The key trend in the
non-alcohol drinks industry, according to the research analyst firm
Euromonitor International, is consumer health and wellness products.
Healthy drinking trends are expected to not only drive bottled water sales
in the future, particularly functional/enhanced and flavored variants, but
will also have an impact on such healthy alternatives as functional drinks.
Threat of obesity
Obesity poses a major risk for serious diet-related
non-communicable diseases, including diabetes mellitus, cardiovascular
disease, hypertension and stroke, and certain forms of cancer. Consumers
also are continually bombarded with images of the “ideal” body
and unrealistic goals. Standard carbonates, high-sugar fruit/vegetable
juice, and functional drinks face competition and cannibalization from
diet-based counterparts. According to Euromonitor, this health trend will
create consumer demand for functional soft drinks. Older consumers will
seek drinks with ingredients that claim to lower cholesterol and the risks
of heart disease, cancer and obesity.
The carbonates downturn can be blamed on growing
demand for lower sugar drinks. 2005 has seen considerable focus on
alternative sweeteners such as Splenda, and non-cola carbonates
outperformed cola in developed and developing markets in 2004. Juice-based
drinks, which are perceived as healthier than cola, have also seen improved
Of non-cola carbonates, lemon/lime and orange
dominate, with exotic flavors also becoming increasingly popular in most
regions. Diet extensions of new products such as Diet Mountain Dew, Diet
Vanilla Coke and Diet Pepsi Twist have all performed better than full
calorie counterparts. This suggests taste is still important to the
consumer but health is now a factor in beverage preference. Coca-Cola
addressed the health trend with the unsuccessful C2 and the yet-to-be
determined Coca-Cola Zero. Non-cola carbonates have also had to
reformulate, with Cadbury Schweppes extending 7 UP with 7 UP Plus, claiming
lower sugar content and increased functional properties.
Eat your fruits and vegetables
Global off-trade volume sales of fruit/vegetable juice
experienced an increase of 4.7 percent in 2004 over 2003 according to
Euromonitor International. Volume growth in sales of fruit/vegetable juice
has benefited from the general consumer trend toward healthier lifestyles,
particularly in mature markets such as North America and Western Europe.
Parents and young children have become the target consumers for fortified
juices, with product development focused on ACE
(vitamin A, C and E) juice drinks boosting volume sales of the category.
Aging populations in developed markets also will offer
good opportunities for manufacturers to market products to older age
groups. Britvic in the United Kingdom launched the adult-targeted J20
nectar in 2002, and was a major success following heavy promotion in 2004.
Value sales almost doubled vs. 2003.
International health concerns
The rapid development of economies in developing
regions is creating similar health and wellness product demand in countries
as diverse as China, Romania, Indonesia, Brazil and Russia. In addition to
enhanced bottled water, fortified fruit juice, functional drinks and
conventional bottled water are set to drive volume sales of non-alcohol
drinks as consumers in developing regions and in developed markets lose
confidence in the municipal water supply.
How safe is the water?
Euromonitor found globally that the consumption of
bottled water is gaining on carbonates, and in 2006 is expected to overtake
carbonates and become the largest sector of the non-alcohol beverage
market. The growing health trend and concern over the quality of tap water
both are helping growth in volume sales.
Japan remains the world’s largest and most
developed market for functional bottled water, and modest growth in 2004
suggests that signs of consumer fatigue with amino acid products have
started to set in.
Function and enhancement
Functionality and enhancement are becoming key
components of product innovation and extension in the soft drinks market.
The infusion of health properties in premium products such as enhanced/
functional flavored bottled waters, and fortified fruit juices will
continue to be a key feature especially in developed markets. These types
of products have the potential to become cash generators for the long term.
The greatest trend in bottled water is
functional/enhanced and flavored products. A number of beverage companies
have introduced new functional waters with “nutraceutical”
enhancements in a bid to attract health conscious consumers. Not only did
Energy Multi-Vitamin Water Corp’s Energy
Multi-Vitamin Enhanced Water boast 125 percent of the U.S. recommended
daily allowance of vitamin C and 40 percent of the RDA for vitamins A, E,
B2, B3, B5, B6 and B12, but it also had only 13 grams of carbohydrates in
Touch of taste
Flavored bottled waters have benefited greatly from
growing consumer interest in weight-loss programs and low-carbohydrate diets. Although flavored bottled water is still a
small category, global off-trade sales doubled during Euromonitor’s
1997 to 2004 review period, and rose some 25 percent in 2004 alone.
In the United Kingdom, the
world’s largest market for flavored bottled water, sales have been
driven by the number of big brands, such as Volvic Touch of Fruit, that
have given consumers an alternative to sugar-laden and carbonated
alternatives. In 2004, Argentina emerged from nowhere to become the
world’s fourth-largest off-trade market for flavored bottled water,
recording volume growth of almost 400 percent in 2004 alone. BI
Jeanette Bengtsson is non-alcohol drinks account
manager for Euromonitor International. Euromonitor is a leading provider of
global business intelligence and strategic market analysis, and has more
than 30 years experience of publishing market reports, business reference
books, online databases and bespoke consulting projects. Euromonitor
International is headquartered in London, with regional offices in Chicago,
Singapore, Shanghai and Vilnius.
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