Brad Avery - BevNET.com | July 8, 2022 - Since it first opened its doors in 1926, Jel Sert has never lost its focus on producing powdered drink mixes. Now, as the powdered beverage category experiences an upheaval through an influx of innovative functional brands, the Chicago-based company is turning to new brands and channels to fuel growth.
According to NielsenIQ, powdered drink stick sales grew 38% in the 26 weeks ending June 18, with Jel Sert growing in lockstep with the category, also up 38% in the period. Citing Nielsen, the company said it is now the third largest dollar growth driver in the stick category, after PepsiCo and Unilever, and it has gained 2.5 dollar share points in Walmart stores, up 150% year-over-year.
Jel Sert president Ken Wegner said he sees “limitless opportunity” today in the powdered beverage category and noted that the space has experienced an influx of sales and innovation alongside the growth of the $17.1 billion bottled water category.
“The ability to ride that wave with the growth of bottled water and the ability for the consumer to see that hydration on-the-go and the ability to take a stick of powder that is very small and very easy to tuck into a pocket or a purse or a backpack, and go with it whether it’s a Hydro Flask or it’s a bottle of water or it’s some other type of water bottle that you carry. There’s nothing better and easier to do.”
The 96-year-old company is now working to increase its production capacity, expanding its existing facility while also exploring the opportunity to open additional plants. While increasing private label and contract manufacturing is part of the expansion goal, Wegner also hopes to increase manufacturing of large 20-, 30- and 40-count variety packs, which have become a top selling format in both retail and ecommerce.
According to Wegner, ecommerce is playing an increased role in Jel Sert’s overall strategy, selling on Amazon and Walmart.com, as well as direct-to-consumer. The company said Jel Sert’s Amazon business grew nearly 100% year-over-year between January and May and now, it is investing more marketing spend on digital ads while also launching new websites utilizing Shopify for its individual brands, including flavor mix Wyler’s and energy and hydration line Pure Kick.
Pure Kick, which is also available in more than 20,300 stores nationwide, has become one of the fastest growing brands in the Jel Sert portfolio and Wegner said it is now looking to create co-branded flavor innovations to drive sales. The company has partnered with Hershey to produce Jolly Rancher flavored drink mixes under the Pure Kick brand, including Green Apple and Watermelon, which Wegner said will launch in the near future. The company is also working on another co-branded line extension for Pure Kick which will launch early next year, he added.
Candy tie-in flavors, in particular, have emerged in the energy category over recent years. Nutrabolt’s C4 line recently introduced Skittles and Starburst flavors, while Anheuser-Busch InBev-backed Ghost Energy has unveiled a variety of RTD and powdered energy drinks with branded flavors such as Sour Patch Kids, Warheads, Swedish Fish and Bubblicious.
For Jel Sert – which also produces Skittles and Starburst flavored drink mixes among other brands – Wegner said these partnerships have played a significant role in increasing sales, noting that the built-in brand awareness helps the products to stand out on shelf and drive trial from curious consumers.
“The consumer can look at it and have that preconceived notion of what this product is going to taste like,” he said. “It’s not just us calling out, ‘Hey, we have Pure Kick Green Apple’ – we’ve got Pure Kick with Jolly Rancher Green Apple.”
However, those partnerships are also now extending outside of the realm of indulgent sweets. This year, Jel Sert introduced a line of branded drink mixes for Vitafusion, an adult vitamin gummy maker, which debuted in Walgreen stores nationwide. The all natural mixes are available in Hydration and Energy varieties and Wegner said the products will launch in additional retailers over the next six months.
The company is also now putting more weight behind its sports drink mix brand All Sport. Originally created by PepsiCo in 1993 – and changed hands several times in the ensuing decades – Jel Sert purchased All Sport in 2020 from Keurig Dr Pepper. At the time All Sport had largely fallen out of public recognition and was primarily sold as a rehydration product for industrial workers in powder and freezer pop formats.
Last year, Jel Sert reintroduced All Sport into the mainstream via powdered stick packs, primarily in the grocery and dollar channels. While Jel Sert has maintained the industrial business, Wegner said the company has initially focused on converting workers, who consume the drinks and freezer pops on the clock, to purchasing All Sport all the time.
Under Jel Sert, All Sport has now added a zero sugar line and Wegner said the company will also seek to create co-branded flavors. Beyond grocery and dollar, he hopes to grow sales online and expand into mass retailers as well.
Beyond its core powder business, Jel Sert is continuing to work on its expansion into the alcohol space. In 2020, the company introduced SLIQ Spirited Ice, a line of premium alcoholic freezer pops available in flavors such as rum-infused Strawberry Daiquiri and tequila-infused Classic Margarita. According to Wegner, Jel Sert has now extended into contract manufacturing for frozen alcohol snacks and beverages – including spirit, brewed and wine-based products – and also plans to introduce additional product formats under the SLIQ brand in the coming months.
“These are things that we will continue to do, our pipeline is very full for the next five years [with] new and innovative products that we’re going to be bringing into the marketplace and new flavor options and opportunities,” he said.