Berner Foods, Inc.

Category Outlook 2011
09/07/11

2010 December PL Buyer Magazine

Category Outlook 2011 Specialty Beverages by Delia Flores

DRINK UP

What was once new age has become a commonplace way for retailers to realize extra revenues in their beverage offerings.

What a difference ten years makes. “I don’t think we would’ve had a single taker on iced lattes ten years ago”, Steve Fay, executive vice president of Berner Food and Beverage Inc. says of its customers.

Berner specializes in private label milk-based beverages including iced lattes, Italian roast, coffee energy, ethnic beverages and meal replacement drinks. “We’re seeing a lot of interest in the ready-to-drink chilled coffee drinks and recently a lot of activity on the coffee-based energy drinks”, Fay says of Berner’s retail customers, which include supermarkets, drugstores, mass merchandisers, club stores and convenience stores. These products, “in a word, are fun”, he says. “Most of our specialty beverage items are associated with indulgence, down time and pleasure”.

The expansion is due to retailers venturing beyond the obvious “high-velocity, often highly-commoditized products”, Fay says. “Now they’ve cashed in on the rich vein of profit found in the specialty items. New Age beverages were thought of as faddish and too un-established to consider and now many retailers routinely embrace them”. He cites Target Stores as a retailer that is “simply amazing in its ability to embrace trends with speed and hit the mark on specialty and New Age beverages.” Fay also sees an increase in health and performance-related beverages. “Outside of our sphere, we see the proliferation of high-protein drinks and active lifestyle drinks. Gatorade’s G-products, I believe, are building a category that will be rich for store branding, especially on the recovery drink side”, he says.

WHAT’S NEXT

As for consumers, it seems they crave ever more diverse specialty beverages. Berner’s private label iced lattes, which are made with fresh-brewed coffee, come in mocha, vanilla and coffee flavors and compete with Starbucks Frappuccino products. Its Italian roast and coffee energy offering captures the coffee drinker and the energy drinker in one product, and comes in cans that range from 6.5 to 16 ounces. For the more nutrition and health-minded, Berner also makes meal replacement beverages for both nutrition and weight control.

its ethnic beverages target the growing Hispanic population and use traditional recipes and turn them into convenient, canned, take-a-long beverages. Some of these are Avena con Canela (an oatmeal with cinnamon shake), which consumers can drink as a breakfast supplement, or as an accompaniment to a snack, and Mexican Horchata, a rice-based drink made with fresh milk, water and spices. “The recession put a damper on some category expansion”, Fay notes. Even so, “we feel there remains a great future for indulgent, fun drinks to enjoy while relaxing or being involved in recreation”.

Flavors are a focus for Berner. “There is a whole new body of science that we have been working with that can enhance flavor perception while giving a rich, creamy mouth feel. These products can be fat, and thus reduced-calorie while giving the same enjoyment to the consumer. The technology is all natural and also lifts flavor notes”, he says. he cites a major club store private brand that uses this technology in its ready-to-drink coffee with “stunning results”.

Berner is in the midst of creating methods of identifying flavor perceptions that will help “identify a certain attribute and then be able to work with our customers to subdue or amplify that attribute”, Fay says. “For example, the term ‘toasty’ is a term frequently used with many of our products. It is the note that is similar to toasted almonds. Customers often can perceive it but do not know what to call it nor do they know the range of possible variations it can create. When complete, we believe our system will shorten the go-to-market time significantly by zeroing in on the desired outcome, rather than going through 50 iterations of samples before we hit the mark”, he says.

IT’S GOOD TO BE GREEN

But according to Fay, packaging “will be the single element of delivering products to the marketplace that will see the most change in the not-so-distant future. Sustainability is a buzz word, but in the future, it will, of necessity, be a regulatory, mandated issue”. He says that personally, “I can plainly see that we cannot have an expanding population filling landfills with packaging that will be there for the next 1,000 years. We need to recycle with a vengeance. High-heat treatment items such as the ones we produce, if packaged in plastic, have recycle codes of seven or eight – in other words, they will be here to greet the next millennia”.

As a result, Berner’s beverage division sees “the re-closeable aluminum cans and glass prevailing for high-heat treatment products, like those it produces”. “Believe it or not and simple as it sounds, the screw-top beer can is an innovation that will likely rock the beverage world over the next few years”, he predicts.

Category Outlook 201109/07/11

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Category Outlook 2011
09/07/11