Bill Sipper

In our previous articles (that’s a lot actually, never thought it would go so far!), I discussed a lot. I talked about many brands and many beverage types that found success across the globe.

I discussed the small beginnings of the energy drink industry, for example, and how several energy drink brands reached high levels of success. I also talked about bottled water and how carbonated drinks were invented.

That’s just a small part, and you should go back and take a good look at all those previous blogs that discussed the massive expansion of the beverage industry and the rise of popular brands we know and love today.

However, not everything is excellent in this industry. Plenty of beverages, brands, and concepts ended up being massive failures, and in today’s piece, I wanted to shine a light on these as well. So, with that in mind, let’s take a look at the most notable failures of the beverage industry.

The New Coke That Failed Tremendously

As you already know, Coca-Cola is a massive brand, not just in the beverage industry but overall. It mostly has to do with the unique formula they developed more than a hundred years ago.

That formula was a success, and it’s bizarre when you think about the time when they tried to change it. That happened back in 1985 when the great war between Coca-Cola and Pepsi was at its height.

Coca-Cola needed a change as their bitter rival Pepsi rose in popularity in the 80s, and their market share was reaching Coke’s. The change they decided to make was in the very formula itself. The company created the New Coke with an entirely new formula, which was a first in almost a century of Coca-Cola’s existence.

As soon as the drink was created and shipped to stores, the fans went crazy. Coca-Cola wanted to bring about a great, positive change, but the result was the very opposite. The backlash was tremendously bad, with only 13% of people liking the new taste. People started petitions, launched campaigns, and even called the company, all to get Coca-Cola to bring back the old flavor everyone loved.

The company went all-in with the marketing. The campaign was terrible in hindsight, or at least the Bill Cosby commercial, which certainly didn’t age well!

However, only two and a half months later, the old familiar taste was back, and the fans calmed down. The failure was still big, and Pepsi benefited greatly from their chief rival’s disaster. Unfortunately for them, once the old Coke formula was back, so was the success of Coca-Cola. Fast forward to several decades in the future, and Coca-Cola is a much bigger brand compared to Pepsi, despite the failure from 1985.

The Quick Failure of Crystal Pepsi

Coca-Cola is not the only one with majors fails; Pepsi has also had their own mishaps, especially when you consider their Crystal Pepsi debacle.

The early 1990s saw the rise of the clear-soda popularity, and Pepsi wanted to get in the game. They did it by creating Crystal Pepsi – a caffeine-free drink that was supposed to get people to associate it with health and purity. The beverage was also quite similar to the regular Pepsi, as the taste was almost identical. The only significant difference was the absence of the caramel color, which should have made the drink less acidic in its taste.

The initial response was very positive, and the fans were happy with the drink. The success even prompted Coca-Cola to release its own clear-soda drink – the Tab Clear. However, Tab Clear was specifically designed to sabotage Pepsi by destroying both itself and Crystal Pepsi. The strategy was this: Tab Clear was a low-selling product designed to fail. It was marketed as a sugar-free drink and associated with Crystal Pepsi to make Pepsi’s drink appear sugar-free as well, even though it wasn’t. The strategy was largely successful, and both drinks were mostly dead within half a year.

Orbitz – One of the Biggest Failures in the Beverage Industry

In 1996, the Clearly Canadian Beverage Corporation, a popular Canadian flavored sparkling water producer, introduced its lava-lamp beverage called Orbitz. The drink had floating edible balls that were essentially suspended in the liquid, prompting the lava-lamp association. In earnest, I was involved with this one and I thought it was going to be bigger than Coke! Ooops!

Orbitz was marketed as something unique, a drink that was supposed to be a Big Bang in the industry. However, consumers were not thrilled, and the drink was discontinued in only one year’s time.

Why? Well, it seems that the taste was the biggest issue. Orbitz wasn’t tasty at all. Many people compared it to cough syrup and ‘old water from a flower vase.’ If that weren’t enough, the branding was a bit confusing to people as well. Several flavors didn’t make much sense to consumers, so very few people were actually able to imagine what the taste would be like once they tried it.

Orbitz went all-in with the novelty and uniqueness factor, but without anything else. That’s the main reason why there was an initial interest that quickly died off once enough people tasted the drink and realized it wasn’t good.

