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April 1, 2015

Opportunities and Challenges in Specialty Food Ingredients

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March 26, 2015

Despite healthier rhetoric, better branding and marketing drive Lithuanian soft drinks

Povilas-SugintasAnalyst Insight by Povilas Sugintas - Research Analyst

Health and wellness is one of the most discussed trends in all Lithuanian FMCG industries and soft drinks products are usually recognized as one of the most impacted areas. Consumers, the argument goes, should avoid drinks perceived as unhealthy and either reduce their intake, abandon them altogether or seek a compromise by looking for healthier versions of the same drinks. However, in looking at Euromonitor International’s soft drinks data in Lithuania over the period of 2009 to 2014 (specifically, CAGRs – compounded annual growth rates) a rather different picture emerges. In fact, the best results were achieved by the same categories which have faced the most scrutiny. At the same time, categories appearing to be well-positioned to benefit from current healthy lifestyle trends were stagnating and even declining in some cases. Large marketing budgets and powerful branding have proven to be better indicators of growth than wellness positioning.

Continue reading "Despite healthier rhetoric, better branding and marketing drive Lithuanian soft drinks" »

March 9, 2015

Water Enhancers: The Next Big Thing in Soft Drinks?

Emily CoxAnalyst Insight by Emily Cox - Research Analyst

Water enhancers have hit mainstream in the US, following Kraft Foods’ launch of Mio in 2011, which boosted sales in liquid concentrates, with retail value sales jumping by 125% in 2012 after growing by 402% in 2011. The Coca-Cola Co followed suit, launching Dasani Drops in the US in 2012. The new product gained a 4% off-trade volume share of concentrates in 2014.

Schweppes Australia Pty Ltd, owned by Asahi Group Holdings, became the first company to test water enhancers in Australia, looking to capitalise on the strong growth of the category in the US. In 2014, the company launched the new brand Squirt, through its already-established Cottee’s range, and LQD+ as an entirely new brand. The new brands were launched as a trial in South Australia initially, to be purchased through leading supermarkets and convenience stores. LQD+, targeted at consumers aged 20-29, is sugar-free and each pack contains 24 drinks with three flavour offerings, Berry, Lemon and Tropical. Cottee’s Squirt is aimed at families, leveraging on the strong position of the established Cottee’s brand.

Concentrates recorded the worst performance of the major categories over the review period, declining at a CAGR of 3% in terms of off-trade volume sales. Consumers turned away from these products due to health and wellness concerns regarding sugar content, strong competition from other categories of soft drinks and lack of innovation.

Continue reading "Water Enhancers: The Next Big Thing in Soft Drinks?" »

March 8, 2015

New Technologies to Spell the End of Stevia?

Simone_BarokeAnalyst Insight by Simone Baroke - Contributing Analyst

Next year, a new generation of stevia sweeteners produced by fermentation instead of extraction is going to hit the market. In other words, the leaf of the stevia plant will soon be surplus to requirements. On the one hand, this is great news for the industry: it will save costs and provide a more consistent product with a superior taste profile. But it also means that stevia’s already wobbly status as the only “natural” low-calorie sweetener is about to be thrown into even greater jeopardy. 

Stevia sweeteners 2.0

In February 2015, US agricultural and food products giant Cargill announced that its food ingredients arm, in collaboration with Swiss food technology company Evolva Holding SA, had successfully developed a method of producing stevia sweeteners by means of fermentation, thus foregoing the laborious process of extracting them from the leaf of the Stevia rebaudiana plant. The product is expected to be ready for launch in 2016. 

Cargill is, of course, not the only ingredients player going down this route. US company Stevia First, for example, reported last year that it was working on developing microbial fermentation processes with the aim of producing steviol glycoside sweeteners. 

Continue reading "New Technologies to Spell the End of Stevia?" »

March 4, 2015

The Rising Power of Female Consumers

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The global female population totalled an estimated 3.6 billion in 2014 and is expected to reach 4.2 billion by 2030. Average disposable income amongst women is the highest it's ever been, and women are living longer than men.

