A person’s taste preferences might be affected by the region in which he or she lives, according to a 2009 University of Nottingham study. Professor Andy Taylor said in a statement that taste is determined by genetic makeup and influenced by a person’s upbringing and experience with flavors. “Just as with spoken dialects where accent is placed on different syllables and vowel formations, people from different regions have developed enhanced sensitivities to certain taste sensations and seek foods that trigger these,” he said.
Whether taste preferences are cultural or coincidental, it’s clear that specific regions around the world favor particular beverage trends — all of which have the possibility of being influenced by trends in other countries.
Adults only
Beverage Industry’s April 2012 article about wine and spirits pointed out that U.S. consumers have increasingly embraced flavored vodkas and whiskeys, domestic wines, and ready-to-drink beverages. Many consumers in the Middle East and Africa aspire to emulate some of these Western drinking patterns, according to a Feb. 9 Euromonitor International webinar titled “Alcoholic Drinks Overview: An Intoxicating Yet Half Empty Glass” hosted by Spiros Malandrakis, alcohol drinks analyst, and Jeremy Cunnington, senior alcohol drinks analyst, at the Chicago-based market research firm.
Paralleling the trend in the United States toward traditional and nostalgic cocktails, which many attribute to the popularity of TV shows such as “Mad Men” and “Boardwalk Empire,” vodka, bourbon and dark rum are performing well in Western Europe, Malandrakis said during the webinar.
Likewise, ready-to-drink (RTD) alcohol beverages have found success in the United Kingdom and Western Europe, Malandrakis says. In the ‘90s, RTD malt beverages lost touch with the younger generation and became out of fashion, he explains. Recently, the category rebounded by capitalizing on popular cocktails that consumers order at on-premise establishments.
“Because of the recessionary pressures in Europe, the category changed at exactly the right time and it capitalized on the return of back to home consumption since consumers couldn’t really go out or didn’t have time if you had stayed back home to make a cocktail,” he says. “Now they’re doing particularly well, especially in the U.K., but beyond that, Western Europe as well.”
Performing especially well among female consumers in Western Europe, hard cider has managed to reinvent itself in the last few years, ignoring recessionary pressures, Malandrakis says. It’s performing very well in a small number of global markets, and as a result of its success, is expanding in the U.S. market.
In Latin America, imported spirits categories are doing extremely well due to westernization, premiumization and aspirational consumption, Malandrakis said during the webinar. Sophistication and premiumization will be buzzwords moving forward for the region, he said. In the majority of emerging markets, premiumization is the direction that all beverage categories generally will head, he added.
As in the United States, consumers in the Australasia region are moving away from mass-produced beer and into the craft segment, Euromonitor’s Malandrakis said during the Feb. 9 webinar. Partly because of its associations with craft beer, dark beer is performing well in Italy and Africa — and North America, to an extent — Malandrakis said. In Nigeria, stout beer is doing extremely well, he added.
Brandy and whisky are doing particularly well in India, Malandrakis said. Whisky also is performing well in North America, and has been embraced recently by Japanese consumers because of its exotic character and popularity among generation Y in mature markets, he explained.
Cognac, on the other hand, is shifting away from mature markets and into emerging markets in China. The spirit made inroads in China years ago and now is capitalizing on the country’s wealth, he said. Luxury segments including Champagne and cognac are capitalizing on the niche segment in the Nigerian market. In other regions, however, sparkling wine is dominating Champagne thanks to recessionary struggles.
Cultural preferences
The cultures of some countries can affect the success of specific kinds of wine and spirits. For instance, red wine varietals are the most popular in China because of their positive cardiovascular benefits, and also because of the significance of the color red, which represents luck, to Chinese consumers, Malandrakis explains.
Aging populations as well as cultural, religious and health reasons have sparked an international increase in low-alcohol beverages, Malandrakis said during the Euromonitor webcast. Western populations are growing older, which has altered drinking patterns leading consumers to seek healthier, lower-calorie options, he explained. In Japan, Malaysia and China, low- and non-alcohol beverages are doing extremely well for cultural, religious and health reasons, he added. Similarly, low- and non-alcohol beers are the most dynamic categories in markets with religious and cultural constraints such as the Middle East, Africa, Asia Pacific and other markets, he said. This creates an opportunity for mature Western markets with strict drinking and driving regulations and increasing health concerns and taxation issues, he added. Malandrakis expects to see much more in terms of product innovation in the low- and non-alcohol segments for these reasons.