The Short Life of Sprite Remix

Sprite Remix was an initially popular variant of Sprite, released by Coca-Cola in 2002. It was a colorless, caffeine-free, Sprite-based drink that eventually came in several different flavors that were remixes of Sprite, and each of them tasted significantly different from the original.

The taste was good to many fans, and the sales went well for a while. However, only three years later, in 2005, the Coca-Cola Company decided to discontinue the drink. The main reason was poor sales.

However, the drink got a revival in 2015 in the form of its Tropical Sprite Remix flavor that was soon renamed Sprite Tropical Mix.

Pepsi Blue – Blue Isn’t Always Great

It seems that the biggest brands fail the most, which is no wonder, as they are the ones releasing the most beverages and conducting the most experiments.

One such experiment was Pepsi Blue, a soft drink that was supposed to compete with Coca-Cola’s Vanilla Coke. It was released in 2002 with a completely blue color that was its discerning characteristic. However, it was also the reason why the drink failed.

In 2004, it came to light that the drink was colored with something called Blue 1 – a food-coloring agent that’s very controversial in many countries around the world. It was banned in several countries as well because it causes allergic reactions in certain people.

Blue Pepsi was very popular because of its blue color that attracted many. But it also gained momentum because of a unique taste that was described by many as something like blueberries, raspberries, and even cotton candy.

The drink is no longer produced, but it can still be found in the Philippines.

Why Hubba Bubba Soda?

A lot of people love bubble gum, but I doubt that they like bubble gum flavor in their sodas. However, that wasn’t the thought behind the Hubba Bubba Soda that came to be in 1988. It was made by a movie producer named Steve Roeder, who made it by using bubble gum snow cone syrup.

It might have been a good idea at the time, and it was an exciting novelty to many people. But it still died relatively quickly. It was discontinued in 1990 due to poor sales, most likely because no one wants to drink bubble gum!

The Infamous Non-Alcoholic Coors Drink

The famous Molson Coors Company creates beer, as many of you probably already know. Their main differentiator is the fact that they use pure Rocky Mountain spring water to make their beers, as the company has been saying since 1873.

It seems that they wanted to use that differentiator to enter an entirely different market – the sparkling water market. Thus, the Coors Rocky Mountain Sparkling Water was introduced in 1990. It was regular sparkling water with no alcohol in it. However, as the Coors fans knew the company to be an alcohol manufacturer, they were entirely confused with this product.

The bottled water market was booming at the time, and it stands to reason why Coors wanted a piece of the pie. However, it’s entirely baffling why they mainly targeted their existing consumers who were interested in the company for its beers and nothing else. Their fans simply didn’t care for Coors sparkling water, which is the main reason why the drink failed tremendously, despite the heavy marketing. So, two years after the drink was launched, it was abandoned entirely.

McCain’s Boku – the Beverage for Children Goes to Adults

Until McCain Citrus Inc made the Boku juice in 1990, the entire U.S. juice box market was oriented towards children. However, Boku was made to target adults, and it was packaged in a way to appeal to adults without making them look childish while drinking the juice.

The marketing was well designed, and the drink became popular once the company hired the famous comedian Richard Lewis. He became their spokesperson and appeared in several commercials that were often more popular than the drink itself!

The beverage was popular nevertheless, but once the initial craze settled down, it went into obscurity. That happened some five years after it was introduced, and the company attempted to bring it back to popularity by targeting children with their new ads. Unfortunately, the strategy was unsuccessful, and the drink only remained in stores due to nostalgia. However, that wasn’t enough, and Boku was discontinued in 2003.

And this ad starring Richard Lewis is always fun to watch https://www.youtube.com/watch?v=1JEbnWl8iz0

An Energy Drink Soda Hybrid

Coca-Cola Company envisioned and made Vault as a hybrid of energy drinks and regular sodas in 2005. They also made it to compete with Pepsi’s massively popular Mountain Dew.

It was an interesting drink that was marketed well with the slogan ‘Drinks like a soda, kicks like an energy drink!’

Vault became popular-enough among fans, and Pepsi made a response with their Mountain Dew Code Red. Coca-Cola responded by making the Vault Red Blitz. The drink continued selling well and lasted for a total of six years until it was discontinued.

The interesting part is that Vault didn’t fail because of low sales or lack of popularity among consumers. It was discontinued primarily because of Monster Energy. Coca-Cola bought the majority share in the company and decided it wasn’t smart to compete against itself with Vault, which was also an energy drink. So, they soon discontinued the entire brand.

