Soft drink maker AG Barr is to expand into the burgeoning market for functional beverages and waters with the acquisition of the Vitsmart and Vitaminsmart labels from brand management company charteredbrands. Vitsmart was reformulated and repositioned and gained UK listings with Tesco and Sainsbury’s.
The acquisition of the brands, which include both a vitamin enriched water and a range of fruit based drinks, will allow the group to further diversify into the market for nutritious and healthier beverage alternatives.
Such a move by the UK based soft drink maker, which produces the Irn Bru and Strathmore mineral water brands, highlights the growing potential of the functional beverages market to manufacturers amidst a backlash against the traditional carbonated beverage.
Group Chief Executive Roger White said that adding Vitsmart and Vitaminsmart to its product portfolio would give the group an instant footing in the UK functional market. “The brands will allow us a credible early entry into this rapidly growing sector with great brands and products which have existing retail distribution and consumers. We plan to accelerate the development of our activity in this sector and believe this acquisition gives us a strong foundation,” he said.
Charteredbrands saw the future trend toward functional waters in 2006. Vitsmart was formulated and positioned in 2007 and gained national listings with Tesco and Sainsbury’s. The drink contained 50% of the recommended daily allowance (RDA) of vitamins in its 50cl bottle.
Charteredbrands CEO Gervase Cottam commented: “We are delighted with the successful sale of Vitsmart. Since Coca-Cola bought the vitamin water producer glacéau for $4.2 billion we could see that the market will accelerate rapidly in 2008.”
In a second deal, completed at the end of 2007, charteredbrands also sold its share in Isklar, the Norwegian glacial mineral water, to its two business partners in this brand, Jova Holdings, the Norwegian shipping and logistics company and the food and retail Omani company Sabco.
“The product was originally developed as a medicinal product before we took control. We changed consumer positioning, reformulated the product (removed sucralose) refined packaging and addressed all aspects of marketing – effectively turning the brand around ready for sale a year later.”
*Consumer insight *
“Functional water is still a relatively new category. It’s still poorly defined but the market has moved forward within the past year with consumers gaining more understanding about functional foods as a whole.
“We did our own research to find out where the optimum positioning would be in terms of functional drinks. We identified progress could be made by developing a water drink with added vitamins rather a vitamin drink that happens to be a water. We positioned Vitsmart positioned as a simple entry level choice in the spectrum of functional drinks.”
Taste test *
“A good taste is very important. There are lots of functional waters which arrive in the market with a poor taste and consumers won’t go back. So taste and refreshment are key.”
Our research found consumers wanted a clear benefit from a single functional ingredient with clear communication on what that dosage is – you could have 100% Recommended Daily Allowance (RDA) of vitamins but consumers told us they were concerned about overdosing if they drank more than one of our products.
Back to basics approach*
“The original drink we inherited had botanical ingredients and different flavours, aimed at different mood states and consumption occasions which offered far too many choices for consumers.
“They want to choose by flavour but get the same benefits. So we simplified the proposition down to three great tasting flavours and one big benefit which is 50% RDA of vitamins.
“Lots of competitors at the far end of functional drinks are moving into the market trying to tap into one part of your day – as a pick me up or revitalisation and confusing this proposition with flavour and complicated ingredients.”
© FoodBev Media Ltd 2022
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