Around the Beverage Cooler
Ingredient suppliers discuss the latest industry
Tropical flavors and
functional ingredients continue to drive beverage development, according to
participants in Beverage Industry’s ingredient supplier roundtable. Like many of us, these
ingredient specialists have observed the trend toward low-carb as well as
all manner of products designed to make the consumer healthier and live
longer. In addition to mid-calorie offerings, ready-to-drink teas are
making a comeback, meal replacement beverages could soon become a viable
category, and bottled water will continue its climb to the top of the
beverage consumption charts.
Participating in the discussion are: June Montanari, beverage flavor
marketer at International Flavors &
Fragrances Inc., Dayton, N.J.; Victoria de la Huerga, vice
president, beverage business unit at Wild
Flavors, Erlanger, Ky.; Steve Wilbur, vice president of
marketing at David Michael & Co., Philadelphia; Emmanuel Laroche, marketing manager, Symrise, Teterboro, N.J.; and Suzanne
Niekrasz, director marketing communications, Robertet Flavors, Piscataway,
Q: What are the most important beverage trends you
have observed this year?
Steve Wilbur: One of the
major macro trends running throughout the food industry today is health and
wellness. The consumer's desire for healthy products certainly reaches into
the beverage category, and we've seen a real trend this year for low-carb
beverages. We've also seen a good deal of interest in ethnic influenced
beverages particularly in the Hispanic marketplace, along with energy
drinks, and nutritional or functional beverages.
June Montanari: Healthy
features and benefits are very important to consumers. There was an
explosion of low-sugar, low-carb soda, juice, and nutritional drinks this
year. Also, more products were designed for the needs of specific consumers
such as women, kids or athletes. Health trends are influencing flavor
trends, too. Pomegranate, was rediscovered because of its antioxidant
properties, and now it's popular in various new age juice drinks. Green tea
is no longer niche as a beverage, it's also a flavor in juices in addition
to being a featured ingredient in dish and body products. Exotic tropical
flavors such as mango, guava and passionfruit are more mainstream.
Emmanuel Laroche: Some
of those trends are beverages geared to Hispanics; low-carbohydrate
products in soft drinks, coffee drinks and fruit juices; sour tastes;
exotic flavors in the tea segment; tea and fruit juice in RTD products; and
launches of flavored gin and rum.
Victoria de la Huerga: First,
I would say, are functional beverages. These range from energy drinks,
which are growing extremely fast, to sports drinks, yogurt drinks, soy
beverages and teas. RTD tea growth has slowed over the past few years,
however this trend seems to be reversing in 2004.
Secondly, low-carb products have hit every beverage
category, including alcoholic beverages. Replacing some or all of the
nutritive sweetener with high-intensity sweeteners such as Splenda is seen
across the board.
Third is bottled water. This category has been growing
so strongly over the past decade without an end in sight. The success of
bottled water has led to enhanced water products.
Fourth are flavored carbonated beverages. This is a
key tactic that the major beverage companies are taking to keep consumers
in their franchise.
Fifth are flavored spirits. This is important in that
this category of beverages has been flat for so long. Numerous flavor,
color and drink innovations such as martinis have helped bring new
consumers into the category.
Suzanne Niekrasz: The
‘you are what you eat’ movement in this country has driven a
huge number of new product launches, most recently addressing the
low-carbohydrate phenomenon. As consumers move away from high-fat,
high-carb, high-calorie products, marketers look to new technologies and
ingredients to formulate products that consumers want. For instance, many
beverage marketers are exploring new alternative sweeteners and sweetener
blends, which opens up new avenues of research into flavor interactions.
The end result of all this activity will be beverages that are better for
you and that deliver delicious taste as well. This trend will continue to
blur the line between beverages and food, which is great news for everyone
in the beverage industry, as it opens up opportunities outside of
beverage’s traditional arena.
No discussion of this year’s beverage trends is
complete without mentioning limited-edition, “in and out,”
seasonal launches. Products such as Mountain Dew Pitch Black
(Hal-loween) and LiveWire (summer), Pepsi Holiday Spice (fall and winter
holidays), Sprite Berryclear Remix (summer), and Starbuck’s
Gingerbread Latte Frappuccino (in-store, winter holidays) delivers
excitement and buzz to existing brands.
