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Natural Ingredients becoming Increasingly Important in the New Zealand Drinks Market

October 11th, 2017

Consumers are more interested in product content than they ever were before, and whether ingredients are artificial or not, along with the benefits these natural ingredients provide. In fact, 2016 saw a strong trend towards drinks that are a mixed blend of natural ingredients, and therefore these so-called ‘new age’ beverages do not fall into a traditional soft drinks category.

A good example of this was the introduction of OVI Hydration by Frucor Beverages Ltd, which is described as an infusion of purified water, fruit juice, honey and green tea, whilst being free from artificial colours, sweeteners, preservatives and flavours. More New Zealand grown fruits were used in soft drinks in 2016, along with honey with these seen as key ingredients. A niche product which was launched was Manukee from Manukee Ltd. It is marketed as a health and wellness honey drink containing the benefits of a particular honey only found in New Zealand – Manuka which has a factor of UMF10+. Other ingredients which are seeing particularly good growth are organic ingredients, in particular within fruit based drinks. 2016 saw the launch of Real Organic juice by NZ Drinks Co Ltd in three specific flavours. Another trend seen in 2016 was the emphasis placed on using only fruit grown in New Zealand in drinks. In particular, fruit grown in the Hawkes Bay region of New Zealand which has seen the Homegrown brand of cold pasteurised raw fresh fruit juice continue to remain popular. Another brand, NZ Orchard Gate, was launched in particular New Zealand fruit varieties such as Apple & Fejoa. Another trend is the use of lighter ingredients in water-based fruit drinks or other plant-based water. For example, Keri Fruity Drink from Coca-Cola Amatil (NZ) Ltd which switched ingredients to an all-natural product with no preservatives, and the continued popularity of coconut water along with other plant-based water such as aloe vera and cactus.

Outlook

The continued growth in the use of more natural ingredients is expected to continue, as consumers appreciate the idea of beverages which are natural, fresh, lighter and which contain no preservatives, as opposed to artificial tasting soft drinks. The development of niche, innovative beverages is expected to continue. In addition these drinks will be considered premium and will therefore likely see strong value growth over the forecast period, as more traditional carbonated beverages continue to decline.

In particular, organic beverages is expected to continue showing good growth (with a value CAGR of 7% at constant 2016 prices predicted) as consumers demand more naturally grown ingredients within beverages. Organic ranges, which are already available in fruit juice, coffee and carbonated beverages are expected to develop further into other key beverages categories. The development of using domestically-grown fruit is becoming popular and will likely continue over the forecast period. As farmers look for more value-added product lines to sell other than just fruit sales, processed fruit for drinks is growing as a trend, with it sold at farmer’s markets and specialised food stores and it is expected to develop further through the supermarkets channel over time.

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Sara Agostino

Sara researches the beverage and tobacco industries in Australia. Her professional interests include strategic, qualitative research and finding out about new consumer products. Sara holds a Bachelor of International and Global Studies (Honours) from the University of Sydney and also has an interest in yoga and traveling to new places.

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