Old Orchard founder and president, Mark Saur, said: “You have to move fast. Trends move more fast paced than ever.”
Helping to fuel that growth are the deep pockets of a Washington-based equity firm, Allied Capital Corp. Saur sold a major stake in his company in May 2007 for Allied Capital’s $64.7m investment in the business.
Old Orchard is the second largest brand by volume for ready-to-serve, family-size juice, after Ocean Spray Cranberries. It’s also the second biggest in frozen concentrate after The Coca-Cola Company. With $153m in sales in 2007, Old Orchard produces 65 bottled and 35 frozen beverage products sold by such major retailers as Wal-Mart, Target, Kroger, Meijer and Spartan Stores.
“We want to be on the cutting edge of producing a product that consumers want, not what we want to produce,” explained Saur. “It used to be, ‘What are the calories?’. Now it’s, ‘What’s the glycemic load?'” he added, referring to the effect of carbohydrates on blood glucose levels.
That’s why the company’s new product, FruitSense, is lightly sweetened with natural agave nectar, rather than corn syrup. Agave, harvested from the same Mexican cactus that produces tequila, costs about 10 times as much as high fructose corn syrup. But the result is a drink with only 45 calories a serving and a lower glycemic load.
The FruitSense concept was inspired by a conversation between an Old Orchard sales rep and a buyer at Target Inc, who pointed out that customers were leaving the juice aisle to buy flavoured and functional waters – the industry term for water with nutritional additives.
Old Orchard set out to create a vitamin water that had fewer calories and less sugar than the single-serving vitamin waters on the market.
In April, Target became the first retailer to carry the product in its SuperTargets. Other retailers, including Spartan Stores, a wholesale distributor as well as operator of Family Fare and D&W Fresh Markets, have signed on as well.
Old Orchard vice president of marketing, Kevin Miller, said: “The response from our buyers has been overwhelmingly positive.”
Being early with a 64oz container may not be enough, said one industry watcher. “If one of the more established functional water brands tries to up packaging size into multi-serve, Old Orchard would be at a disadvantage,” said the analyst.
Consumers are moving away from carbonated drinks in favour of water or enhanced water and energy drinks. Together, they claim about $10bn – or a quarter – of today’s beverage market in the US.
“Functionality is one of the big catchwords right now. There’s this whole idea you can enhance your life through beverage.”
© FoodBev Media Ltd 2019