In all honesty, it was probably the right decision, as Monster Energy is one of the biggest energy drink brands today. However, the Vault brand, on its own, is still a failure.

The Complete Failure of Jolt Cola

Jolt Cola is most likely the biggest failure on this list, and yet, it’s the only one that still exists. However, there is a good reason for this strange statement.

The drink was introduced in 1985 during the most heated period of the Coca-Cola vs. Pepsi war. Jolt Cola was an outsider, but they did well at first. Their main appeal was the fact that they were a ‘maximum caffeine’ alternative to all other similar beverages. The primary target market was students and young professionals, as the drink was supposed to give them energy the same way energy drinks did.

This went on for quite a while, as many of you already know. However, the drink failed only when the entire company went under. The Jolt Cola company filed for Chapter 11 bankruptcy in 2011, but they came back into the world in 2017 when the entire company was restructured.

Key Takeaways

As you can see, just as much as the world of beverages is filled with some major successes many adore, it’s also filled with some major disasters. Many of them are forgotten, but it’s worth remembering them if you want to stay in the game.

That’s why it’s vital for you to follow posts like these and always be aware of what works and doesn’t work in the beverage industry.

In my previous take on the history of the beverage industry, I focused on sports drinks and how they came to be. I discussed their origin, their rise to popularity, and the most popular brands. I also covered the bottled water industry that has an even longer history and more players.

Today, it’s time to move to another interesting phenomenon that struck the U.S. and the entire world. I am talking about the phenomenon of energy drinks and, most notably, Red Bull. The history of the energy drink industry is a rich and interesting one, so let’s not delay!

The Pre-Origins of Energy Drinks

Those familiar with the history of beverages know that the energy drinks we know today started in Japan in the early 1960s. However, the phenomenon of boosting your energy levels with a drink began much earlier in the U.S.

In the late 19^th century and the beginning of the 20^th century, energy drinks were basically a subset of the soft drink industry. That’s mostly because major players like Pepsi and Coca Cola had plenty of drinks that had caffeine and sugar in them. Pepsi was initially marketed as an energy booster drink, which could make it the first energy drink in a way. Coca Cola, on the other hand, wasn’t marketed that way, but it had mostly the same ingredients.

The whole energy booster phase started subsiding in 1906 when the Coca Cola Company was sued for having too much caffeine in their products. Coca Cola won the United States v. Forty Barrels and Twenty Kegs of Coca-Cola federal lawsuit, but the effects weren’t favorable for the company. The pressure was high, so Coca Cola decided to reduce the amount of caffeine in its products.

It took a while for energy-boosting drinks to become popular again in America, but Europe wasn’t lagging. In the U.K. in 1929, a new drink was made – Lucozade Energy. If you’ve read my previous article in the series, then you know that Lucozade was a big part of the sports drinks industry. If you haven’t, go back and read that piece to learn more. Lucozade Energy was introduced as a hospital drink that was supposed to replenish lost energy in patients.

In the States, energy drinks came back in 1949 when Dr. Enuf, developed by a businessman named William Mark Swartz, was first introduced. The story goes that his coworkers urged him to create a soft drink that would be better and healthier than the ones that existed at the time, which were filled to the brim with empty calories. He took this task seriously and created a drink from caffeine, cane sugar, and B vitamins. He formed a partnership with Tri-City Beverage and started bottling and selling the drink. Seventy years later, his drink is still being manufactured in the original location in Johnson City, Tennessee, and shipped across the country, albeit sparsely.

The True Beginnings of the Energy Drink Industry

As I’ve already stated, the real beginning of the energy drink we know today is traced back to early 1960s Japan.

When the Second World War ended, amphetamines became very popular, and this went on for the majority of the postwar period and beyond. The law banned them in the 1950s, but then in 1962, a company called Taisho introduced Lipovitan. The drink was essentially a legal amphetamine – an energizing tonic sold in small bottles. Lipovitan was the first, but many similar drinks came later and became hugely popular among the white-collar working-class demographic, or the salarymen as they are known in Japan.

It’s worth noting that these energy drinks resembled nothing being sold in the west. In Europe and the U.S., these were soft drinks, while the Japanese ones were more like nutritional drinks of a sort. They were intentionally made to resemble something being sold in a pharmacy, with their small brown glass medicine bottles. However, these energy drinks were very similar to the ones we know and love today. Even their marketing was similar. In the 1980s, when they were the national norm and vastly popular, one television ad featured Arnold Schwarzenegger in his prime bursting out of a bottle like a juiced-up working man ready to conquer the world.

