Special Report: Global Beverage Trends
International markets exploring more options in beverages.
Health and wellness continue to be points of interest for the beverage industry not just in the United States, but for other countries and regions as well. On the global scale, “no additives and preservatives” is the top health position for juice and juice drinks launched from Oct. 10, 2010, to March 11, according to Innova Market Insights, Duiven, The Netherlands. Ranking No. 2 was “no added sugar” followed by “natural” and “organic” at No. 3 and No. 4, respectively, the market research firm reports.
Richard Hall, chairman of United Kingdom-based Zenith International, listed natural among the seven key trends to watch this year at the InnoBev Global Beverages Summit in Washington, D.C. Hall’s other trends to watch are as follows:
• Value, whether it be low price or justifying a premium;
• Benefit, adding extra benefits that people look for in products;
• Ethical direction, having a useful point of view for companies and products;
• Individualized products, administered by contact through social media;
• Exploration, consumers show a willingness to explore, and
• Social contribution, products that help consumers feel good about themselves because of a societal benefit.
One area where natural and other health-related claims are being associated with beverage products is in Latin America, Hall says.
“The themes in Latin America are not dissimilar to those in the rest of the world,” he says. “Consumers there are just as aspirational â€” they want enjoyment, they’re becoming more concerned about their health and their environment and they like the appeal of more local, more natural products that speak to them as individuals on specific occasions and they’re looking for a combination of refreshment and benefit.”
Western Europe, Eastern Europe and Asia also are regions where health and wellness are among the trends, says Richard Haffner, head of global beverage research at Euromonitor International, Chicago. Health-oriented niches, such as organic, are a part of Western Europe because it is a more developed market, Haffner says, whereas Eastern Europe is interested in health and wellness, but also the convenience component, such as instant coffee. Asian markets, though, can be less restrictive on regulatory claims for products compared to other regions, so a lot of health innovation happens in those markets, he says.
One health innovation Haffner notes in Asia are ingredients that could promote healthy skin. Skin health rounds out the top 10 of functional health positions for global juice and juice drinks targeting specific health conditions from Oct. 10 to March 11, Innova reports. In Asia, collagen is incorporated in beverages to attract females because of beauty claims, according to Innova data.
The top functional health position globally for juice and juice drinks targeting specific health conditions is vitamin and mineral fortified, according to Innova data. Digestive and gut health is the No. 2 claim for juice and juice drinks targeting specific health conditions, and probiotics and prebiotics use is increasing in the category because of its digestive health benefits, the market research group reports.
Earlier this year, The Coca-Cola Co., Atlanta, announced that Minute Maid Pulpy achieved global retail sales of more than $1 billion. The brand launched in China in 2005 and now is available across three continents in 18 geographies. Minute Maid Pulpy is a juice drink that has orange pulp squeezed into it.
Pulpy was introduced in Algeria, Malaysia, Singapore and Vietnam in 2010, as well as Mexico as Valle Pulpy under the del Valle trademark, which also achieved global retail sales of more than $1 billion, and in Kazakhstan as Piko Pulpy. Coca-Cola said the brand is poised for additional global expansion in 2011.
“The rapid scalability of the Pulpy brand in developing markets is critical to the continued growth of the global juice business of The Coca-Cola Co.,” said Joseph Tripodi, chief marketing and commercial leadership officer for The Coca-Cola Co., in a statement. “The development in China of the Pulpy brand, one that is now growing share in many other markets, is a testament to the ability of our system to rapidly scale innovation from any part of the world.”
In Asia, and particularly China, a characteristic that adds value to juices is having chunks of fruit in the product, Haffner says. In China, the biggest juice brands might have about 24 percent juice content, he says. Because of the fruit pulp in the beverage and the additional vitamins in the pulp, the product is perceived as healthy, he adds.
Beverages that are not 100 percent juice are continuing to grow as consumers turn to lighter, more refreshing products, Zenith’s Hall says. He adds that this could be because of the cost of 100 percent juice and its preference as a start of the day beverage instead of being viewed as an all day refreshment. Because of the economic slowdown, familiar brands, including lighter juice drinks, have fared well in Europe, Hall says.
Although preference for juice content can vary across countries and continents, top flavors used in juice and juice drinks remain fairly constant. Orange is the No. 1 flavor in product launches globally for juice and juice drinks from Oct. 10 to March 11, Innova states. Apple, fruit, mango and grape round out the top five of flavors, according to Innova data.
Coinciding with the better-for-you beverage trend, low and no calorie sweetener options are growing. In the United States, some zero calorie as well as lower calorie beverages have incorporated Reb A since it achieved generally recognized as safe status in 2008. Reb A is derived from sweetest part of the stevia plant. World volume growth of stevia is expected to post more than a 50 percent compound annual growth rate (CAGR) from 2010 to 2015, according Euromonitor data.
Brands in other countries also have launched beverages featuring the stevia-derived sweetener such as Danone’s Bonafont’s Levite brand of flavored water across Latin America and Aquafina Plus Vitamins 10 Cal in Canada, which is a low-calorie, vitamin-enhanced water that features PureVia, an all natural sweetener that includes stevia.
With concerns about heart health, obesity, diabetes and other health-related claims in Europe, sugar alternatives have played a large role in that region, Haffner says. Another area seeing product development with alternative sweeteners is Latin America. Low-calorie drinks are growing in Latin America rapidly, while they remain a niche segment of the beverage marketplace, he says.
Of the low-calorie segment, low-calorie colas are the fastest growing category in Latin America. They make up about 10 percent of the colas, but are helping fuel the growth of carbonates, which is the No. 1 category in Latin America, Haffner says.
Other sweeteners that Euromonitor has forecasted world volume growth for are sucralose, acesulfame K, saccharin, aspartame and cyclamate. The CAGR for these sweeteners ranges from less than 1 percent to 2.5 percent.
Experimentation around the world with sweeteners and blends is occurring, but beverage companies are not breaking into major volumes in the major brands, Zenith’s Hall says. Reb A use is more developed in North America whereas in other regions it is in the experimental stage, but still shows good signs of promise, he says.
Although carbonates will continue to grow in Latin America, Euro-monitor’s Haffner says that bottled water is growing fast as well. Latin America along with Asia and Africa are all reporting notable growth of bottled water.
“I think the big story around the world will be bottled water, mainly because of rising incomes in developing worlds,” he says.
When addressing Asia, growing incomes, people looking for cleaner drinking water and a health orientation are helping to grow the bottled water market, Haffner says.
Looking at market changes, water is overtaking carbonates and Zenith’s Hall notes that on a global scale even though mature markets are slowing down the developing markets are growing in terms of size and incomes, Hall says.
In Africa, a younger population is helping to drive the economies there, he adds. In some cases between 50 and 70 percent of the population are younger than 30 years of age, Hall notes.
With Africa having the projected largest growth of population and incomes, that growth is expected across all segments of the population including aging generations, Euromonitor’s Haffner says. This population growth and income increase has fueled people to look for cleaner drinking water, which will make a fast-growing market for bottled water, he says. Although the African base is smaller than the base in Asia, bottled water could grow as fast in Africa as in Asia, Haffner says. He predicts bottled water might overtake carbonated soft drinks in the next five years. BI