A similar strategy was successfully implemented by
alcohol spirits marketers over the past few years, where launches of
single-serve malt beverages featuring prominent spirits brand names helped
create a buzz around the parent brand. While many of these products
didn’t have long-term staying power, they played a role in brand
marketing and awareness, and in that light were very successful.
There is a lot of activity in various food categories that use a familiar flavor profile, mainly indulgent
dessert types, in an unusual way. Examples include products like
strawberry cheesecake-flavored yogurt or a S’mores-flavored energy
bar. Driving this trend is the little excitement such products give
consumers in their daily lives. It’s a trend that bears watching in
the beverage category, with particular relevance for dairy beverages,
syrups and coffee, where flavors such as cookies ‘n cream,
crème brulee and chocolate mint have already been launched.
Q: What are the issues product developers are dealing
with in 2004?
Victoria de la Huerga:
Product developers are facing a host of
challenges. Many of the companies they work for have select supplier lists,
which limit their ability to leverage new technologies. They are being
asked to get products to market more quickly with fewer resources, while
managing risk. Additionally, they are being asked to bring innovation to
the numerous beverage categories. And lastly, they are also being asked to
look at outsourcing some or all of product development. This gives them
more to manage but it also gives them access to technology that could take
years to develop internally.
Product developers are also always challenged with
ingredient costs. This year, the industry has seen milk prices shoot way
up. Additionally, certain juices have also increased significantly. Gum
Arabic, a common ingredient used in emulsions, has also been scarce,
causing availability and costing challenges.
Steve Wilbur: This year, several issues of concern for developers in the
nutritional or functional beverage area centered around increased
competition, processing costs and stability. These issues resulted in the
reformulation of many of these type of products to taste better at a
more economical price. This becomes a huge challenge for the developer.
June Montanari: IFF
designs flavors to help endure price increases in raw materials caused by
fluctuations in agricultural crop yields in products such as grapefruit
oil, coffee, cocoa and vanilla. Other challenges include how to make
low-sugar taste like full-calorie and mask artificial sweetener off-notes.
Masking and stabilizing soy is another challenge.
Emmanuel Laroche: I would
say much shorter speed to market; more sensory testing required on project
submissions; validation of proactive concepts before submission; flavors
required to solve “sensation” issues; and regulatory issues
(GMO-free, organic, etc.).
Q: In what product category are you seeing the most
innovation? Please give examples.
Suzanne Niekrasz: Flavored RTD tea continues to create excitement in the tea
category, due in no small part to widespread
media focus on the naturally healthy properties of tea. Added to that is a
"wow" factor in the form of varietal-type teas, which in a
single-serve RTD beverage invites easy culinary exploration. Not too many
years ago, green tea was a relatively unknown beverage here in the United
States, but today there are numerous examples of green and other varietal
teas making a splash in the category, such as white, rooibos (a.k.a. red),
honeybush, chai, and other varietal types. The ability to formulate teas
with unique fruit, herb, or spice combinations or with various sweetener
blends provides marketers with many opportunities to differentiate their
beverage offerings and capture today's fickle, impulse-driven
Hybrid beverages came into their own this year, most
notably juice-plus type beverages such as tea and juice and dairy and
juice, as well as sparkling/carbonated juices and drinkable yogurts.
Another very hot category has been “ades” such as lemonade,
limeade, and grapeade, offered “straight up” or in combination
with well-loved flavors such as strawberry. Ades dovetail neatly with
long-standing trends such as “old-time
goodness” and authenticity, while delivering “summer in a
Carbonated soft drink flavors are quickly expanding beyond cola and lemon-lime with berry, tropical, and citrus blends.
Both Mountain Dew and Sprite Remix have
Victoria de la Huerga: I
would say beverages that fit into the wellness subcategory of functional
beverages. These beverages are levering the latest in scientific research
on efficacy. For instance, there have been a number of beverages launched
based on white tea. While white tea comes from the same plant as black and
green tea, it has a higher level of polyphenols in the tea. Polyphenols are
Another example would be the addition of phytosterols
to juice. And lastly, taking drinkable yogurt with live active cultures and
adding the required nutrients for use as a meal replacement beverage.
Q: If you were to look into your crystal ball, what
trends and/or concerns do you see in the upcoming year?