Similarly, consumers are requesting lower-alcohol wines in the United Kingdom, according to the UK Independent Retailer Report by Wine Intelligence Ltd. Retailers reported growing demand for wines with less than 12 percent alcohol by volume, and for lighter, fruit-driven red wines, suggesting that the trend toward heavy, high-alcohol red varietals in the United Kingdom might be waning, the report said.
Low-alcohol and low-calorie claims were among the top innovations in the global alcohol market from July through December 2011, says Lu Ann Williams, head of research at Innova Market Insights, Duiven, The Netherlands. In Finland, brewery and soft drinks company Olvi offers Olvi Kevyt Karpalo Lonkero, which is a low-calorie cranberry-flavored mixed drink formulated with artificial sweeteners that contains 4.7 percent alcohol by volume, she says. In Australia, Independent Distillers launched Cruiser Free, a sugar-free vodka drink with 4.8 percent alcohol by volume and fewer than 100 calories in a serving. In Nigeria, Olu Olu Palmi Authentic Nature’s Drink contains just 1.2 percent alcohol by volume, and in China, Rio Grapefruit Flavored Cocktail Drink features 3 percent alcohol by volume, she adds.
Additionally, the use of beer or wine as an alternative to other spirits can widen the appeal of a beverage and reduce alcohol content, Williams says. For instance, Baltika Breweries launched Indiana Juice cocktail, which is an orange-flavored beer-based cocktail, in Russia. In the Philippines, Siam Winery introduced Spy Classic Wine Cooler, which blends wine with sparkling water and natural ingredients, the company says.
Turning the RTD cocktail category on its head, some global beverage-makers are drawing on cocktails for inspiration when creating alcohol-free soft drinks. In Italy, Sanpellegrino recently launched a 200-ml. six-pack of a non-alcohol cocktail drink that features ginger flavor, Williams says. Likewise, in the United Kingdom, The Feel Good Drinks Co. launched non-alcohol Feel Good cocktails in a Peach Bellini variety. The Feel Good Drinks Co. says its lightly sparkling Peach Bellini mixed fruit juice drink is made with fruit, water and no added sugar. It can be consumed alone or mixed with Champagne or sparkling wine, Williams adds.
“Soft drinks with cocktail-inspired flavors or more complex flavor profiles should become more prevalent in the future to cater [to] consumers with more discerning tastes,” Williams says.
Specialty or limited-edition craft soft drinks are demonstrating significant potential for a new premium market for the carbonates industry, she adds. An example is Thomas Kemper Soda Co.’s Vanilla Cream-flavored craft-brewed soda sweetened with cane sugar, which was introduced in Malaysia recently, she says.
“Craft-brewed products may spur on flavor innovation for the rest of the carbonates market with the use of herbs and spices and the teaming of unusual flavor pairings,” Williams says. “In the near future, as these trends gain more traction, there should be many soft drink products that appeal to consumers on multiple levels, such as ingredients used, flavor profiles and health claims with price premiums being also thrown in the mix.”
Au naturale
When it comes to ingredients and health claims, natural sweeteners — including cane sugar — have increased in popularity globally, Innova’s Williams says. Now that stevia has been accepted in most global soft drink markets, other natural sweeteners are following in its footsteps. In the United States and abroad, stevia, agave syrup, honey and cane sugar are appearing in beverages and noted prominently on packaging, she says. In Norway, Whole Earth launched Sparkling Organic Ginger, which is sweetened with agave syrup and contains no artificial colors, preservatives or flavors.
From 2009 to 2011, the number of soft drinks launched containing stevia more than doubled, with the share of soft drinks using stevia in total food and beverage launches rising nearly 12 percent during the time period, according to Innova’s Williams. The United States accounted for more than half of the stevia-containing soft drink launches in 2011, however, Europe accounted for 13 percent even though formal European Union approval was not released until the end of 2011, Williams says. Prior to full European Union approval, the use of 97 percent purity Reb A was approved and one of the first reformulated soft drinks was The Coca-Cola Co.’s Fanta Still soft drink, launched in early 2010. By mid-2011, the product accounted for 8 percent of Fanta sales in France and was joined by numerous other stevia-sweetened soft drinks, such as Teisseire’s du Sucre Stevia line and Routin’s Fruiss Stevia line, she explains.
