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Part II:
Syrups Continue to Pour Out New Flavors and Uses

By Suzanne J. Brown

In a January teleconference on new food trends for 2002, Nancy Byal, recently retired food editor of Better Homes & Gardens was presenting the results of that magazine’s annual consumer survey. There were no questions on flavored syrups, but she was talking about new flavor blends in foods. I asked Byal if she thought flavored syrups have made an impact or influenced food trends in any way. She replied, “Yes.” The flavored syrups in coffees and teas have provided new flavor trends in waters, juice drinks, and sodas - both carbonated and non-carbonated - which appeal to the younger crowd. Plus, they offer a non-alcoholic alternative beverage that offers new tastes and a variety of choices. Flavored syrups, more than ever, are influencing chefs in creating new recipes for all times of the day.

Byal continued to say that the top three trends that came out of the recent research are more emphasis on home and family values (including more cooking and entertaining at home); the importance of convenience (ideal recipes contain four ingredients and take about 30 minutes to prepare); and, the desire for joy, comfort and pleasure, which food is presumably an integral part.

For at-home entertaining, the flavored syrup web sites and cook books offer exciting, very easy recipes to experiment with for guests. Every at-home cook wants a “new,” easy method of creating new taste sensations, not just for drinks, but salads, meat marinades, vegetable dishes, seafood and desserts that call for only four-five ingredients. Flavored syrups create the taste distinction and wake up tired old recipes with new flavors and elegant tastes.

Thanks to the success of espresso based specialty beverages, where new recipes offer endless marketing opportunities either as a new menu item or price leader, dairy and non-dairy based drinks have brought a new industry into this category. Look in the cold dairy case, where chocolate milk used to be the sweet choice among regular milk and buttermilk. Now you have all sorts of flavored milks and creamers. In Israel, flavored milk is very popular, especially with children. Blueberry, strawberry, banana and vanilla milks are packaged in small, clever containers that appeal to children. Shelf stable boxed and bottled dairy products come in many sweet flavors, extending and really defining a brand’s personality.

For more private label opportunities, yogurt and ice-cream manufacturers turn to flavor manufacturers to create entire lines of beverage categories that are marketed as smoothies or healthy juice drinks fortified with vitamins and minerals. Some of these drinks have been an outgrowth of Ready-to-Drink (RTD) beverages popularized by Starbucks, SoBe, Snapple and Arizona. And RTD’s would not have continued to grow and develop had it not been for more flavor opportunities. Flavored sweet beverages have become so popular that you can order them from just about any outlet that sells coffees, teas, yogurt and ice cream. Look at what flavorings have done for the yogurt chains. Freshens has created entire divisions based on flavoring mixes. DaVinci has been distributed with Millstone Coffee for several years as a brand, which has helped both brands distinguish their lines.

Mass merchandisers like Target, Marshalls and T.J. Maxx carry some brands in their gourmet food sections, which has always been a questionable marketing strategy. Would private label work better in these outlets? In stores where “bargains” are the draw, branded bottles are not neatly arranged; they’re not in any order, and sizes are always mixed up, giving customers the perception that the product is outdated.

In this second part of our annual two-part report on syrups, we will address flavored syrup manufacturers’ response to private label and explore at-home usage as well as other marketing opportunities.

Private Label
In the December 7, 2001 issue of Beverage Digest, John Sicher, editor/publisher, reported that beverages comprise three of the top 10 private label categories in supermarkets and two of the top 10 in mass merchandisers.

If we’re finding more private label beverages in at least two categories, more channels must be on the horizon. Another indicator of the growing strength found in private label products comes from the Private Label Manufacturers Association (PLMA). An online article published by PLMA reports that store brands now account for one of every five items sold every day in U.S. supermarkets, drug chains and mass merchandisers. They represent a nearly $50 billion segment of the retailing business that is achieving new levels of growth every year. For retailers, store brands help build customer loyalty. Whether a store brand carries its own retail name or is part of a wholesaler’s private label program, store brands give retailers a way to differentiate themselves from the competition.

Some flavored syrup manufacturers pursue private label customers more than others. Whether to offer this service is entirely a decision based on company philosophy. Stearns & Lehman, Inc. specializes in private label syrups. Laura Martin of Stearns & Lehman says that private label brands have come a long way to beat the stereotype that the product is generic or second-rate either in quality or value. “Instead,” she said, “private labeling enables companies to build and diversify the offerings under their own brand name. As a manufacturer of specialty beverage flavorings, granita concentrates and powders, Stearns & Lehman has worked to reinforce the idea that products under a private label is crucial to build and support the identity of a brand.”

Oscar’s, one of the companies in the portfolio of brands owned by Stearns & Lehman, is growing the private label niche as well. When asked what the advantages/disadvantages of using a private label over a brand name, Colleen Ransom of Oscar’s response was, “Ego Marketing.”

A similar perspective on private label is held by Stirling. Earl Greiner, ceo, Stirling, reported his company is very selective about which accounts it accepts as private label customers. For example Stirling’s policy is to deal with private brand firms who clearly understand that the most important factor in producing and selling a proprietary brand is backing that brand with quality. Several years ago, Stirling acquired an upscale private label customer who dropped its lower quality formula, which did not sell well, to pay significantly more for a Stirling quality formula. The customer continues to be loyal and its syrup sales have continued to grow every year for more than five years. Greiner says, “Quality sells!”

Routin, Monin and Torani focus on building their brand names. All three attribute their growth and success because of their brands. Teisseire and DaVinci focus on building their brand names, but will also customize a private label product if the customer requests it. With branded products, there is much support including collateral products and merchandising that accompany the sale. However, the converse is also true. A syrup manufacturer may have a stronger brand name than its customer. In that case, to build the customer’s brand name, it may be best to use private label.

At-Home Market
Another holiday season has just passed and I didn’t see one bottle of syrup or a beverage made from syrups at any home party I attended. I took two bottles of syrups to a family gathering, but the beverages were already planned and displayed on the beverage table. All the non-alcoholic beverages I saw at parties this year were large liters of the same old brands of soda along with interesting choices of wine. There is so much potential in trying to reach this market. Torani and DaVinci have made progress in marketing to the end user, but more attention needs to be paid. For instance, culinary schools, both local and national are venues for teaching courses about syrups; tastings at retail stores are another and special packaging that features a variety of flavors in a four pack. The tiny bottles really don’t provide much syrup to work with and the 750 ml are too big, the 187 ml is a good size, but even better would be around 200-250ml for at home usage.

Gift ideas are always appreciated. A seasonal booklet with gift ideas for special events and holidays gives consumers something different to give, and something they can create themselves. One of the most interesting booklets this past holiday season was published by Gevalia and featured coffee and all related foods and accessories for entertaining and gift-giving. Recipes were included and the booklet sold at major bookstore chains across the country.

Syrup manufacturers continue to find marketing opportunities, especially in established channels. When consumers start creating more demand, then we will have a solid category.

Suzanne J. Brown is marketing correspondent for Tea & Coffee Trade Journal. She is senior marketing consultant for Hope-Beckham, Inc., an integrated marketing/public relations firm based in Atlanta, Georgia. She can be reached at (404) 636-8200, ext. 232 or sbrown@hopebeckham.com

Tea & Coffee - February/March 2002

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