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February 22, 2015

Diversificação marca o mercado de bebidas no Brasil

Com o amadurecimento da categoria de Soft Drinks (bebidas não alcoólicas) no Brasil, a diversificação de produtos é fundamental para ter sucesso no mercado. Enquanto as bebidas carbonatadas enfrentam resistência devido às preocupações com a saúde, os sucos são beneficiados pela imagem saudável das frutas e super frutas. Confira a análise completa no vídeo.

Further Insight into Coca-Cola’s Q4 Challenges

Howard TelfordAnalyst Insight by Howard Telford - Senior Beverages Analyst

Both Coca-Cola Co and PepsiCo made their fourth quarter and full-year results public last week. At the top-line level, these results offer a mixed bag to analysts and investors. On the positive side, both companies beat quarterly market expectations in terms of profitability. On a more negative note, earnings and volumes were weak in developed market beverages and both companies had to lean on diversifying their respective category portfolios and strengthening emerging market presence in order to secure and defend global pockets of growth.

Last week, I discussed four challenges for Coca-Cola ahead of its reported results. Perhaps the most immediate strategic concern among these challenges is the risk of a general slowdown in these emerging markets, and the loss of valuable positions in these growth regions to either local players or larger, multinational competition:

“Is share performance in these vital growth markets holding up, or is the company losing ground to domestic players, particularly brands with value positioning?”

Euromonitor International’s Competitive Analytics tool allows us to better visualise the importance of emerging markets to Coca-Cola’s recent volume growth strategy over 2008-2013 – and the very real, specific dangers that an emerging market slowdown in 2014-2015 would pose to the company’s strategy.

Continue reading "Further Insight into Coca-Cola’s Q4 Challenges" »

February 14, 2015

Diversification Key to Soft Drink Market in Brazil

As the soft drinks category in Brazil matures, product diversification will be key to success in the market. Carbonates are struggling due to unhealthy image problems while juices benefit from fruit's healthy positioning and superfruit claims. Watch the video for complete insights.

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February 9, 2015

4 Challenges for Coca-Cola Ahead of Q4

Howard TelfordAnalyst Insight by Howard Telford - Senior Beverages Analyst

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Addressing uncertainty in low-calorie CSD strategy

Governments all over the world are publicizing obesity concerns, and the sugar content of soft drinks has come under increasing scrutiny. The Coca-Cola Co has already developed low and zero calorie drinks that are the top ranked brands within their categories. However, the low calorie cola category is anemic in the US, reflecting consumer concerns over alternative sweeteners in CSD. The company should continue to research low-calorie alternative CSDs – in particular natural low-calorie options and low-calorie soft drink options outside the traditional CSD category.

To that end, one key question for quarterly reporting next week will be the performance of Coca-Cola Life – the company’s stevia sweetened cola, first launched in Latin America and then rolled out to the UK and US last year.

Continue reading "4 Challenges for Coca-Cola Ahead of Q4" »

February 6, 2015

Sports Nutrition Companies Targeting Sports and Energy Drink Consumers

ChrisSchmidtAnalyst Insight by Chris Schmidt - Consumer Health Analyst

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As sports nutrition continues its push to increase its appeal beyond the bodybuilders and elite athletes that long dominated sales, companies are increasingly eyeing the most mainstream of the sports foods categories: sports and energy drinks. Representing a market opportunity of over US$50 billion in retail value sales in 2014, the category has an obvious appeal. However, with so much of the space occupied by global packaged foods and soft drinks titans, gaining an appreciable share of the sports and energy drinks market may prove to be a herculean task for even sports nutrition’s largest companies.

Continue reading "Sports Nutrition Companies Targeting Sports and Energy Drink Consumers" »

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Recent Posts

Opportunities and Challenges in Specialty Food Ingredients

Despite healthier rhetoric, better branding and marketing drive Lithuanian soft drinks

Water Enhancers: The Next Big Thing in Soft Drinks?

New Technologies to Spell the End of Stevia?

The Rising Power of Female Consumers

Diversificação marca o mercado de bebidas no Brasil

Further Insight into Coca-Cola’s Q4 Challenges

Diversification Key to Soft Drink Market in Brazil

4 Challenges for Coca-Cola Ahead of Q4

Sports Nutrition Companies Targeting Sports and Energy Drink Consumers