The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
The London Olympic Games enter its second full week. All eyes are on the world’s top-class sportsmen and women, whose steeled bodies will be performing to their peak ability, not only because of incessant training but also owing to the athletes’ customised dietary regimes. Optimum hydration is a major cornerstone, particularly for endurance athletes, and the days when everyday healthy drinks such as water and orange juice were deemed sufficient are long gone. Sports science has established that the mere replacement of lost fluid is not sufficient and that carbohydrates and minerals are also needed to maintain performance levels.
Medal-laden athletes are an inspiration to the world. Their consumption habits have a well-known knock-on effect on average consumers who may only be sporadically active but who choose to consume sports-oriented products on aspirational grounds and/or because they are fashionable.
Sports drinks is the first and most obvious category on which the London Olympics will have a major impact. These products already enjoy worldwide mass-market popularity, particularly among young men. Euromonitor International’s soft drinks statistics show that global off-trade volumes rose by 28% over the 2006-2011 review period to exceed 15 billion litres in 2011. In per capita consumption terms, the US led with 21.1 litres, followed by Denmark with 14.9 litres and Japan with 13.6 litres. The UK, host of the 2012 Olympics, registered just 9.8 litres in 2011, demonstrating that there remains plenty of growth potential.
Coca-Cola is an official sponsor of the Games. Therefore, its Powerade sports drinks brand, the event’s official sports drink, is set to benefit hugely. The company has recruited a stable of high-profile athletes as ambassadors, including Sheffield-born Jessica Ennis, the current European Heptathlon Champion and Spaniard Javier Gómez Noya, winner of the 2008 and 2010 World Triathlon Championship titles.
Coca-Cola advocates the stance that anyone exercising at high intensity for more than 30 minutes, or for more than 60 minutes at any intensity, is at risk of performance-stifling dehydration. This would also apply, for instance, to anyone involved in school sports as well as occasional gym goers. Water, as the company points out, has substandard rehydration properties for three reasons – it does not contain adequate levels of minerals and carbohydrates, it shuts down the thirst receptors and it does not possess the performance benefits of a sports drink.
Powerade is the world’s second-ranking sports drinks brand, commanding a 14% off-trade volume share in 2011 behind Gatorade’s (PepsiCo) leading 46%. In the UK, Powerade also ranks second with a 14% share, trailing behind GlaxoSmithKline’s Lucozade with its impressive 56% volume share.
As the London Olympics’ official sports drink, Powerade is likely to enjoy a boost to both its sales and its share. However, the sports drinks category as a whole stands to benefit, especially as it now also has regulatory endorsement on its side. After a lengthy assessment process, in May 2012 the European Commission finally published its full list of 222 permitted health claims for food and beverage products in the Official Journal of the European Union.
Sports drinks can now make the legal and official claim that “carbohydrate-electrolyte solutions enhance the absorption of water during physical exercise” and also that they “contribute to the maintenance of endurance performance during prolonged endurance exercise”.
One of the most pervasive health and wellness trends globally is consumers’ enduring quest to seek out naturally healthy products. Euromonitor International’s health and wellness data show that in 2010, in the 32 markets where in-depth health and wellness research is carried out, 40% of health and wellness-positioned products were marketed as naturally healthy. For comparison, organic products accounted for just under a 5% share, and the fortified/functional category, which includes sports drinks, 32%.
Naturally healthy fruit/vegetable juice claimed one quarter of naturally healthy beverage sales. This includes the superfruit juice category, which registered a dynamic 62% increase in value over the 2005-2010 review period to reach retail value sales of almost US$3 billion in 2010.
One of the most exciting types of superfruit juice to emerge in recent years is coconut water, long a staple juice item in Brazil where it accounts for 69% of the 100% juice category in off-trade volume terms. Coconut water is now rapidly gaining popularity in other geographies, a trend amplified by major players’ increasing focus on the newcomer.
Coconut water, extracted from unripe (green) coconuts, is packed full of electrolytes such as potassium, magnesium, calcium and phosphorus, affording it a naturally isotonic composition. Presenting a natural antithesis to conventional sports drinks, which are often perceived to be “chemically” formulated – an image augmented by their often lurid colours – coconut water drinks have the potential to pull in a whole new audience, including health-conscious women who may previously have spurned sports drinks and instead relied on water and juice for their rehydration needs.
Examples of sports drink-positioned coconut water products include Zico, marketed with the tagline “Nature’s Sports Drink”, ONE Active and Jinga Sport (Transworld Beverages Inc). Coca-Cola acquired a majority stake in Californian-based Zico Beverages in April 2012 while PepsiCo holds a majority stake in ONE Natural Experience, another Californian-based enterprise.
The 2012 Olympics provide a perfect platform for showcasing coconut water beverages, and coconut water makers have not been slow to garner the support of star athletes. US Olympic gold medallist sprinter LaShawn Merritt, for instance, became a ONE Coconut Water spokesperson in May 2012 to promote the drink’s health and nutritional benefits in advertising campaigns as well as through social media.
Besides boosting the fortunes of major sports drinks brands and pushing newcomers like coconut water into the mass-market spotlight, an Olympic event can also serve the smallest of players.
The Olympic Games are viewed by millions of youngsters, a small proportion of which will go on to become the elite athletes of the future. Eventually, many serious sportsmen and women will find themselves drawn to looking beyond mass-market brands, opting instead for products made by niche companies founded and run by individuals who are passionate sportspeople themselves. One such example is UK-based TORQ Ltd which prides itself on its exclusively British-made, high-quality ingredient products, sold via the internet and independent retailers. To keep its products – including TORQ Energy and TORQ Recovery sports drinks – affordable, the company opts for powdered formats.
Unlike mass-market brands, for which major sporting events like the Olympics are likely to bring an instant surge in sales, promising niche companies’ revenues swell more on a slow-burn mode. The most successful ones have the potential to develop big brands, buoyed by the coming of age of each new sporting generation.