Suja sales up 80% YoY says CEO, as brand gears up for drinking vinegar launch

Suja Juice is tapping into the trend for all things fermented with the launch of organic probiotic-infused drinking vinegars targeting Millennials, says the San Diego-based firm, which has seen retail sales surge 80% year-on-year in the latest 52 weeks in measured channels.

The bold-tasting ready-to-drink vinegars - which will debut at Whole Foods in September (MSRP $2.99) – combine water, apple cider vinegar, cold pressed fruit/veg, stevia, and a range of on-trend ingredients from balsamic vinegar to coconut nectar, CEO and co-founder Jeff Church told FoodNavigator-USA.

Far lower in calories than cold-pressed juice (each 13.5oz bottle has 3-6g sugar and 20-30 calories), they follow the successful launch of Suja’s 'pressed' probiotic waters at Target, and join a growing number of new products utilizing the ultra-resilient ‘BC30’ vegan probiotic from Ganeden, which is claimed to support digestive and immune health.

Apple cider vinegar on its own can taste pretty harsh

Suja had tested 19 different new beverage concepts with Millennial consumers - including drinkable soups - before settling on drinking vinegars, which “came out on top," he revealed.

Apple cider vinegar on its own can taste pretty harsh, but [chief innovation officer] Brian Riblett – who is a Culinary Institute of America trained chef - has matched it with some cold-pressed juices and other ingredients to get just the right balance between it being punishing and having it not tasting of vinegar at all.”

Instead of adding maple syrup – which is typically added to apple cider vinegar by companies making switchel - Suja wanted to keep the calories down, so uses stevia instead.

So the super-tart flavor of neat apple cider vinegar is balanced out, he said, but it still has some edge to it, he said: “Our core consumers are Millennials and they are very adventurous.”

Retailers, in turn, are doing some spring-cleaning when it comes to the juice set, and making space for more functional beverages like this, he said: “A lot of the smaller guys are being taken out because retailers recognize that they don’t need eight different ultra-premium cold pressed juice brands on shelf, so they are aligning themselves with one or two.”

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 “Our sales in all measured channels over the past 52 weeks are up 80% compared with the previous year.”

 Jeff Church, co-founder and CEO, Suja Juice

Suja has added 3,000 points of distribution since Coca-Cola deal

Suja’s four pressed probiotic waters – which also feature Ganeden’s BC30 strain – debuted in Target in February and are already among its top six-performing skus there [out of 15], said Church, who is now securing shelf space for them in other retailers as the six-month exclusivity period with Target ends.

“Our growth in all measured channels over the past 52 weeks is 80%, so we’re growing very strongly.”

While Suja is demonstrating good velocity in existing accounts, some of the growth has also come from picking up around 3,000 new distribution points after joining Odwalla’s chilled direct store delivery system (following a deal which saw Coca-Cola become a minority shareholder in Suja last year), said Church.

“It’s everything from college campuses to hospitals and corporate cafeterias, and this is just the beginning. We’re also launching at Costco in Canada next month with new multipacks.”

The company’s new manufacturing plant in Oceanside, CA, is also coming on stream in August, he said. “We have some great technology that can keep our cost structure really low because if we want to democratize organics, we’ve got to be as efficient as possible to make our products available to people at an affordable price point.”

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Flavors include: Strawberry Balsamic, Peach Ginger, Cucumber Ginger, Lemon Cayenne, and Hibiscus Ancho Chile (Jeremy Dahl)

Multi-tiered pricing architecture 

Much has been made about the hefty $8.99 price tag originally attached to Suja products, which are made by cold-pressing fresh organic fruits and vegetables, bottling the juice, and then pasteurizing it via HPP, which involves putting the bottles into a high-pressure chamber that is flooded with cold water and pressurized (thus the ‘cold-pressured’ moniker).

However, the introduction of a multi-tiered pricing architecture has changed perceptions that cold pressured juice is just for wealthy hipsters, with Suja Classic 16oz bottles now retailing at $7.99; the core Suja 12oz line (formerly dubbed 'Suja Essentials'), launched in 2014 at $3.99; the pressed waters, launched at Target in February 2016 at $2.99; and the new drinking vinegars, launching at Whole Foods in September at $2.99.

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Drinking vinegars tap into demand for bolder, more adventurous, tart flavor profiles, which are driving the growth of brands such as Cide Road (switchel) and Pok Pok Som (drinking vinegars as concentrates and in ready-to-drink formats, as pictured above).

While some people are willing to pay the best part of $10 for a bottle of top-quality juice, the bulk of Suja’s sales now come from the lower-priced products, Church acknowledged at a conference last year: “We're not going to win the day with an $8 bottle of juice.”

Suja has also created exclusive products for certain retailers, and worked hard to build partnerships with key customers to move “beyond a buyer/seller relationship,” said Church, who noted that when Suja started, two competitors were utilizing HPP, whereas today it is de-rigeur in the cold-pressed category for anyone with ambitions to get into leading retail chains.

However, the barriers to entry still remain very high for companies in the HPP space to evolve from being local/regional players to national brands, said Church. "It's hard for little guys to scale as there is not an established co-packing network in ultra-premium juice so you have to do it yourself, which is super expensive."

Read our 2015 interview with Jeff Church on the Coca-Cola deal HERE. 

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Coca-Cola invested $90m for a 30% stake in Suja Juice in 2015 (valuing the company at $300m), while Goldman Sachs’ merchant banking division acquired just under 20%, leaving the founders with around 25%, early investor Boulder Brands Investment Group with around 5%, and employees and other early investors with the remaining 20%.

While neither party has commented on the endgame, it is expected there will be a pathway to ownership for Coke after three years – as has been the case with other brands in which it has taken minority stakes such as Zico and Honest Tea.