June Montanari: Developing
nutritious products will be necessary to meet the needs of more
health-aware consumers. Capitalizing on consumers unquenchable thirst for
water will also continue to present challenge/ opportunity for beverage
Emmanuel Laroche: I see
health and wellness across the board; continued assault on carbonated
beverages; sports drinks becoming more flavorful; fewer products coming to
market from the Big 3; expansion of new distribution channels; continued
development of fruit juice and dairy-based drinks geared to Hispanics and
men; development of nutritional beverages for kids; and development of specific beverages for seniors.
Steve Wilbur: I think you will see more product introductions geared
toward specific ethnic groups. The low-carb market will continue to expand
and existing products will be reformulated to meet low-carb claims, such as
Coca Cola C2 and Pepsi Edge. New nutritional beverages, electrolyte
beverages, polyphenol beverages, energy stimulant beverages such as Red
Bull, and various flavored green tea and white tea beverages will be
introduced. In terms of flavor, I feel we'll see more tropical flavors in
the marketplace such as mango, guava, and passionfruit.
Suzanne Niekrasz: Flavors
that delve deeper into fruit profiles are trending up. When faced with a
choice between apple vs. green apple, orange vs. mandarin orange or
tangerine, or tea vs. green tea, consumers today are more likely to be
intrigued by the more complex varietal type over generic flavor profiles.
And even when the named flavor type isn’t labeled, such authentic
flavor profiles can offer a point of flavor differentiation from competing
In the same vein, more geographic type flavor
profiles, such as Naartjie Tangerine, Guavadilla, and Honey-bush Tea offer
flavor differentiation. Provenance is a growing trend, and consumer
awareness of our planet’s rich fruit diversity will grow once
"country-of-origin" produce labels are introduced to American
supermarkets. And while there are certainly many other factors influencing
American consumers’ support of farmers markets and roadside stands,
the idea of global provenance will build on that concept and resonate with consumers.
One flavor to keep an eye on in 2005 is blueberry,
which has benefited from widespread reporting of the fruit’s high
antioxidant values. It’s also a well-loved berry that has not until
recently been very well represented in the beverage category. While already
in mixed berry combinations and a contributing factor in all things
“blue,” I think we’ll begin to see blueberry get top
billing in more new beverage launches.
On the tropical front,
Mango and “Tropical” are now mainstream, while our growing
Hispanic population – and their flavor preferences – continues
to build awareness of more exotic flavors such as papaya, guava, and
passionfruit. Meanwhile pomegranate is now reaching mainstream awareness as
more products featuring that flavor profile hit store shelves. Like
blueberry, it too, benefits from reported healthy associations.
The health and wellness mega-trend will continue to
impact the beverage industry and our applications work for decades to come.
Reducing the negatives in America's diet requires sophisticated knowledge
of the interactions between flavor formulas and functional ingredients. As
history shows, mainstream Americans will not drink something just because
it's good for them — it must first and foremost taste great.
Victoria de la Huerga: As
far as trends, we will continue to see functional and wellness products
continue to grow. Linked with this is organic beverages as well as
weight-management products. These are all on target with the consumer's
desire to manage their health. Addition-ally, I don't see bottled water or
energy drinks slowing down anytime soon.
As for concerns, obesity/overweight issues will continue to
be at the forefront of the industry. Food companies are fighting back with healthier
products, lowering calories and portion sizing to address consumers’ concerns.
World demand for nutraceutical chemicals will increase 6.1 percent
annually to $9.6 billion in 2008, supplying the $173 billion nutritional products
industry, reports The Freedonia Group Inc., a Cleveland-based industrial market
research firm. The strongest growth opportunities will remain in herbal and
non-herbal extracts. Functional additives, particularly probiotics, omega-3
fatty acids, soy isoflavones and lycopene are among other nutraceuticals projected
to generate above-average gains. Through 2008, the developing regions of Asia/Pacific,
Latin America, Eastern Europe and Africa/Mideast will provide the fastest growth
for nutraceuticals. For more information on the World Nutraceuticals study,
|WORLD NUTRACEUTICAL DEMAND
(million U.S. dollars)
|Canada & Mexico
|Source: The Freedonia
Group, Cleveland, Ohio