BY GEOFF PARKER
CEO, AUSTRALIAN BEVERAGES
Australia’s vast fruit and vegetable juice industry continues to undergo structural changes as private-label competition and ongoing challenges from other beverages restrict industry growth into 2018-19. Premium, niche products, particularly chilled juice, and innovative packaging increasingly offer processors greater margins during a period of soft revenue performance, however.
Since 2008, chilled juice has been increasing in market value at the expense of ambient product, growing in value by more than AUD 140 million ($101 million), while ambient juice has lost approximately AUD 170 million ($122 million) over the same period. While the overall value of the juice market has been declining since 2011, forecasts indicate value losses will slow and value should peak this year due to consumers opting for more premium chilled products. Beyond 2018, the expectation is that growth will remain constrained across the category with the greatest promise of better margins and sales in premium lines.
Some of the premium lines introduced by Members of Juice Australia (formerly Fruit Juice Australia) include combinations of fruit and vegetable juices, greater density juices which have been pressed or crushed, and unique juice blends, many of which include coconut water. Some producers have also branched out into other categories, such as non-dairy yogurt and sparkling juices or flavoured waters.
A recent market research report on Australian fruit juice suggested millennials and families with young children are key targets for premium juice products. The report found millennials perceive juice consumption as an indulgence, while families with young children generally value high-quality ingredients as a key factor in the decision-making process. Of little surprise, the research also indicated that high-income Aussies are one of the main markets for premium juice, highlighting the premium quality ingredients as a factor influencing their purchasing habits.
Moreover, the research found that consumers prefer Australian-made juice due to its perceived safety, while juice with no added sugar continues to be the most important product characteristic when purchasing juice. Supporting our work to emphasise the micro-nutritional benefits of juice, I was pleased to read that one of the most common reasons for people drinking juice is because they want something healthy or nutritional.
As other studies have corroborated, it’s not just the nutritional benefits that sway consumers. Innovative packaging, particularly innovative transparent and recycled packaging, plays a decisive role in consumers picking up a particular juice product. Plastic bottles, followed by cartons, are the most popular packaging types in Australia with 1-litre and 2-litre bottles most frequently purchased.
As many in the trade know, reputation is everything. The research found brand trust is another major element impacting sales, particularly among males. Increasingly, own-brand labels feature strongly in the competitive juice industry, but premium juice brands continue to influence shopper decisions.
Underscoring the fierce competition in the Australian juice category, the majority of respondents to the research suggested they had consumed a soft drink in the last two weeks while fruit drinks, cordial and flavoured milk also appeared prominently. Of particular interest to premium lines and brands fending off competition from other beverages is that coconut water, sports drinks and iced tea are consumed by respondents who consider their diets to be either healthy or very healthy.
At Juice Australia, we are buoyed by some of the latest research which corroborates the steps our members are taking to keep ahead of the consumer curve. The majority of industry data continue to emphasise our activities on the nutritional benefits of fruit and vegetable juice and our support for the Australian juice processing industry, which is promising news in a demanding environment down under.
Geoff Parker is the chief executive officer of the Australian Beverages Council. The Australian Beverages Council introduced a dedicated juice division, Juice Australia (formerly Fruit Juice Australia), in 2009 and a dedicated water division, the Australasian Bottled Water Institute (ABWI), in 2011.
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