No Blender Required
Retailers eagerly add frozen, prepackaged cocktail pouches despite challenges.
Developing a whole new subcategory can be a sticky wicket for beverage category managers.
On one hand, many questions arise: Where should the new products be merchandised? Is there sufficient marketing to warrant giving the products space? And bottom line: Are consumers interested?
On the other hand, there can be great reward; witness the success of energy drinks, energy shots and protein shakes.
It seems the lure of that possible reward is winning over retailers with regard to a new subcategory hitting shelves over the past year: frozen cocktail pouches.
One of the most-talked-about introductions at CSP’s 2012 Cold Vault Summit in the spring, this ready-to-drink offering comes in a variety of flavors and is available from a few beverage brands, though more are sure to follow. If sales persist, the innovative item might do for individual cocktails what Keurig did for single cups of coffee.
Just how did these instant beverage alternatives come about? At least one manufacturer credits increased consumer interest in unique flavors, spirits and premium malt products.
“Recently, it has been documented that beer consumption is down, and wine and spirits are gaining significant share again,” says Chris Short, vice president of communications for Phusion Projects in Chicago, maker of Four Loko and the Island Squeeze brand of frozen cocktails.
He says the new category benefits from two trends that favor the spirits industry: Consumer tastes have changed dramatically, and flavor innovation has become the key to growing an industry. “No segment of the beer industry embraces these two trends better than the progressive adult beverage (PAB) category,” he says.
The PAB segment, says Short, “motivates consumers to purchase on the malt side of the ledger by offering products with flavors that are uniquely qualified to match spirits, ultimately showcasing the uniqueness of the items and supporting growth within the beer industry.”
Unlike many beer-category products, however, these pouches are aimed squarely at female consumers.
“Our target consumer is the millennial female, and that is where we are seeing the biggest growth,” says Sal LaMartina, co-founder and CEO of New Orleans-based Big Easy Blends LLC.
Women are the primary consumers of frozen cocktail pouches for The Pantry, too, says senior category manager Bob Gulley. The Cary, N.C.-based company operates more than 1,650 c-store locations in 13 states, most of which go by its primary brand name, Kangaroo Express. Stores under The Pantry’s umbrella carry three brands of drink pouches: Daily’s, Parrot Bay and Smirnoff Ice. Its best-selling flavors are Strawberry Daiquiri, Piña Colada and Mango Daiquiri.
“Typically,” says Gulley, “we are retailing the product for $1.99, but that depends by area, based on the cost we are given.”
Of course, a new subcategory means being creative with merchandising. How does a retailer let consumers know that these “beverages” can be found in the freezer case? For many, it’s meant having secondary, warm placement of the products near the checkout.
“We merchandise these on a warm rack or in a freezer,” says Gulley. Either way, he says, the product sells well.
Freeze and Squeeze
Well-known entries in this growing category include those from the afore mentioned Parrot Bay and Smirnoff labels. Both Diageo-owned brands have launched their own lines of frozen malt-beverage pouches that the company says are “ready to serve, right from your freezer” without the use of a blender. The naturally flavored premium products come in the following profiles:
- Parrot Bay: Frozen Strawberry Daiquiri, Frozen Mango Daiquiri and Frozen Piña Colada.
- Smirnoff: Frozen Strawberry Lemonade, Frozen Blue Raspberry Lemonade and Frozen Cherry Limeade.
To enjoy, users simply freeze the package overnight, squeeze it into a cup or glass and then serve. All pouches are 5% alcohol by volume (ABV) and available in single 10-ounce pouches at a suggested retail price of $1.99.
“Frozen cocktails are a fun component to summer celebrations, but the preparation and time needed to create these drinks sometimes takes away from the celebration itself,” says Patrick Hughes, marketing director of progressive adult beverages for Diageo-Guinness USA. “Parrot Bay and Smirnoff Frozen Pouches were created so that legal-drinking-age adults can responsibly enjoy and entertain friends without the hassle of prep work and cleanup.”
Another brand that’s bringing frozen cocktail pouches to the masses is Daily’s Cocktails from American Beverage Corp., Verona, Pa., whose Original Frozen Pouches come in six flavors: Margarita (also available in a Light version that contains one-third fewer calories), Pomegranate Acai Margarita, Strawberry Daiquiri, Peach Daiquiri, Piña Colada and Lemonade. The 10-ounce packages are 5% ABV and have a suggested retail price of $1.99.