More popular than low-calorie, low-sugar and no-sugar-added claims are claims related to naturalness and the lack of additives and preservatives in a product, Williams notes. Last year, more than 30 percent of total soft drink introductions carried one or both of these claims, she says.
“The natural trend continues to be a big driver of new product development, but in all regions of the world except the United States, no additive-preservatives is a more common product claim; natural is used more often on U.S. labels,” Williams says.
In China, 72 percent of consumers are trying to avoid drinks with artificial ingredients and 75 percent want to buy drinks with natural ingredients, according to reports by Chicago-based market research firm Mintel. However, last year only 1.8 percent of new carbonated soft drink launches carried a no-additives or preservatives claim, highlighting an unmet need that could be filled by beverage-makers, Mintel notes.
“With obesity on the rise in China, consumers are increasingly trying to adopt a healthier lifestyle such as minimizing the intake of artificial ingredients and exercising more,” said Tan Heng Hong, research manager at Mintel, in a statement. “Companies have tapped the health trend with diet carbonated soft drinks, but increasingly, the trend has shifted toward natural products globally and this has opened new opportunities for companies to meet the demand for all-natural products.”
Overall, China’s carbonated soft drink market increased just more than 10 percent from 2006 to 2010, which is significantly faster than other global markets such as the United Kingdom and the United States, Tan Heng Hong reported. Nevertheless, the country’s per capita consumption rate shows room for improvement.
“Besides flavor innovation and natural carbonated soft drinks, the potential of single-serve packaging has not been fully exploited,” Tan Heng Hong said. “Due to their small size, mini packs, if marketed creatively, can be a useful tool to drive sales.”
Full of energy
Following natural and low-sugar/low-calorie claims in the soft drinks categories, energy/alertness makes the Top 10 list of popular health positions, according to Innova.
“It is clear that interest in the concept of performance is continuing, and as a result, the energy and sports drinks market is continuing to grow,” Innova’s Williams says.
The market research firm estimates that the global sports and energy drinks market accrues more than $40 billion a year, led by the United States and Asia, but shows greater product activity in Europe. Like the United States, the European market is seeing brand extensions in the energy drink category. Earlier this year, the Rockstar brand was expanded in Germany with Rockstar Punched, a Tropical Guava-flavored energy drink, and Rockstar Zero Sugar. In Japan, PepsiCo launched Pepsi Energy Cola with Korean carrot, royal jelly, ginseng, guarana, arginine and amino acids. The Coca-Cola Co. introduced Powerade Fuel+, formulated with caffeine and electrolytes, in Australia. The Asia Pacific region is experiencing the strongest volume growth in the sports and energy drinks market. Indonesia, in particular, shows the greatest potential, according to a Feb. 29 Zenith International and Rabobank webinar citing Euromonitor data. From 2010 to 2015, the firms predict volume will grow 25.4 percent in the country.
Ingredients designed to address energy and alertness, such as guarana, taurine and ginseng, also are making their way into the alcohol sector. In the United Kingdom, Dragon Soop Sour Apple is a fermented alcohol beverage featuring vodka that contains high levels of caffeine blended with taurine, guarana and fruit flavors, Innova notes.
Juicy health claims
Natural, organic, gluten-free and allergy-free claims have developed a presence in the juice category, Innova’s Williams says. The market research firm expects these claims to grow rapidly in the future. Juices specifically marketed to children often feature claims such as “100 percent pure juice,” “free from additives” and “free of artificial colors, flavorings, preservatives and sweeteners,” she says. Organic juices that highlight the benefits of vitamins and minerals also are a growing trend in children’s juices, she adds. “No added sugar” also is a popular claim for kids’ juices.
Although apple and orange flavors remain core ingredients in kids’ juices, superfruits, tropical, exotic and unheard of fruits, as well as fruit and vegetable juice blends, are becoming more popular, Williams notes. For example, Red Whortleberry, which is a combination of lingonberry and cowberry, is used in Wonder Berry Mors Red Whortleberry soft drink, which is available in Russia. In Poland, Kubus Marchew Malina Jablko is a fruit-and-vegetable juice made with carrot, raspberry and apple juices.
