-Apr-2013 at 14:07 GMT

Single-juice flavors can be more costly than blends, but orange juice alone still accounts for around 50% of North American sales volumes (Canadean). Picture Copyright, Daniel Wehner/Flickr

North America is the world’s largest juice market, but firms active there are losing share within soft drinks due to high price perceptions and mixed health and wellness messages.

Ray Rowlands, from beverage market research experts Canadean, notes that some consumers seem unable to make a distinction between pure juice and drinks with less juice content (nectars and still drinks) a factor which that compounds the category’s problems.

“From a retailer point of view,juice based drinks also provide greater opportunities for long-term profitability,” Rowlands writes in a Canadean release.

The analyst notes 2013 juice sales volumes in North America of close to 8bn liters, which means the region is still responsible for one third of global volumes, but this compares unfavourably to 10bn liters sold 10 years ago.

‘Deterred by product’s acidity’

The reasons for this sales slump are several, as Rowland explains. On the one hand, juice fits the bill in terms of health and nutritional needs: “But at the same time consumers are worried about its calorie and sugar content, and are often deterred by the product’s acidity”.

“The category also faces the issue of fluctuating concentrate supplies and rising prices, thereby increasing the attractiveness of nectars and other cheaper drinks,” he adds.

Although chilled juice accounts for over 50% of volumes sold in North America, Rowlands explains that the segment’s contribution has been shrinking slowly over time.

“Chilled products are often perceived as providing better quality, but also come with a higher price tag. This had impacted unfavourably in these tough economic times, and allowed cheaper ambient juices to steal some share,” he adds.

And despite the “inconvenience factor”, as he describes it, of frozen juice, Rowlands said this segment had shown signs of increased popularity with budget-conscious households.

Private-label smartens up act

Cost remains a major market driver, Rowlands explains, with some consumers were switching from more expensive single-juice flavors to lower-cost juice blends.

Nonetheless, he adds that orange (around 50% of category volumes) followed by apple (15-20%), remained the most popular region-wide juice choices.

Private label products had benefited during the recession, Rowlands says. “Private label juices are no longer blandly packed, limited range offerings of perceived inferior quality.

“Leading retailers now provide diverse flavors of ‘freshly squeezed’, ‘high fiber’ and even organic products presented in a plethora of eye-catching cartons and bottles.

However, Rowlands says that new evidence suggests consumers appear to be turning away from private label juices in favour of cheaper nectars and still drinks, with some unable to make the distinction between pure juice and products with a lower juice content.