It didn’t take long for this energy drink craze to spread from Japan to other countries. In 1963, Bacchus-F was developed in South Korea, and it was primarily modeled on Lipovitan and made with the same target audience in mind.

The United States Felt the Craze Later on

The 1980s and 1990s were big for the energy drinks industry, not only in Japan, as the phenomena started catching on in Europe and the U.S.

In 1985, Jolt Cola was introduced to the U.S. Developed by the Jolt Company, the drink was marketed as an excellent drink for reducing sleepiness. It had a large amount of caffeine in it, and the first slogan of the drink was: “All the sugar and twice the caffeine.” The drink was marketed to students and young professionals, the same target audience of energy drinks today. Jolt Cola is still being sold today in several countries besides the U.S., and they claim to be America’s first carbonated energy drink.

Ten years later, Pepsi developed and launched Josta, which was the first energy drink made by a major U.S. drink company. However, the drink didn’t last long, and its production was canceled in 1999. However, that wasn’t the end for Pepsi, as they came back to the energy drink market in 2001 with their Amp Energy drink. Today, Amp Energy is the fourth largest energy drink brand in the U.S. when you look at the overall sales.

Most people don’t remember, but before Darius Bikoff, the founder of Vitamin Water and SmartWater, was successful, he launched an energy drink based on Japanese anime characters called GoGo.

The True Beginnings of Energy Drinks Worldwide – Red Bull

The energy drink phenomena struck Japan first, and then the nearby East Asian countries. However, Europe entered the game soon after. Energy drinks started in Europe with the launch of Power Horse by the Lisa company.

However, it wasn’t long until an Austrian entrepreneur called Dietrich Mateschitz co-created Red Bull – the worldwide bestseller and the dominant force of the energy drinks market. What’s interesting here is that Mateschitz based Red Bull on a Thai energy drink called Krating Daeng, which was based on the Japanese Lipovitan – the original energy drink.

Mateschitz wasn’t ready to alter his drink too much when he based it on the Thai one. He first tasted the drink when he traveled to Thailand and was looking for something to help him with his jet lag. He tried Krating Daeng, and the idea for Red Bull was born. His own drink was essentially only modified to suit Western tastes, while the basic ingredients were mostly the same. Even the logo is the same, which is why the two drinks are often thought to be the same today. In markets where both are sold, there is a lot of confusion to this very day.

Krating Daeng means red gaur in English, and gaur is the Indian bison, one of the largest bovine in the world. The logo was thus suitable for Red Bull as well, which is why Mateschitz decided not to change it.

Red Bull was introduced to Europe in 1987, and it basically cemented the now-known formula of energy drinks – caffeine, taurine, sugar, and vitamins.

Naturally, all of these similarities between Krating Daeng and Red Bull were intentional and made with the permission of the Yoovidhya family. Mateschitz even gave part of the shares of the company to Yoovidhya, but the mutual agreement was that Mateschitz would be running Red Bull. The same is true today, with the majority of the shares belonging to the Yoovidhya family, while Mateschitz runs the company.

He was looking to essentially re-brand Krating Daeng and bring it closer to the Western audience. The marketing was altered entirely. Krating Daeng was usually marketed to blue-collar workers in Thailand, and the most significant consumers were truckers. However, Red Bull was re-positioned to be an upscale drink, a trendy one made for the rich. It was thus first introduced to Austrian ski resorts. The pricing followed this upscale marketing, and Red Bull quickly became a premium drink, while Krating Daeng remained a low-cost one.

Red Bull quickly conquered Austria and was then introduced to the neighboring Hungary and Slovenia in 1992. In 1994, it expanded to the U.K. and Germany. After Europe, the next market was the American one. Red Bull entered the U.S. in 1997. The craze quickly began there, and by 2005, the energy drink market share of Red Bull was 47%. In 2008, Forbes magazine listed Mateschitz as the 250^th richest person in the world, with a net worth of $4 billion. He shared the spot with Chaleo Yoovidhya, the creator of Krating Daeng.

