New Entrants in Fruit Juice Segment : Royal Crown, Sunkist Attack in the Soda War

Just as the soda war seemed to be easing, the $22-billion-a-year soft-drink industry showed Monday that it is concocting a new round of competition--this time among sodas with added fruit juice.

Royal Crown Cola of Rolling Meadows, Ill., and Atlanta-based Sunkist Soft Drinks announced plans Monday to introduce new lines of carbonated sodas containing real fruit juice, citing changing American tastes. Sunkist will call its new soda with 10% orange juice Sunkist Plus and first introduce it in a diet version; Royal Crown has not disclosed its product’s name.

The reports came during opening day of the International Soft Drink Industry Exposition in the Anaheim Convention Center, where 15,000 soft-drink officials met to review the latest soft-drink products, packaging and vending machines.

By entering a market niche now led by Pepsi Cola and being explored by Coca-Cola, the two companies also may be joining the controversy over the nutritional value of mass-market prepackaged foodstuffs--such as fast-food hamburgers and so-called natural cereals and other food products.

Sunkist also said it was introducing Sunkist Natural, a “lighter” version of its Sunkist soft drink flavored with essence of mandarin orange.

“They (soft-drink makers) are attempting to dupe consumers into believing that these soft drinks with two tablespoons of fruit juice are somehow more nutritious,” said Michael F. Jacobsen, executive director of the Center for Science in the Public Interest, a Washington-based consumers group. “If you want real nutrition, you should drink 100% real fruit juice . . . (instead) of something that’s probably 90% sugar and carbonated water.”

But James F. Brooks, chairman of Squirt & Co., said: “This concept is not a Hula-Hoop. It is an irreversible evolutionary change in our industry’s direction. And, while these more nutritional products are but a small portion of our total industry today, they are certain to increase in importance.”

Juice-based soft drinks now make up only a small fraction of soft-drink sales. But beverage industry analyst Jesse Meyers, publisher of Jesse Meyers’ Beverage Digest, predicts that such products will make up 20% to 25% of the market within 10 years.

Much of the current excitement over the product category has been fueled by Pepsi’s Slice soft drink.

Since it was introduced in April, 1984, Slice has captured a 3.5% market share, according to Beverage Industry, a Cleveland trade publication. The magazine predicts that, by the end of 1985, Slice’s market share may reach 4%, surpassing the 3.3% market share held by Coke’s Sprite.

This summer, Coca-Cola began test marketing products from its Minute Maid subsidiary--Minute Maid Orange and Diet Orange soda, with 10% orange juice.

Major Promotions

In a bid to duplicate Slice’s success and beat Coke to the market, both RC Cola and Sunkist are revving up for major promotional campaigns, company officials say.

Sunkist is backing its new Diet Sunkist Plus and Sunkist Natural soda with a $12-million promotional budget. In addition, the soft-drink company plans to sponsor a 25-city concert tour by the Beach Boys, whose song, “Good Vibrations,” has been used by Sunkist since 1979 as a theme song for its products.

James W. Harralson, executive vice president and chief operating officer of Royal Crown Cola, said in a statement that his company, the nation’s fifth-largest soft-drink concern, would introduce “a 50% fruit-based carbonated soft drink in the first half of 1986.”

Harralson could not be reached Monday for details or to explain how the products would differ from RC Cola’s line of Nehi Naturals, an assortment of three carbonated fruit-flavored drinks. However, in his statement, Harralson predicted that RC Cola would have to double its sales force in the next three years to meet expected sales growth.

Despite all of the interest in juice-based soft drinks and the strength of the alleged health and fitness trend, some surveys indicate that the eating and drinking patterns of American consumers have remained relatively unchanged in the last 20 years.

It is sometimes suggested, for example, that consumers are forsaking red meat. But red meat consumption is down only 6% since 1970, according to the Agriculture Department, and despite the drop, per-capita consumption still exceeds that of 20 years ago.