Stroh Unveils a Juice-Based Soft Drink
Stroh Brewery Co. plans to break a 136-year tradition by making its first non-alcoholic beverage, a juice-based soft drink that will be produced in Van Nuys.
The Detroit-based brewer, which has a reputation for serving mainly a blue-collar market, said Thursday that its soft drink will be premium-priced and made of all-natural ingredients. The company will sell the drink only in California at first, a state it considers particularly receptive to such products.
For Stroh, the move is an effort to compensate for a shrinking beer market and to ride a trend toward alcohol-free and caffeine-free beverages.
Unlike other juice-added soft drinks, Sundance will be more than 50% juice mixed with sparkling water, without any added sugar. Analysts said the only drinks comparable to Sundance now on the market, such as Napa Naturals made by Adams Natural Beverage in Sacramento, are produced by small regional companies selling mostly through health food stores.
Analysts said none of the regional companies has Stroh’s marketing muscle. John Bissell, president of Stroh’s new Pacific Health Beverage subsidiary, would not disclose how much the company will spend to promote Sundance but said it plans a major advertising campaign when the drink is introduced in several months.
Juice-based soft drinks are growing in popularity, and big beverage makers are scrambling to bring new entries to market. The most successful, Pepsi’s Slice, which is 10% fruit juice, now has an estimated 3% of the $25-billion-a-year wholesale soft-drink market, according to Gary Hemphill, editor of Beverage Industry magazine. Coca-Cola’s new Minute Maid sodas also are 10% juice, and many others have substantially less juice in their formulas.
No Word on Prices
“There’s clearly a market for anything that’s mostly juice,” said Joseph Frazzano, a beverage industry analyst with Oppenheimer & Co. in New York. “It’ll probably work.”
Bissell said the new drink will be sold in 10-ounce and 28-ounce bottles in apple, cranberry, grapefruit and orange flavors. He would not disclose the anticipated prices.
Stroh branched out from its beer business last March with its White Mountain cooler, a drink made with juice and alcohol that also is produced in Van Nuys. Stroh, the nation’s third-largest brewer, is continuing to brew beer at its Van Nuys facility, where it has spent $10 million on improvements since acquiring the facility as part of its 1982 purchase of Jos. Schlitz Brewing Co.
$1.6 Billion in Sales
That acquisition, along with the purchase of F&M; Schaefer Brewing in 1981, helped Stroh become a national force in the beer industry. Stroh, which had revenue of $1.6 billion last year, has fought hard to retain its share of a declining industry. Nevertheless, its market share was down to 12.6% last year from the combined share of 23% held by Stroh and Schlitz in 1975.
Still, Stroh has fared better than most of its competitors. There were more than 300 sizable breweries in 1950, versus fewer than 50 today. And among the survivors across the nation, Stroh has climbed from seventh to third largest.