CRYSTAL LAKE – When Kraft Foods introduced MiO, a liquid water enhancer, last year it wasn't just another product for the nation's largest food maker.
The company hadn't launched a new food or beverage category since DiGiorno – the rising crust pizza – in 1995. So Kraft put a lot into promoting MiO. And it appears to have paid off.
MiO sales have nearly doubled to more than $100 million in the first six months of the year, Kraft has said. To put that in perspective, the beverage industry's flavored water segment generates about $1 billion in sales annually.
Since MiO went on sale last March, a number of similar products have joined it on store shelves. And Coca-Cola recently announced it’s entering the field with the debut of Dasani Drops.
As competitors crowd the marketplace, Crystal Lake-based packaging products maker AptarGroup Inc. is hoping the creative dispensing system it designed for MiO will help Kraft stay out front.
"When Kraft wanted to introduce MiO, one of their most significant new introductions in years, they turned to Aptar for a solution that would enhance MiO’s uniqueness," AptarGroup President and CEO Steve Hagge said. "We are constantly searching for new applications for our technologies and this was a great opportunity for Aptar to enter a new category, concentrated water flavorings."
Aptar's devices can be found on products in the beauty, personal care, household, food, beverage, and pharmaceutical markets. The company's valves and pumps dispense everything from Lady Gaga's much-hyped perfume, "Fame," to Tropicana's Pure Premium Orange Juice.
Aptar works with customers to create packaging and dispensing systems. This process can take a few months or several years, said Eldon Schaffer, president of Aptar Food and Beverage.
It took three years to design, develop and launch the 89-ounce Tropicana dispenser for Pepsi Co., Aptar officials said at a recent analysts meeting in New York City.
For MiO, the goal was to create something that was fun, unique, and easy to use.
"In the case of MiO, we were able to leverage our successful silicone valve know-how to create a no-drip, no-mess, dispensing closure with a custom shape that, when placed on the bottle, completes the package’s teardrop shape," Schaffer said.
While Aptar's contributions to a product are often essential, they are frequently overlooked. Customers buy Lady Gaga's perfume for its celebrity name and smell, not it's dispersal system.
But with MiO, Aptar's work is front and center and "certainly contributes to a positive experience and brand loyalty," Schaffer said.
"The dispensing system is part of the user’s overall product experience," he said. "For MiO lovers, the ability to squirt as much or as little flavoring as they like puts the consumer in control, making the flavor of their water truly theirs.”
Single-serve powders – such as Crystal Light – were the forerunners of concentrated liquid water enhancers, said Gary Hemphill, managing director of Beverage Marketing Corp., a research and consulting firm dedicated to the beverage industry.
Concentrated liquid water enhancers, such as MiO and Dasani Drops, are more convenient because they offer multiple servings from a single small container and allow users to add flavor according to their own taste. Unlike their powdered predecessors, liquids allow the flavor to be quickly and evenly distributed, Hemphill said.
"Companies introduced flavored waters to offer a change of pace, but water flavoring is a fairly small part of the overall water beverage business," Hemphill said.
Beverage Marketing Corporation doesn't yet track the use of products such as MiO. But Hemphill said that could change if they are successful.
While MiO offers a new destination for Aptar's products, it's a relatively small part of the company's overall business. In 2011, the company had annual revenue of more than $2 billion. Its food and beverage division, which includes MiO, accounted for 13 percent of total company sales in the first half of this year. Its beauty and home segment was responsible for 64 percent of sales, according to a recent presentation to analysts.
“One of the strengths of Aptar is our diversified business model. We serve many different markets, in several different geographic regions with the broadest product portfolio in the industry," Hagge said. "While we participate in hundreds of new product introductions every year, it’s rare that any one will be a needle mover in terms of our bottom line. The more diverse we are, the better insulated we are from softness in any one particular market, region, or product line.”
Aptar is a leading provider of dispensing solutions. It has operations in 19 countries and more than 10,000 employees. Aptar's headquarters is in Crystal Lake and the company employs more than 450 people in McHenry County.