Williams also points out that cherry juices are increasingly being used in juices and juice drink blends. Last year, cherries accounted for approximately 7 percent of the juice and juice drink launches recorded by Innova, which is a 3 percent increase from 2006, she says. Recent research has shown that cherries are high in antioxidants and have the potential to reduce inflammation, provide pain relief and improve sleep quality, which might be increasing demand for the fruit as consumer awareness rises, she adds. Cherry juices are particularly popular in the United States, but are becoming more popular in Europe with more than 50 percent of the 2011 global total of product launches, led by the United Kingdom and Germany, Innova reports.
In addition to cherry juices, Innova notes that mango and prune are flavors to watch, and that coconut is becoming a prevalent flavor in juice drinks. Coconut’s popularity can partly be attributed to the emergence of coconut water in the wellness and sports drink segment, she says.
Flavor innovation
Increasing interest in natural products and a growing awareness of the health benefits of botanical ingredients have created demand for floral ingredients and flavorings, according to Innova. The number of global food and beverage launches featuring floral ingredients in the first 10 months of 2011 rose 11 percent compared to the same period in 2010, as recorded by Innova. The floral ingredient trend has been popular in Japan and other parts of the Far and Middle East for a long time and now has spread to Western markets, Innova’s Williams says. Globally, beverage categories incorporating floral flavors include hot beverages, such as tea, followed by soft drinks, alcohol beverages and dairy drinks, she reports.
From January to October 2011, the most popular floral flavors in beverage applications were jasmine, lotus, rose and chrysanthemum; however, flavors varied by region, according to Innova. In the soft drinks category, botanical ingredients are being added to fruit drinks and flavored waters to create specialty drinks that stimulate adult taste profiles. In France, Nishamai launched a Pomegranate Hibiscus and Aloe Ferox antioxidant drink, and the Bizz’up all-natural hibiscus-based fruit wellness drink made its debut in Germany.
Considering the numerous trends across the alcohol and non-alcohol soft drink categories, flavor experimentation is a key differentiator, Williams says. Lemon and lime are the most dominant flavors in the category, however, exotic and authentic flavors can attract consumers’ attention, she points out. For instance, PXS Lively Green launched in the Netherlands and is promoted as “the most tantalizing combination of vodka, fine cognac, passion fruit, citrus fruit (pomelo and lime), with peppery tones of cactus.” Puschkin Black Sensation alcohol mix drink also launched in the Netherlands. It mixes vodka with blackberry and the Siberian eleutherococcus root.
Asian fruits also are popular globally, Williams says. The malt beverage Jinx Lychee Licked with Pear, featuring lychee and pear flavors with real fruit juice, launched in Sweden. Other alcohol beverages are adding a kick to their formulations. In Mexico, El Jimador New Mix Tequila Cocktail launched in a Spicy Mango Margarita variety, which features mango and chili flavor. Formulated with an Asian kick, Xide Wasabi+Lemon is an alcohol drink available in Sweden. Other global flavor trends include novel alternatives to fruit flavors, such as sweet or minty flavors mixed with alcohol, herbal and spiced flavors, and the incorporation of nuts, which can add depth, flavor and aroma to a beverage’s profile, Williams says.
Global outlook
China remains the category leader in the ready-to-drink tea market, consuming 12.2 billion liters in 2010, according to the Zenith and Rabobank webinar. The country is expected to increase in volume by 78.5 percent from 2010 to 2015, with Vietnam, Indonesia and the United States experiencing growth in the single digits.
As a category, tea is gaining market share thanks to the promotion of its health benefits, including reduction of the risk for coronary artery disease, stroke and some cancers, Global Industry Analysts Inc., San Jose, Calif., reports.
In 2010, North America surpassed Western Europe and Asia Pacific as the world’s largest region by soft drink value sales, but Asia Pacific is positioned for the most significant growth, according to a Feb. 29 Zenith International and Rabobank webinar citing Euromonitor data.
In the overall soft drinks category, Zenith and Rabobank expect to see a shift in growth from Brazil, Russia, India and China to seven major emerging markets: Mexico, Indonesia, Venezuela, the Philippines, Argentina, Colombia and Thailand. These seven markets should generate $14 billion in retail sales between 2010 and 2015, according to the webinar.
