ALO Drink expands into c-stores after dominating the natural channel

The new line of pulp-free drinks, which will hit store shelves in the first quarter of 2015, offer the same nutritional benefits as the ALO Original line, which the company website claims is “a health powerhouse chock full of vitamins, minerals and essential amino acids”​ that provides “building blocks for a healthy lifestyle.”​

Indeed, the pulp-free line is made with the same ingredients as the Original line including real aloe vera extracted from hand-filleted plant leaves – not a powder – and various fruits, vegetables and honey. But the pulp-free line is pureed for a smoother finish that appeals more to mainstream shoppers who are looking for healthier alternatives to soda, said Henry Chen, president of ALO Drink.

While conventional shoppers were drawn to the unique flavors of ALO Original, such as watermelon-peach and pomelo-pink grapefruit-lemon, “some buyers in this channel were hesitant to take the drink because of the texture or pulp,”​ Chen said. The texture is less of an issue in the natural sector where shoppers look for less processed products with ingredients that are closer to their natural state.

“So, we decided to address that issue and fill a hole in the market by creating the pulp-free line,”​ which also should have a better chance of success in the c-store channel, Chen said.

Chen wants to expand into the c-store channel in part because ALO has fully saturated the natural channel with 90% of stores carrying its products, leaving little room for growth. However, he added, “we see significant areas of growth in the c-store channel because category managers in convenience stores are looking for healthier lines,”​ such as functional juices, which are growing overall 30% year over year.

C-stores also are appealing because they account for 34.3% of all retail outlets in the U.S. and provide access to a different type of consumer than who shops the natural channel, according to the firm.

Overcoming c-store challenges​

Chen acknowledged breaking into the c-store channel will not be as easy as the natural sector where consumers spend more time reading packages to learn about products and are more willing to try new foods and beverages.

In convenience stores, “you don’t have a lot of time to educate the consumer like in the natural channel,”​ said Chen. “The consumers are in the store for 20 seconds … so you need your brand and name out there so they have seen it before”​ they come in the store and therefore are familiar enough with it to try it.

ALO is raising brand awareness among c-store shoppers by sponsoring a National Hot Rod Association drag racing team. It also tied the brand to the drag racing pioneer Jim Dunn by sponsoring the filming of a documentary, Funny Car Summer, about the long-term competitor’s career, Chen said.

“We definitely have to promote consistently in convenience stores,”​ to continually move volume, he added, noting ALO Drink offers quarterly price promotions, uses shelf-talkers when allowed and other in-store promotions.

“You get one time to present [in c-stores] and if your numbers don’t work and you don’t have velocity, you don’t get another shot,”​ he said.

Another challenge with c-stores is that many chains only work with specific distributors, with which landing a contract can be difficult, Chen added.

Looking ahead to food service​

Even though ALO Drink has its work cut out in the c-store channel, Chen already is thinking ahead to his next target: the food service industry.

Like c-stores, food service is a fast moving channel with little opportunity at the point-of-sale to educate grab-and-go consumers. But, Chen notes the ALO drinks have succeeded in corporate cafeterias at which it is offered already – including being the No. 2 or No. 3 top-selling beverage behind bottled water at the Google campus.

“High-tech companies love our drinks and we are … well received by the high-tech crowd,”​ Chen said.

He expects this success will bloom more once the company “puts a concerted effort into that channel,”​ which it has not done so far.

As ALO Drink continues to expand in in new channels, it has not forgotten its roots. It also will expand its offerings in the natural channel – and elsewhere – with a new multi-serving 975 mL package of its most popular flavors, Exposed and Allure. It also added ALO Crisp – a Fuji apple and pear flavor, to its aloe pulp-free and juice lines, Chen said.

Chen attributes the award-winning beverage line’s success and ability to add new products in part to consumers’ increased awareness of ingredients thanks in to the Internet – a tool ALO will exploit more in the future.

He explained consumers are now able to look up ingredients online and learn about their benefits and risks. As they do so, they are turning more to clean labeled products, such as ALO.

ALO Drink will use this trend to its advantage by supporting the new product launches with social media campaigns that communicate directly with consumers. 

Find out what other trends are influencing consumers' beverage purchases at the Beverage Innovation Summit on Feb. 4. Register for free HERE​.