Worcester Business Journal

16 Worcester Business Journal | October 1, 2018 | wbjournal.com F O C U S T H E F O O D & D R I N K I S S U E $1.3 billion & growing Polar Beverage's early entry into seltzers gives it an advantage in a booming market P olar Beverages has been in the Crowley family for more than 120 years. But it's never had an opportunity quite like it has today. Consumers are ditching soda in droves, and overwhelmingly are turning instead to seltzer, where the Worcester company has long been a mainstay, especially in New England, where Polar says it commands roughly half the market. "We were the first to flavor selt - zer," Polar President and CEO Ralph Crowley Jr. said. "We saw this coming in the '80s." For much of the rest of the beverage market, at least, trends are causing companies to play catch-up. Seltzer consumption in the past two decades has risen from roughly 150 million gallons to nearly 800 million gallons, according to New York City con - sultant Beverage Marketing Corp. Beverage giants Coca-Cola Co. and PepsiCo have increasingly elbowed their way into the seltzer market. Both have made overtures for Polar, and, rebuffed, Pepsi made an agreement with Polar roughly two years ago to run distribution centers in Idaho and Wyoming allowing Polar to make an aggressive move into the Northwest. Before that distribution agreement, Polar's only production center outside its Worcester and Scotia, N.Y., plants was one opened in Georgia in 2011. For a time, Polar was shipping its selt - zers from Worcester to the Seattle and Portland, Ore., markets. In the two years since Polar joined with Pepsi, Polar has grown to have a presence in 41 percent of supermarkets nationwide from an initial rate in the 20s, Crowley said. Polar is in CVS lo- cations coast-to-coast, and distributes to at least some locations of many of the largest grocers, including Walmart, Kroger, Albertsons and Food Lion, among others. "You know you're winning when the biggest guys want to be your partners," Crowley said of Polar's deal with Pepsi. Longtime industry player Polar got its start when Dennis Crowley began making carbonated beverages and whiskey in the 1880s, with the later segment fizzling with Prohibition. It wasn't until more recent decades the seltzer market resembled at all what it is today: a $1.3-billion market when measuring just unsweetened selt- zer sold just in grocery stores, accord- ing to Polar. e industry has taken off as more consumers give up soda, a trend that's accompanied awareness of the harms of sugary drinks. Polar has long had a dominant presence in New England, and it re- mains one of the major players, along with Coke, Pepsi and LaCroix seltzer among carbonated beverages sold in the region, according to data compiled by Polar. In fact, Polar hopes that New England's seltzer consumption is a har- binger of what's to come nationwide. In New England, per-capita annual seltzer expenditures at grocery stores totals $9.97, which doubles the next-highest spending region, according to Polar. e company is confident that growth will spread as more consumers in more regions move away from soda. "ere's no reason to think that it's not going to continue to penetrate into other areas of the country," said Duane Stanford, the executive editor of Beverage Digest. BY GRANT WELKER Worcester Business Journal Staff Writer Christopher Crowley, Polar Beverage's executie vice president and treasurer, stands amid the company's 1-million- square-foot Worcester operations. Ralph Crowley Jr. PHOTOS/GRANT WELKER

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