A blurry future on the horizon

Industry shows trend toward blurring category lines

Although blurry vision is usually a sign that it’s time to make that eye doctor appointment you have been putting off, not all references to blurriness have such a nerve-racking outcome. When it comes to the consumer packaged goods (CPG) market, “blurred vision” could actually be the recipe for success.

In Beverage Industry’s New Product Development Supplement, the special report article highlights some of the key trends from Chicago-based Information Resources Inc.’s (IRI) 2012 New Product Pacesetters that were released earlier this year. IRI Times & Trends Editor Susan Viamari explains that some of the best-performing CPG products don’t just hit on one trend but a blurring of multiple ones.

Euromonitor International, Chicago, also highlighted this blurry future in its July report “Soft Drink New Product Development: The Search for Function, Flavor and Health.” Among its key findings, the report notes that categories are blurring the lines as established categories and brands are pulling influence from emerging ones.

“Bottled water, carbonates and juices are staple soft drink categories, historically leading others in volume terms,” the report states. “However, the growth of [ready-to-drink] (RTD) teas and sports and energy drinks continues to drive new product innovation. Manufacturers of staple products are seeking to emulate the success of these growing categories by incorporating functionality or marketing the naturally healthy properties of their beverages.”

The market research firm predicts that between 2012 and 2017, established categories like bottled water and carbonated soft drinks will make up the majority of growth in the industry, particularly in emerging markets. However, both developed and emerging markets will face competition from less-established categories.

“The ability of global brand manufacturers to balance these two market types has a significant influence on new product launches,” according to the report.

In order to offer innovative products, manufacturers are responding to industry trends like function, taste and health, it adds.

For example, Kate Farms founders Richard and Michelle Lavar developed their Komplete Ultimate Meal Replacement Shakes in response to the meal replacement beverages that their four-year-old daughter, Kate, was prescribed by doctors. Concerned about the sugar and dairy content, the Lavars developed their own meal replacement drink, which is free from dairy, gluten and soy; made from certified-organic ingredients; and contains 21 superfoods including acai, mangosteen, black currant, raspberry and green tea extract.

Large beverage manufacturers also are hitting on these trends. A Bloomberg Businessweek article reported that The Coca-Cola Co. released an RTD herbal tea in Thailand called Habu. The herbal drink is said to contain four herbs: roselle, licorice, luo han guo and cogon grass, Bloomberg reported.

As brand owners continue to release new products, it will be interesting to see how many more will opt to blur the lines.

Jessica Jacobsen, editor of Beverage Industry, visits a range of beverage companies for cover stories and facility tours, represents the magazine at trade shows and industry events, and works with the Beverage Industry team to determine the content and direction of the magazine and its online components. She earned a Bachelor of Arts in Journalism from Marquette University.

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