The beverages - which were launched in late 2013 and are now available at retailers from Kroger to Vitamin World – are rolling out to 750 Walmart stores this month and will be in 10,000+ stores by the second quarter of 2016, president and CEO Bob Kral told FoodNavigator-USA.
“Three years ago, 60% of protein sales were shopped in specialty stores, whereas today protein is a mass consumer product so a lot of shoppers are now coming into mass to buy protein.
“People want to build lean muscle without calories, and that’s pretty hard to do when you are trying to stick to 1,500 or 1,800 calories a day. And a lot of people don’t want a high-calorie, chalky shake in banana, chocolate or vanilla. At 70 calories, Protein2o is the lowest calorie ready-to-drink protein beverage on the market.”
Around 55% of our audience is female
The product, which contains a blend of whey protein isolate and hydrolyzed collagen, natural flavors and fruit and vegetable juice, is sweetened with sucralose, and appeals to both sexes, said Kral.
“Around 55% of our audience is female and 60% of sales are between the ages of 18-44, which is the sweet spot in grocery.”
While there was some debate at the outset as to where to stock the product, most retailers have settled on the enhanced water category, which is where consumers expect to see it, said Kral, who is preparing to launch a new Tropical Coconut variant with coconut water, that will coincide with a whole new look for the brand due to hit the market late in the fourth quarter of 2015/
“We did an extensive survey asking consumers where they would expect to find Protein2o in the store: In the protein section with things like Core Power and Muscle Milk? In the sports drinks section with things like Gatorade and PowerAde? In the enhanced water category? And 80% said enhanced waters, so for the most part, that’s where we are positioned, or in the healthy beverage section in c-stores.”
Triple digit growth
As for growth, it’s been in the triple digits, said Kral, who co-founded Protein2o with NFL fullback Matt Suhey and Convenience Valet CEO David Baum (they secured an initial $6m in financing from CK Capital and have since raised a further $3m):
“We are in the top third of SKUs in grocery in the enhanced water categories and we’re holding our own in the convenience channel as well. Our sales are tracking at or above the numbers that Bai5 and Honest Tea were doing when they were the same age as us.
“We’re investing a lot in promotions to encourage trial as when people try it they come back and buy it again. We’ve also signed up with coupons.com to target shoppers in areas where our product is on sale, so we push out significant amount of digital ads, and when we’re not on sale we offer redeemable coupons to drive people into the stores.”
The biggest challenge is distribution, he said: “Right now we’re in all major food and beverage distributors in the US, and we have six or seven DSD vendors we’re working with, but we’d ideally like to find a nationwide distributor. We know if we had a national distribution partner our distribution would probably double almost immediately. Distribution is definitely the biggest challenge.”
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