Prepared Foods talks beverage flavor trends with Jared Smith, vice president of business development at Stratus Group Duo LLC, a Los Angeles firm developing and marketing functional, convenient beverages. Its portfolio includes KÖE Organic Kombucha and Perfect Hydration Alkaline Water. Stratus Group’s KÖE Organic Kombucha earned a Prepared Foods’ 2020 Spirit of Innovation award.

Prepared Foods: How would you characterize flavor trends in 2020 in contrast to 2019 or 2018? What was perhaps new or different this year?

Jared Smith: With COVID at the forefront of everyone’s lives, consumers are seeking flavors and ingredients involving super fruits, roots, and herbs that are linked to health benefits. For example, citrus for vitamin C, ginger for gut health and mental clarity, and berries for antioxidants.

We also see consumers gravitating toward the familiar and the nostalgic. This group is purely looking for fun and enjoyment from options like Strawberry Lemonade or Lemon Lime. On the opposite side of the coin, we see consumers who are bored with the mundane, repetitive days of lockdown. These consumers seek adventure in any way they can find it! They want more exotic flavors such as Mango or Dragonfruit.

The fermentation process used to make kombucha like KÖE offers a slightly tart, less sweet flavor profile plus clear immunity-boosting benefits and digestive support. That tart, lower sugar flavor plus our fruit forward flavors is becoming synonymous with “better-for-you” ingredients and attributes.

PF: This year saw Stratus introduce two new KÖE flavors: Strawberry Lemonade and Lemon Lime. Can you tell us a little about your consumer insights process and how you arrived at these flavors?

Smith: Strawberry Lemonade and Lemon Lime flavors were a move to respond to consumer and market demands with enticing, familiar flavors that weren’t yet present in the kombucha set. They replaced two of our original flavors, Raspberry Lemon and Lemon Ginger, which had more direct competitors in the traditional kombucha set.

Early on, we used hundreds of sampling activations to discover that mainstream consumers do not gravitate toward strong herbal or unknown flavors like they do in the traditional kombucha category. We also found that citrus naturally balanced the other flavors in our formula, which results in a kombucha that tastes really, really good. We believed our citrus SKUs could be our top performers, so we pivoted to a more accepted Lemon Lime and a far more consumer-friendly Strawberry Lemonade flavor.

PF: How describe your core consumer-buyer? Who are they and what other beverages are they considering?

Smith: The kombucha category only has a 20% household penetration, so we formulated KÖE to target the other 80% of the population. Our core skews cater slightly to female, urban consumers in the 24- to 34-year-old age range. They are socially engaged and seeking convenient, better-for-you foods and beverages that easily fit into their busy lives. They are shopping all channels, including mass, eComm and even C-Store, which is why we are seeing significant volume growth from accounts like 7-Eleven SoCal and Amazon.com.

KÖE is a shelf-stable kombucha, so while we will pull some consumers from the refrigerated kombuchas, we are mostly capturing consumers from categories like tea, soda and juice; especially as we see these categories continue to decline while consumers seek more functional, better-for-you beverages.

PF: Where do you go for new flavor inspiration?

Smith: We use mainstream flavor profiles for KÖE that new consumers entering the kombucha category can easily understand. We keep our eyes on stand-outs in the hard seltzer and sparkling water categories as well. We have had early success with KÖE Strawberry Lemonade and Mango, so we will continue to expand with similar flavors in mind. We are in the process of innovating a much larger pipeline of new flavors, which will be ready for shelves by the end of 2021.

PF: Are flavor “blends” the way to go? How or when do you decide for a flavor blend versus a straight, singular flavor?

Smith: Ultimately, our goal is to create great tasting flavors that the consumer can easily understand. We often let the quality of ingredients dictate our final flavors. For example, with KÖE Mango, we source a delicious Alphonso Mango puree from the Philippines that doesn’t need anything else to compliment it. And while Raspberry and Dragonfruit complement each other extremely well, neither of the delicate fruits could stand alone as individual flavors.

PF: Has it ever been hard to find the right flavor in an organic form? Compared to say, five or seven years ago, we’d have to believe there are more certified organic flavor options available to your formulators now? Any overall thoughts on the market’s progress?

Smith: Yes – finding the right flavor is a difficult process and we give immense amounts of credit to our R&D team for their amazing network of suppliers and streamlined processes that allow us to innovate quickly! Organic flavors are becoming more and more available, but there is still a surprisingly high number of flavors that are not organic or that require additional work to be certified. And not surprisingly, many organic flavors don’t have the taste profiles we’re after, so finding the right ingredients and suppliers is still a challenge.

PF: Congrats on Stratus Group winning one of Prepared Foods’ 2020 Spirit of Innovation honors this year! During an award ceremony, Chief Strategy Officer Louisa Lawless talked about deciding against a more traditional, “vinegary” kombucha flavor profile.

Meanwhile, Stratus went after some white space opportunities with shelf stability and added probiotics. Can you share any behind-the-scenes R&D stories about the hardest aspect of flavor formulating with organic juices, essences or extracts—all while hitting your targets of functionality and/or shelf life?

Smith: Our biggest task was transitioning the original line from 90 calories to the new 35-calorie formulation. We transitioned three of the five original flavors (Mango, Raspberry Dragonfruit and Blueberry Ginger) and we feel that we maintained their flavor integrity while cutting the calories by about 70%! It was a complex balancing act between juices, flavors and a blend of organic cane sugar, stevia and erythritol.

PF: What’s your favorite KÖE flavor? Why?
Smith: Lemon Lime is my favorite because it is the most versatile flavor in the lineup. It’s great chilled as-is and incredible with your favorite spirit, especially a splash of tequila for the easiest low-sugar margarita you’ve ever had.

PF: Any 2021 predictions for beverages and/or beverage flavors?
Smith: There will be a continued trend towards flavored, functional beverages that support immunity. We know low-sugar and less-sweet options will continue to thrive. We also anticipate continued adoption of tart flavors and tropical profiles as well.