Yet another innovator in this area is Big Easy Blends, which was founded in 2009 by friends-turned-entrepreneurs Craig Cordes and brothers Antonio and Sal LaMartina. The business owners’ Cordina brand of frozen cocktails initially was inspired by the convenience of children’s juice pouches, but the actual product does not resemble those in size or scope. (See related sidebar, above.)
Its first foray into the category was a lime Mar-GO-rita, a huge success for the small company, which also won design awards for its functional resealable packaging. New flavors, Strawberry Daiq-GO-ri and Piña-GO-lada, soon followed. This year, Cordina unveiled both Watermelon Mar-GO-rita and Choc-GO-late, the latter of which is based on a popular cocktail, the mudslide. Each 12.7-ounce pouch retails for $1.99.
“Unlike many of the other pouches on the market, you can drink our product from the pouch,” LaMartina says. “It has a screw top and comes with the straw. The other major pouches on the market are nothing more than a sandwich bag with liquid. You still need to find a glass to consume it.”
In short, LaMartina says, “Pouches are the wave of the future and will continue to grow,” largely because they are produced using fewer materials, take up less space in shipping and offer consumers more ways to enjoy the end product.
Meanwhile, Phusion Projects began offering its Island Squeeze product line in select markets starting in March and has since been rolling it out nationally on a month-by-month basis, says Short. The rollout will continue until its offerings are available nationwide in late August.
“Island Squeeze is a unique malt-based, progressive adult beverage that is available in four popular flavors: Pink Lemonade Light, Piña Colada, Margarita and Strawberry Daiquiri,” says Short. He also points out that the Pink Lemonade Light variety contains nearly one-third fewer calories than regular pouches “but retains the same great taste as other flavors. Additional light varieties have been developed and will be announced relatively soon.”
Innovation as Necessity
“The new products reinforce Phusion Projects’ position as an innovative company that develops products to address changing consumer needs,” Short says. As such, the pouches, which can be frozen and squeezed into a glass or served over ice, are 6% ABV, and come in 10-ounce, single-serve pouches, each of which retails for $1.99.
It’s not just what’s inside the pouch that matters, Short will tell you; it’s the user-friendliness of the pouch itself. “The innovative packaging that we are utilizing is essential to the growth of the beer industry,” he says. “We’ve seen this recently with punch-top lids and screw-top beer bottles, and these types of pouches are just another step in that direction.”
Neither of the big-boy beer brewers— AB InBev and MillerCoors—have yet ventured into frozen cocktail pouches, and thus both declined comment for this story.
Although the Island Squeeze product line was introduced only a few months ago, “sales are on fire and selling better than expected,” Short says. “This particular segment appears to be impulse-driven and provides completely incremental sales for retailers.” The company also recently launched a Facebook page and the site www.myislandsqueeze.com.
Although grocery seems to be the best-selling channel for Island Squeeze at this time, “wherever we have displays, the product sells well,” he says. “Given the fact that impulse sales are key for this product, a large flavor assortment is a big factor in the success of the segment.”
One could speculate that frozen cocktail pouches would be more popular in the summer, but the product isn’t as seasonal as you might think. “During the warm summer months,” says Short, “people drink it frozen, but when the weather turns cooler, people simply serve it over ice.”
In other words, cocktail pouches have potential for year-round staying power. Blenders beware.
No Kids Allowed
Although frozen cocktail pouches obviously are meant for adult consumption, the products have been called into question by some for their resemblance to children’s pouch drinks (think Capri Sun).
However, “I’ve not seen that as an issue,” says Bob Gulley, senior category manager for The Pantry Inc. For one thing, the beverages come in packages that are much larger than traditional juice boxes, he says, and they’re also clearly labeled to indicate that they contain alcohol.
Chris Short, vice president of communications for Phusion Projects in Chicago, agrees, saying, “All of our packaging prominently states in bold, capital letters: ‘Contains Alcohol’ and ‘No Sales Under 21.’ ” This is significant for Phusion Projects, which has come under fire in the past for very sweet, colorfully packaged Four Loko malt beverages.
“The product is sold by beer distributors and sold in beer sections by retailers,” Short says. “Phusion Projects markets all of our products only to adults over the legal drinking age. That is why we go above and beyond state and federal legal requirements to inform consumers and retailers that our products are alcoholic beverages, and to educate them about how to enjoy them safely and responsibly.”
Sal LaMartina, co-founder and CEO of Big Easy Blends LLC, concurs. “Our pouch looks nothing like a juice bag for children,” he says. “It is a different shape, different size and has a screw top. The only similarity is that it is in a flexible package.”