7 Global Beverage Trends for 2018
There are a slew of interesting products appearing on market shelves the world over. This eclectic list of products within alcoholic drinks to bottled water are arguably a direct result of a bricolage of identifiable trends and stories within the beverage universe.
The hydration experience
Manufacturers are betting big on creating products that provide an experience. Bottled water is the leading horse in the soft drinks race where companies are looking to add functionality and play a key part in innovating on the hydration experience. The hydration experience is becoming extremely important either by way of creating an experience with the product itself or creating a context where consumers are excited to consume it.
Coca-Cola Europe for example, is introducing Oasis Aftershock under its flavoured water range. The marketing of these products is clear. The flavours are meant to give consumers a hot and a cold option. The spicy raspberry is flavoured with chilli while the Chilled Cherry is meant to be more cooling. The duality of the experience on offer is expected to create dynamism within the fastest growing category of bottled water globally on the back of declining carbonate sales.
Robinsons Refresh’d and Glacéau Smartwater are also examples of creating a story or an experience for the consumer looking for a reason to trade up their purchase. Glacéau is called “smart” because it is produced using the principles of the hydrologic cycle. Clearly, we are going to see more of these products from a range of sources, not just the big manufacturers. A good precursor of things to come is the launch of Coca-Cola frozen pouches in Japan. Japan is being treated with a lot of interesting products being tested in this market. More innovation can be expected.
Curious about craft
Interest in craft variants is definitely present but the more pertinent question is are people buying into the category? The main issue with craft beer is the lack of knowledge and arguably at times, the blanket of obscurity surrounding it for the non-initiated. Choice in this case is not benefitting the category as a lot of consumers are interested and curious about it but not enough to veer too far away from their regular beer. Taste profiles are also an important consideration when making the choice to purchase.
While there are scores of new launches in the market, two particular examples strike a note because of what they represent. Guinness has launched two new beers from the Open Gate Brewery to what they term as bridging the gap between mainstream beers to the craft experience. This is to make the experience of choosing craft beer easier for those who are left a little confused at the wide choice of unfamiliar brands, variants and flavours.
The second was the introduction of non-alcoholic craft beer by Braxzz which taps into and takes advantage of reduced alcohol consumption worldwide. Consumers are interested and it will be interesting to see how the category landscape takes shape in the coming years.
The clean label agenda
Health and wellness sells. This is no longer a trend but has transcended to a lifestyle choice. People are getting used to paying more for a healthier variant and more accepting of different tastes and texture, as long as there are benefits. Consumers are now more accepting of a “sausage” made of soy or a gluten-free vegan brownie, and products are working towards tapping into the healthy living mantra. It has become exceedingly important to get the on-pack messaging and the labelling on point. There has been a lot of trade and industry press on this topic over the last couple of months but the key takeaway is that the goal is to tell a story of a better product so getting the right mix of a shorter, cleaner ingredient list versus an appropriate amount on pack explanations is going to be an important mix that companies will have to get right.
Functionality – the new flavour?
Flavour remains a key tactic used to differentiate within the category; for example, Perrier has launched a peach variant alongside its lime, orange, pink grapefruit, green apple, strawberry and watermelon variants in the US. However, it could be argued that functionality is the new flavour, as more brands are differentiating based on their functional qualities rather than flavour. Flavours are now chosen to accentuate a product’s functionality message. Pomegranate is a popular flavour because of its associative benefits of high antioxidant content, despite only needing to include a trace amount. Functional ingredients improve the nutritional profile of a product, where now it is commonplace to find added protein or fibre to convey functionality.
Manufacturers are investing in new variants even if the consumer segment buying such products is still niche. For example, Pepsi’s Naked Juice Green Machine contains an interesting ingredient – spirulina. Spirulina is a blue green micro algae used for its elevated antioxidant, vitamin and protein properties despite high sourcing costs.
Another interesting addition touted as the next big ingredient in beverages is ginger. Ginger, an age old ingredient in some parts of the world and cultivated for its medicinal benefits, digestive and anti-inflammatory qualities, is now also becoming known for its versatility and use as an addition to a wide variety of drinks, such as coffee, tea, juice, enhanced water and functional beverages.
Cascara is a word used to describe the dried skin of a coffee bean which was typically discarded. But Cascara is filled with antioxidants and is now being used as an ingredient. The list goes on however, these products have an upmarket consumer base and not affordable to everyone. It would be interesting to see the democratisation of health and wellness for the masses with manufacturers creating better variants at affordable prices.
Evolution in packaging
Packaging used to be just about protecting the product, designed to be ergonomically viable and visually pleasing. Packaging needs to be sustainable, have responsible (and succinct) messaging, subscribe to a high clean label standard, be very much convenience-led and quirky enough for millennials. That really is a tall order and yet there are products vying to achieve this. This is perhaps illustrated in Nestlé’s and Danone’s ambition to make 100% of its packaging recyclable or reusable with a bio-based PET. Another good illustration is evident with Pernod Ricard, which has announced its collaboration with Loliware, the company that produces Lolistraws, a biodegradable straw which functions and looks like its plastic counterpart but is made entirely from seaweed-based material. New products will do well to get their packaging message right from the onset, because consumers are paying attention.
The big O: Organic
Organic beverages are carving out its own niche within the health and wellness space so much so that it deserves a different sub trend/story to address it. With global carbonates and more specifically cola sales declining, there is a rising interest in organic carbonates without artificial flavourings. Gusto Organic has launched its own line of organic beverages to leverage first entrant advantage in organic carbonates. The energy drinks category is also offering “cleaner” products.
Organic yerba mate and organic green coffee bean variants are produced by a company called Mamma Chia to leverage not only caffeine but naturally-occurring antioxidants, vitamins and minerals. Organics by Red Bull is a surprising nod in this direction, with a premium organic line extension. Even the premium sparkling water brand San Pellegrino has added two organic teas across Canada, made from organic tea extract, cane sugar and fruit juice concentrate. Organic beverages are seeing a lot of interest as an addition to balance out company portfolios in the post sugar tax world.
Taxing beverages and the sparkling aftermath
A headline from a Beverage Daily article in December 2016 proclaimed “2016: The Year of the Sugar Tax”. The topic, the article said, was being intensely debated around the world with momentum to implement it gathering steam steadily in many countries. One of those countries was the UK, which announced the prospective introduction of a sugar tax in 2016. What is interesting is that if the taxes were implemented in 2016 when it was announced, 25% of the soft drinks volume in the UK would have been subject to the levy. Fast forward two years to actual implementation, just 12% of volumes are affected. What this obviously means is that manufacturers have focused on developing healthier products by reformulating. Range and choice are being tailored to offer beverages which taste good – this remains of paramount importance – but are healthier.
Capri-Sun has launched a reformulated recipe and so has Sprite, by reducing sugar by at least 50%. There are also companies branching out into categories that will bring in value, diversifying their offering and tapping into the trend of consumers looking to reduce their calorie intake. Good idea Inc. a Swedish company, for example, has done this by choosing carbonated unsweetened drinks for their blend of amino acids and chromium that manages blood sugar levels, effectively producing ready-to-drink sparkling water that controls blood sugar. Comparable examples include Smirnoff, which launched its Spiked Sparkling Seltzers in different flavours in the US. It is a drink that is only 90 calories in a 12 oz. can and is free from sugar and artificial sweeteners. Another company, Squeez’d Beverages, has launched a ready-to-drink combination of sparkling water, vodka and fruit flavours. The sparkling segment is seeing a lot of traction and will produce a lot of innovative products in the coming years.