The North American juice market is expected to decline in value from $14.8bn in 2019 to $12.5bn by 2023, following similar decline patterns to pre-COVID-19. Simultaneously, the value of healthier sectors in hydration such as enhanced water is predicted to rapidly grow with a value of 9.4% compound annual growth rate (CAGR) between 2019 and 2023, according to GlobalData, a leading data analytics company.

GlobalData’s report, ‘Failure Case Study: Odwalla’, examines Coca-Cola’s decision to discontinue the premium juice brand, Odwalla, as part of the beverage giant’s decision to streamline its juice category. According to Coca-Cola, the discontinuation of Odwalla ultimately was driven by prioritization of regional brands with more scalable opportunities such as Topo Chico. This reflects the current challenge of juice brands competing against the rising popularity of functional drinks.

Ramsey Baghdadi, Consumer Analyst at GlobalData, comments: “The juice sector in North America has been consistently declining, shown by its -2.1% CAGR between 2014 and 2019. Despite Odwalla’s long-term existence in the non-alcoholic beverage market (over 40 years), it was competing in a saturated and declining sector. Only top brands such as Simply Beverages have managed to increase in value within the juice sector due to well-executed packaging and engaging marketing, which Odwalla failed to take leadership in.”

Changing consumer attitudes in North America has led to a decline in juice consumption. Before COVID-19, consumers were already showing concerns towards their diet and health. In fact, in 2019, 43% of North American consumers claimed they were actively trying to reduce their consumption of sugar and 59% reported that they proactively seek products that improve their health. This illustrates even further Odwalla’s challenge to effectively compete in a crowded market and measure up to consumer demands.

Amid COVID-19, brand familiarity has become a vital aspect for successful brand performance in the juice sector. In week 7 of GlobalData’s COVID-19 recovery tracker survey (September 2–6, 2020), 49% of consumers in the USA somewhat or strongly agreed that they will buy products only from their favorite brands. In this case, Odwalla would have found it a challenge to compete with brands that have an international presence, high familiarity, and brand trust, such as Powerade.

Baghdadi adds: “An important aspect to recognize from Odwalla was its late decision to introduce a healthier formulation and failure to ensure trust through an authentic packaging strategy.

“Long-term, new juice brands have a better chance in seeing success in markets that are predicted to grow regarding this category. For example, juice brands would be more likely to experience successful share-building on continents such as Asia and Africa, where the category is predicted to grow in value.”