Today, the entire global energy drinks market size is valued at $53 billion, and it’s estimated to reach $86 billion by 2026. In large part, Red Bull is the one that brought the energy drinks industry to these heights. The unique branding of Red Bull is mainly responsible for its success. The company didn’t follow traditional marketing techniques but was aiming to generate awareness, and it managed to create a brand myth of sorts through extreme sports events and stand-out stunts.

Recent Developments in the Energy Drinks Industry

When the 2000s began, energy drinks started to change a bit. There was a growing trend for putting energy drinks in bigger cans, and most companies followed this. However, in countries like the U.S. and Canada, where a limitation is placed on the amount of caffeine in a single serving of an energy drink, producers decided to increase the amount of caffeine together with the size of the bottle. That’s why brands like Red Bull, Monster, and Hype Energy Drinks have subsequently increased their can size.

Those who wanted something smaller didn’t have to wait long, for in 2004, an offshoot of energy drinks was created – the energy shot. They are marketed to people who don’t have enough time to drink a whole can of energy drink but want to get their energy drink fix. Energy shots contain the same dose of caffeine in a smaller amount of liquid, usually 50ml. 5-Hour Energy was the first product to start the energy shot trend.

Later on, in 2007, energy drink tablets and powders were also introduced. They were made to be an even smaller version of energy shots, as they can be dissolved in water to create a standard energy drink.

Energy Drink Effects and Health Problems

Despite their marketing, most of the effects we get from energy drinks come from caffeine. There is little evidence that their other ingredients like vitamins have any significant impact on the human body. The drinks do give you more energy and improved cognitive performance, but that’s mostly due to the higher amounts of caffeine found in energy drinks.

As you’re probably already aware, energy drinks can create health problems, at least when they are consumed frequently in larger amounts. Studies have shown that excessive energy drink consumption can lead to disrupted sleep patterns, cardiac problems like arrhythmia and heart attack, and mental problems like phobias and anxiety.

The health issues don’t only come from caffeine, but from the mixture of ingredients most energy drinks have. It’s essential to limit energy drink consumption and respect the labels that exist on all energy drinks.

Key Takeaways

As you can see, the history of the energy drinks industry is a rich one. It might not be a long history, but in the 50 or so years it spans, a lot has happened in this market, resulting in many hugely popular brands.

Red Bull is the dominant force on the market, but other products have their fair share as well – brands like Monster, Rockstar, Bang, Eastroc Super Drink, NOS, Burn, and Hi-Tiger.

The industry continues to evolve, just like all other beverage industries, which is why it’s vital to follow the industry insights and learn from others to improve your own brand. Who knows, you might even create the next Red Bull in your own market.

For more information about Cascadia Managing Brands, please go to our website http://www.cascadiafoodbev.com

In the previous articles on the history of the beverage industry, we discussed the origins of carbonated soft drinks and their further development. We also covered the new age craze for fruit juices and ready to drink tea, two types of beverages that are still quite popular today.

Now, I am going to cover the formation and development of sports drinks and bottled water. Both have a significant influence on the beverage industry and are still going strong today, especially bottled water, without which some people can’t live.

The Strange Beginning of Beverages for Athletes

In part 2 of the series, we briefly touched on New Age Beverage called Snapple. However, the origin of sports drinks goes much further back in history, as far as the 19^th century. Back then, it wasn’t known what kind of beverage could help athletes perform better and replenish their energy when needed.

Some athletes were used to drinking beer (yes, beer), but with significantly lower amounts of alcohol. It was thought that low alcoholic content could replenish water, minerals, and energy in our bodies. But back then, they didn’t have the benefits of modern studies we have today. We take our sports drinks and our electrolyte water for granted today, but in the early 19^th century, they had to make do with what they could.

Lucozade – the First Sports Drink

It wasn’t until 1927 when the first real sports drink was developed and launched. It was dubbed ‘Glucozade,’ but shortly after changed to the less tongue-twisting and more catchy ‘Lucozade.’ Barely a century later, the sports drink industry is worth more than $4.6 billion. But let’s not rush into things, as we are still far from the billion-dollar industry we have today.

A British pharmacist from Newcastle, named William Walker Hunter developed Lucozade in 1927. It wasn’t considered to be a sports drink at that point, but a medical aid drink for athletes. It was a pure glucose and water mixture that was made to provide a natural source of much-needed energy for athletes. The rights to the drink were sold in 1938 to the famous Beecham Group, which was the first to truly commercialize and mass-produce it. Beecham Group was also the company that changed its name to Lucozade.

