Product Watch: Y Water: One Part Beverage, One Part Toy

You could hardly call the beverage industry boring lately. Ever since last year when the major beverage companies including PepsiCo, Coca-Cola and Cadbury Schweppes voluntarily began pulling their sugary soft drinks out of schools, the industry heavyweights have been on an non-stop product innovation tear. At the same time, we have seen some critical market consumption trends take shape. For a zillion years regular soft drinks like Coke, Dr. Pepper and Pepsi were the most consumed soft drink type among the youth market. Even before the voluntarily pullout, bottled water outpaced regular soft drinks to become the most purchased and consumed beverage type among the audience. Clearly, there is pressure on the leading companies to focus on healthier products or face a backlash from consumer interest groups. Not wanting to go down the same road of multi billion dollar lawsuits, activity in the space has been nothing short of extremely robust via new product intros, lots of acquisitions of specialty companies to round out product portfolios and a new focus. We are keeping an eye on a new beverage that will hit the shelves early next year that will be aimed at the kids and tween market that is one-part beverage and one-part toy. The beverage, called Y-Water, will be carried exclusively at Whole Foods, also known in some suburbanite circles as Whole Paycheck. Y-Water seems to click with all of the relevant lifestyle trends of the moment. The beverage falls under the organic category. The plastic containing the beverage is completely recyclable. The ingredients and flavors are non-traditional and unique using things like rosemary and black carrot juice for starters. (I never even heard of a black carrot until reading about it). Really, at first glance this product seems to hit all of the major touch points of the moment. The initial challenge will be distribution, but if they can gain enough traction from Whole Foods customers, we think it won't be too long before it is carried at other competitive chains like Trader Joes and even some larger more generic supermarket chains.

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