Steaz working on new product platforms for 2019 launch, enjoying double-digit growth
Speaking to FoodNavigator-USA after entering into a new brokerage agreement with Presence Marketing / Dynamic Presence to represent its beverages across North America, Barron said mainstream shoppers are now embracing concepts that have always been part of Steaz’s brand philosophy.
“Cleaner labels, fewer ingredients that are as close to the source as possible, and lower sugar, are becoming more and more important to consumers,” said Barron, as is a more realistic approach to serving sizes that recognizes that most consumers don’t drink half a can, and save the rest until later.
“So if it’s a 16 oz can, that’s labeled as one serving [this will soon be required on the new-look Nutrition Facts panel, but it’s something Steaz has been doing for a while, she explained].
“Consumers are also looking for Non-GMO although many don’t realize that certified organic means it’s automatically Non-GMO, so we’ve talked about whether to go through the Non GMO Project verification process internally as some consumers are looking for that butterfly logo, but we’ve not yet embarked on the process.”
There is always more innovation than shelf space
While some legacy brands still have more shelf-facings than is warranted thanks to their deep pockets and distribution clout, said Barron, retailers are allocating more space to brands that are resonating with the next generation of consumers, although “there is always more innovation than shelf space” – at least in bricks and mortar stores, she said.
“Retailers are carving out better for you doors in convenience stores that you wouldn’t have seen even three or four years ago, but it’s hard for them to give up space to smaller better for you brands that are still getting a foothold, and the space has to work for them.”
Some energy consumers are switching from Red Bull to Steaz in their 40s
Pennsylvania-based Steaz, which was acquired by El Paso-based Novamex in 2016 and has seen a “significant headcount increase in our internal sales and marketing team this year,” currently has three product platforms: Clean energy (12oz), iced green tea (16oz), and prickly pear water (12oz, formerly branded as ‘cactus water’).
It is also working on new products, revealed Barron, although she would not provide details.
Asked if these were flavor/line extensions within the company's three existing product categories, or something more substantial, she said:
"We're working on a couple of new platforms. They are still in the R&D phase and we're working through the operational and the other aspects, but they are likely to launch in 2019."
As for the current portfolio, she said: “Iced tea continues to be our largest platform by volume share, and we’re in Kroger and Safeway and all the larger grocery chains as well as the Whole Foods of the world now, but it still has white space to grow. We’ve expanded into [the] club [channel] with Costco and the mass channel with Target, but we still have growth potential in c-stores, foodservice and ecommerce.
“Our energy platform also has so much potential. A lot of people that were drinking Red Bull and Monster in their 20s and 30s still want an energy product when they hit their 40s, but they want one with plant-based sources of energy that’s healthier without all the chemicals [Steaz’s energy line contains caffeine from yerba mate, guarana and green and is sweetened with cane sugar and stevia] and people are making the switch.”
Consumers are starting to see prickly pear in more products
The prickly pear platform – launched in early 2016 as cactus water but recently rebranded as the more consumer-friendly ‘prickly pear water’ - is underdeveloped, but has strong potential, especially as consumers become more familiar with the pink-hued, berry-like-tasting fruit in other products and categories, she said.
“People are starting to see prickly pear in beauty products, they’re drinking prickly pear margaritas in restaurants, and Starbucks had a [limited edition berry] prickly pear Frappuccino [which launched last June], so it is becoming more mainstream.
“We’re also seeing a real uptick in sales of our energy and prickly pear lines in the ecommerce channel, which makes sense, as they are two platforms that have more limited distribution [in bricks and mortar stores] and consumers are sampling it at events and then buying it online. The other great thing is that you don’t have to wait a year [for the category review] to get on shelf online.”
Live Nation partnership
Starting this year, a three-year marketing tie-up with Live Nation, which produces thousands of live music events – will see Steaz partner with Live Nation at venues in five markets: New York City, Philadelphia, Chicago, Los Angeles, and Dallas.
“It’s not just experiential, it’s also a case of selling our products at the venues, so it’s a marketing and sales partnership,” explained marketing manager Ashley Martino. “We’re onsite sampling at probably 150 concerts this summer and if people like it they can go buy it ten feet away at the nearest vending location.”
Asked about the target consumer and which events Steaz was selecting and why, Martino added: “We have a generation [of Steaz fans] that’s starting to get older and focus more on their health but also passing that knowledge and label reading onto their kids. So we’ve been doing concerts such as Kendrick Lamar and Khalid, but also John Fogerty and the Dave Matthews band, so we’ve got people that are college age right up to their late 50s, early 60s.
“We do skew a little more female than male, but Steaz appeals to a very wide audience. We’re not trying to get people to eat kale, we’re talking about a great tasting peach tea that’s better for you.”