The first Lucozade only had one flavor – a distinctively sweet one with citric overtones. It was sold in a yellow cellophane wrap until the 1980s when it was rebranded once again. Their first slogan was ‘Lucozade aids recovery.’ When they rebranded in 1984, the bottle was changed to a classic plastic one, like those used for most beverages today. The more significant change was a marketing one. The company only marketed the product as a beverage for the sick, instead of a drink that can replenish energy.

The sales then tripled, and the company was sold later in 1989 and once again in 2013 to the Japanese company Suntory for £1.35 billion. Today, Lucozade is the number one sports drink in the UK.

A Stronger Player Enters the Market

Despite its relatively high success as a medical product, Lucozade missed the real success it could have had. The sports drink market was just emerging, and it was another product that took it to new heights – Gatorade. Today, most people across the globe have heard of Gatorade, but not many can say the same for Lucozade.

All in all, Gatorade started in 1965 and it essentially created and quickly dominated the new market of sports drinks. Even though Lucozade started it all, it was considered a medicinal drink all the way to the late 1980s when they first rebranded their drink as a sports beverage.

Gatorade, on the other hand, was envisioned by coach Dwayne Douglas as a sports drink that could help the University of Florida football players. He noticed that they tended to lose weight from training and playing. They were urinating less even though they drank lots of water, and they also suffered from heat strokes on occasions. To help them, coach Douglas decided to join forces with a kidney disease specialist from the University – Dr. Robert Cade.

The doctor realized that he only needed to add sugar and salt to the water to help athletes replenish the energy they lost when playing. His drink was mostly the same as Lucozade, but it contained less sugar and some salt – which Lucozade didn’t have. The drink Dr. Cade made didn’t taste good, so his wife suggested adding lemon juice to make it more appealing. That made all the difference in the world, and the now-famous drink was made. It was named Gatorade because it was essentially created for football players at the University of Florida – the Gators.

So, the drink was made and given to the Gators in 1966. They immediately started performing better, lost less weight, and had fewer problems with the heat. The drink started being distributed by the Stokely-Van Camp Co. but was subsequently acquired by Quaker Oats in 1983. Later in 2001, Quaker Oats was purchased by Pepsi, and with the purchase, they gained all the rights to Gatorade.

Other Players on the Market and What Makes All of Them Successful

Lucozade marked the beginning, Gatorade started the craze, but other sports drinks also contributed to the massive expansion of the entire market. Coca Cola has its own version called Powerade. Then there’s California-based Muscle’s Milk, Aquarius from Coca Cola, the global Herbalife, Pepsi’s All Sport, and Japanese-based Pocari Sweat to name a few. More recently the phenom Body Armor was successfully launched by beverage entrepreneurs Lance Collins and Mike Repole.  Coca Cola recently purchased a minority interest in the Company and will distribute it in the United States, somewhat sidelining their other sports drink entry, Powerade.

The success of all of these different brands lies in the mixture that was primarily created by Dr. Cade. Naturally, it was refined by many of the previously mentioned companies and brands, but the basic concept remains the same.

Almost every sports drink is a blend of electrolytes and carbohydrates. Virtually all of the carbs come from sugar, which is much needed for muscles. Electrolytes are usually a mixture of salt and potassium, and they replenish everything you lose through sweating. Outside of that, most sports drinks contain some flavors and colors to make them tasty and appealing to larger masses.

The Health Benefits and Problems

It’s vital to note that sports drinks can be useful, but not always. First of all, they contain a lot of calories; a large bottle of Gatorade has around 200 calories, which can often be a lot more than you can burn during a workout.

What’s more, many scientists state that if you’re not exercising for more than 90 minutes, then there’s no need to consume a sports drink at all, because in these cases, your body doesn’t require more sugar and electrolytes. Thus, it stands to reason that the Gators initially benefited from Gatorade because they trained and played for much more than an hour and a half.

For these reasons, sports drinks are often marketed as soft drinks. They contain less sugar than regular soda, but they still contain an amount that your body rarely needs if you’re following healthy nutrition every day. They are more beneficial for athletes who undertake rigorous and longer training sessions, not for people doing regular exercise.

