Wednesday, March 01, 2000
P&G: Drink to your health
Spire, fortified juice beverage, is test marketed
BY RANDY TUCKER
The Cincinnati Enquirer
Procter & Gamble is among a number of food marketers racing to get in on one of the hottest trends in the industry, and one that adds a new twist to the old adage, “You are what you eat.”
What you drink can be just as important to your makeup, says P&G, which earlier this month began test marketing a new juice drink in Cincinnati under the brand name Spire.
Spire falls under a relatively new category of consumables — so-called “functional foods” that are fortified with vitamins, herbs and minerals and tout specific health benefits, such as fighting heart disease or bone loss.
Also referred to as “nutraceuticals,” these nutritionally super-charged foods and drinks represent one of the fastest-growing and most profitable food-industry segments. That segment of the business has worldwide sales estimated between $40 billion and $60 billion.
P&G wants a piece of the action.
“It's a healthy alternative for adults on the go, and we're just trying to meet consumers' needs by offering them this product,” said Shanae Gibbs, a P&G spokeswoman.
Spire is P&G's first offering in the functional food category, she said.
It comes in two varieties:
• Spire Snack: Has as much calcium as a glass of milk and is formulated to curb hunger between meals.
• Spire Energy: Contains the herbal supplement Guarana and green tea and delivers “a smooth, steady, sustained energy” boost, according to a P&G fact sheet.
Both drinks are now on sale in Cincinnati at Tri-Health Fitness Center in Blue Ash; Joseph-Beth Bookstore in Hyde Park; Awakenings in Hyde Park, Covington and downtown; and Cincinnati Natural Foods in Madeira and Colerain Township.
The drinks, each available in two different fruit flavors, sell for about $1.79 a bottle — nearly twice the price of most ordinary juice drinks.
That's right in line with P&G's objectives under its Organization 2005 restructuring plan, which calls for boosting sales and earnings by introducing more premium-priced products.
Experts say some functional foods and drinks can fetch as much as six times the price of their ordinary counterparts in stores.
“The (profit) margins are certainly much better than with nonfortified drinks, but you get what you pay for,” said Mark Woodburn, chief financial officer of the New York-based Natural Health Trends Corp. The company markets a full line of herbally enhanced drinks with natural health benefits.
Besides the high profit margins, food companies are also salivating over the potential growth prospects of functional foods.
While most other food categories inch along with growth rates in the low single digits, functional foods are projected to grow at an annual clip of 15 percent to 20 percent a year, Mr. Woodburn said.
Jacor's parent to purchase promoter
How it could work
Merger likely won't increase concert prices
GE to power new Boeing 777
GE chairman showing no favorites
P&G: Drink to your health
Firstar becomes official bank of Kentucky Speedway
Chamber plan helps cut natural gas bills
INDUSTRY NOTES: RETAIL
TRISTATE BUSINESS SUMMARY
Census plans to take answers online
'Cybersex compulsives' put at 200,000
AOL, Time Warner promise open access to Net via cable
TRISTATE MARKET SPOTLIGHT
