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“Lots of manufacturers are getting on the bandwagon of ‘healthier-for-you’ angles,” said John West, category manager for Odessa, Texas-based Southwest Convenience Stores, operators of more than 160 7-Eleven stores in New Mexico and Texas. However, West noted that he hasn’t been presented with enough products to make a decision to stock them in his coolers.
Similar sentiments were expressed by Bob Ferraro, the co-beverage sales manager for Sheetz Inc. “I haven’t seen anything that makes me want to take a chance,” and stock the product in stores, he said.
To that end, Altoona, Pa.-based Sheetz has developed Tongue Twisters, a private-label brand of healthy kids’ beverages. Sales of the beverage have been better than Bug Juice, a sugary kid-targeted beverage, since it rolled out in mid-December, he said.
Gary Hemphill, director of marketing for the Beverage Marketing Corp., believes that this fledgling category is an offshoot of a general trend towards healthy products. “An increasing number of products being introduced to the market have health and wellness attributes and this includes beverages that are targeted to kids,” said Hemphill.
Chris Testa, founder and chief executive of Wild Waters, expanded on the idea. “Kids want the varieties adults have had the benefit of for years,” said Testa. “I think that the same way flavored waters have become habit-forming for adults, flavored waters will become habit-forming for kids.”
The ‘healthy-for-you idea’ comes after 15 years of stagnancy in the category, according to Testa. He gives two main reasons for the evolution of this category: First, “Kids are way more sophisticated today. They have access to information, the Internet and advertising. Parents allow their kids to choose two things — first, their toys, second, their beverage; it’s a kid-driven category.”
Secondly, “Kids [today] are much more health-aware than kids even five years ago. They are reading the labels on products, a little more so on the West Coast than the East Coast. They are talking about sugar and calories, although not to the degree of understanding of adults, but they read it, and understand,” Testa said. The increase in obesity and diabetes in children has led to more educational programs for children about their diet, he added.
While no statistics are readily available for these types of beverages, Hemphill classifies it as a growth segment most likely underdeveloped.
Testa can confirm its “underdeveloped” status. When debuting Wild Waters at the NACS Show 2005, “I had to convince people they needed a healthy beverage for kids,” he noted. “When I said ‘kids’ water’ they looked at me like I had three heads,” he said. “People didn’t understand we were a ‘better-for-you’ product. The mentality was what you know about kids’ beverages — cheap sweet treats.”
But cheap, sweet drinks are just what children want, according to West of Southwest Convenience Stores. “When kids come in, the last thing they think about is getting something good for them. They go in, hit the candy and Slurpee machine, tug on their parents and maybe hit the novelty section,” he explained.
West has tried to implement some healthy kids’ beverages in stores, but tests have shown little success. The first problem with the beverages is the size — most of the ones he has seen are a full adult serving size that is being marketed at kids. “Most mothers I know are looking for something smaller.” West said. “Manufacturers have gotten a great idea, but they’re not talking to the pull end.”
Ferarro of Sheetz noted that because the kids’ market is small, price plays a large factor in its chances in coolers. “As [the category] becomes more dense, the cost will come down and more people will place it. Stores can’t retail 8 ounces for $1.29. You can’t make margins on that.”
Sheetz, operator of 330 stores, currently stocks three end-zone facings with kid’s beverages such as Bug Juice and Kool Aid Bursts, but does not carry a healthy beverage option for children. “The reason is the kids don’t make that purchase intent,” said Ferraro. “I think it’s the mother going in and saying ‘here.’ I don’t see the kids going in and saying they want [healthy beverages].”
For Sheetz, store location also plays a role in the beverages it offers. “I think people in our demographic talk healthy but don’t think healthy,” said Ferraro.
While most c-stores do not have the ability to test a private-label line of beverages like Sheetz, some are taking a chance with what’s available and seeing great results. Moulton’s Market, located in Amherst, N.H., brought Wild Waters into the store a month ago, and is seeing strong sales. It’s sold by the bottle in the coolers at the general store style c-store.
“I think that’s going to be a growing segment in our store. All the water-based vitamin drinks seem to be the best out of all that we are stocking,” said the store’s proprietor, Steve Yurish.
The store sells several cases a week, but Yurish believes this will greatly increase as the category grows. New healthy beverages have a broader appeal than some of the older categories, such as Gatorade, he said. Because of this, healthy kid’s beverages are moving faster than Gatorade in his store.
Yurish decided to stock the beverages after noticing the growth in other healthy beverages such as Vitaminwater. Wild Waters is the only healthy beverage the store stocks that is geared towards kids, and Moulton’s will continue to ride the wave in healthy children’s beverages while it is here, he said. He also plans to introduce more offerings to the cooler as they become available.
However, Yurish’s store proves other category managers’ beliefs concerning the category. He agrees that parents are buying beverages for the kids. “I’m not sure that the kids are reaching for [Wild Waters] themselves.” He added that children have “more of an inclination to go with sugary drinks.”
As for the future, Testa sees Wild Waters and its counterparts making a large impact on the coolers. “I see it growing,” he said. “Stores will accommodate a kid’s zone. But to date, we’re lucky to see two offerings to kids.” He added: “Maybe there will be half a door dedicated to kids in the future. It just makes sense to offer the kids beverages because they are sophisticated enough now to choose.”
Healthy children’s beverages are “the future and to some extent it has already arrived. Marketers are beginning to develop products targeted to specific age demographics. We’re likely to see more of this in the future,” Hemphill concluded.
For West and his stores, the jury is still out. “First, I’d have to be convinced there is demand for [healthy beverages]. I’m more convinced the demand is in the Wal-Marts rather than c-stores.”