The sports drink market is projected to grow at a CAGR of 4.31% to reach US $28.584 billion by 2023, from US$22.193 billion in 2017.  “Growing health awareness including the importance of hydration in the human body is one of the major drivers driving the growth of the global sports drink market. Popular brands include Gatorade, Powerade, Staminade, Jianlibao, Pocari Sweat, Maidong (Vitamin Water), All Sport and 100Plus among others” according to Research and Markets.

For more information about Cascadia Managing Brands, please go to our website

I find myself writing part two of the History of the Beverage Industry and wondering, “geez, how many parts will I have to write?”.  I blame all of this additional work on Jim Tonkin @healthybrandman who was underwhelmed by my previous beverage history contribution several months ago! J

When we left you last, we discussed the evolution and history of the non-alcoholic beverage industry, essentially, the birth of the carbonated soft drinks.  Today, we are going to discuss what came next and the eventual boom of “new age” or “good for you” beverages and the levels and platitudes these brands created.

What about Fruit Juice?

Sodas aren’t the only non-alcoholic drinks that have had a lightning-fast rise to fame, impeccable reputation for improving health, and a similar downfall. There is, of course, fruit juice, especially the ready to drink kind that has ended up being the most widely consumed. 

Much like soda, fruit juice was also a somewhat healthy-looking concept in its inception, although it has been around for much longer in a non-commercial iteration. There are different definitions of juice, depending on whether you’re looking at the American or British market terminology and regulations. However, fruit juice is essentially a drink made by extracting a fruit’s natural liquid.

As such, it was referenced as early as 100BC-70BC, according to Steven Bailey’s Juice Alive: The Ultimate Guide to Juicing Remedies. It’s safe to say that all ancient civilizations had their own preferred fruit juice combination. However, fruit juice as a commercial product came onto the market much later, around the same time that soda drinks did.

There are several definitions of “fruit juice”:

1. 100% Fruit Juice, which as its name states, must contain 100% fruit juice.  However, in the mid 1980’s and 1990’s, manufacturers blurred the lines by using very little “named fruit juice” (the name of the fruit juice they are featuring) and started adding apple juice, pear juice, and white grape juice to fill the definition of 100% juice.  We call them fillers because they are essentially used like cheap sweeteners, without adding sugar itself, and have little or no nutritional value.  You can actually taste when a juice brand is using these fillers.
2. Juice Cocktails are another advent.  Must juice cocktails contain about 10% or more fruit juice, but usually far less than 100% juice.  Many don’t exceed 155 or 20% juice. They are often sweetened with high fructose corn syrup (besides cost, does anyone know why the industry would ever use a this horrible sweetener? —but I digress), cane sugar, Stevia, Erythritol, Monk Fruit, and even artificial sweeteners. Some contain natural and/or artificial flavors or colors.
3. Juice drinks contain absolutely no fruit juice whatsoever, but are sold as Juice “drinks”, which is fairly misleading. If you drank these as a kid, guess what?  No juice whatsoever.

The main obstacle to selling freshly produced juice is, of course, its short shelf life — but that changed in 1869 when Thomas Branwell Welch pasteurized fruit juice. Welch was a physician and dentist, religiously against the manufacturing, selling, and consuming of alcoholic beverages. This moved him to come up with a way to halt fruit juice’s fermentation to alcohol, which effectively created the first ready to drink juice.

Welch named his unfermented grape juice Dr. Welch’s Grape Juice, which his son Charles later renamed to Welch’s Grape Juice. Dr. Welch then began advertising it as a remedy to all chronic diseases “except Diabetes Melitus.” The drink was hugely successful until the 1920s and the Prohibition, which saw the rise of soda. However, Welch’s Grape Juice survived those hard times, and it paved the way for other ready to drink juice brands.

The Orange Juice Craze

Another juice craze that would grip America originated from the need of the government to provide a transportable Vitamin C product to their troops during World War II. Back then, canned orange juice was the only option on the market, and scientists were tasked with coming up with something that is transported more easily. That is how frozen concentrated orange juice came to be — three years after the end of World War II. 

However, the problem with both concentrated and pasteurized orange juice is that the process of creating it removes the juice’s natural flavor. That means that some of it has to be put back into the product via the so-called flavor packs — and they are full of additives. For the longest time, these juices were marketed to consumers as a natural, healthy option, but they, in fact, are not.

Despite not being a ready to drink option, frozen, concentrated orange juice kicked off the trend. But by the 1980s and 1990s, the industry had reconstituted ready to serve orange juice and “not from concentrate” orange juice. These inventions turned it into a quintessential American breakfast drink, and fruit juice became a way of life for consumers over the next few decades.

The History of Ready to Drink Tea

On the other hand, a product that is seeing a worldwide increase in sales is ready to drink tea. This industry had humble beginnings as well, starting with the first commercialization of iced tea back in 1904 when English merchant Richard Blechnynden cooled his pre-made tea with ice in an effort to sell it in the sweltering heat of the Louisiana Purchase Exposition. The U.S. had known iced tea before, as there are some Civil War-dated references to it. However, the market didn’t really boom until the ‘90s.

Going National

In 1993, ready to drink teas went into nationwide production and distribution, offering a wider range of products than ever before. The industry that started with black tea based products expanded to different branches such as juice blends, unsweetened iced tea, and diet iced tea. The brands that carried the evolution of ready to drink tea were Arizona and Snapple, starting with bottled and canned tea.

Leading Ready to Drink Brands

Snapple and Soho Soda and a small handful of others created the New Age Beverage Category by first launching gourmet juices, then natural sodas and seltzers and then ready to drink iced teas. Lipton and Nestea were already making iced teas, but they contained artificial ingredients and were mostly in cans. Additionally, Snapple was one of the first independent beverage companies to bottle their products in a custom, proprietary bottle. The other company to do that at the time was Soho Soda, one of the first natural soda brands.

Snapple began as a joint venture of Arnold Greenberg, Leonard Marsh and Hyman Golden in 1972. Envisioned as a carbonated fruit juice, the first iteration of Snapple exploded in the bottles after fermenting, which earned it its name. A few years later, they produced a ready to drink iced tea, bottling the tea while it was hot. That way, they eliminated the need for additives, which reinforced their all-natural, homemade marketing angle.

After having grown throughout the 80’s, Snapple was sold in 1994 to the Quaker Oats Company for $1.7 billion, which also owned Gatorade, a sports drink invented in the 70’s to help the Florida Gators football team performance. Quaker Oats intended to maintain the popularity of Snapple by implementing strategies similar to what they used with Gatorade, but it didn’t work. With bigger bottles and a lack of charismatic company employees like Wendy Kaufman who carried Snapple’s marketing campaigns, the brand lost a lot of its appeal for consumers. Just 4 years later, Quaker sold Snapple to Triarc for $300 million. They previously purchased Mistic from Joe Umbach for $95 million.  Triarc slowly began restoring Snapple’s popularity.

Then Don Vultaggio and John Ferolito took the market by storm with Arizona Iced Tea by putting it in a 24-ounce tallboy can and charging 99 cents for it. Similarly to how Pepsi tried to outshine Coca-Cola by offering more of the product for the same price, Vultaggio thought that it would be the best way to take over Snapple, which was on the height of its popularity at the time.

Using beautifully decorated cans and incredibly uniquely labeled custom glass bottles, Arizona Iced Tea sped to the top of the Iced Tea category outselling all other competitors.

Today, Arizona is behind only Lipton in sales when it comes to canned and bottled teas, but still going strong.

What about Soho Soda?

Soho Soda was started by Sophia Collier and Connie Best in 1977 and built it to a $20 million + brand before selling it to the Seagrams Beverage Company in 1989 for $14 million. Seagrams destroyed the brand in record time trying to save money by decreasing the 12 ounce bottle to a 10 ounce bottle and increasing the cost to distributors and retailers while changing the ingredients to save money. What followed was a much different beverage. And with brands like Clearly Canadian, Original New York Seltzer, and Zeltzer Seltzer nipping at their heals, Seagrams quietly sold the brand for a huge loss.  They were fond

Soho Soda and Snapple were some of the first pioneers of the better for you beverage industry.

Key Takeaways

The beverage industry has come a long way since its inception in the late 1700s. From the hands of pharmacists, it slowly transferred into the hands of businessmen and advertisers, who are largely responsible for the breakneck speed of its growth. It developed at the same pace new technologies did, allowing the manufacturers and distributors to break old boundaries with each passing year. This process eventually resulted in the massive industry we know today.

However, with consumers beginning to turn more to healthier and more environmentally-friendly options, the industry as we know it today is certainly going to keep changing. For every aspiring beverage entrepreneur, it’s important to follow industry insights and draw conclusions about the potential direction of the development of the industry itself. Opportunities for innovation might be just around the corner.