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
A slow shift has been happening in the world of beverages, the culmination of years of smaller trends that together have helped guide the evolution of global consumer preferences. The tyranny of sweet once spearheaded by carbonates has given way to a more democratic landscape populated by a diverse range of more nuanced, more refreshing, and more complex flavour profiles.
While this trend has been evident in foodservice for a while, especially among taste-making independents, it has manifested particularly clearly in off-trade soft drinks consumption. A look at what types and flavours of beverages have been seeing the most growth across all channels can offer valuable insight to foodservice operators who are looking for ways to fine-tune their specialty beverage offerings, helping them to craft a more varied, higher-value beverage menu that maximises appeal.
The central thrust of this trend has been in the global health and wellness movement, in which consumers in all global markets have been showing a growing preference for more healthful drinking options, whatever the local defining criteria may be. This has meant less sugar in some markets, fewer calories in others, and in yet another group, the use of more wholesome, natural sweeteners like real fruit juice. This has driven a slow decline in consumption of traditional carbonates at the global level, as consumers seek out healthier alternatives to what were once their markets’ core favourites.
Euromonitor International’s soft drinks data illustrates this shift, showing cola carbonates to be the only category of soft drinks to see zero growth in total volume worldwide in 2013. As a whole, the carbonates category showed just 0.4% of total volume growth in 2013, making it the slowest growing drinks category. On the other end of the spectrum, RTD tea was among the fastest growing at 10% total volume growth, coming in second behind Asian speciality drinks.
Asian speciality drinks are a broad and complex category that includes popular branded beverages like Calpis and Yinlu, as well as traditional drinks like bird’s nest, ginger, lemongrass, sugar cane, tamarind juice, etc, many of which are national specialities in various parts of Asia. The category is understandably concentrated within Asia Pacific, but its incredibly strong volume growth still speaks, in part, to growing demand for health-based beverages and wider variety beyond sweet carbonates.
The move toward less sweet drinks has played out differently in various regions, and its strongest manifestation has tended to be in those that are the most developed. For example, a look at total volume growth in absolute terms from 2011-2013 shows that while bottled water was a major growth category in every region, other strong growth areas tended to be determined according to relative market maturity. Juice and carbonates for example, two traditionally sweet categories, saw the most growth in Asia Pacific, Latin America and the Middle East and Africa. On the other hand, in more developed regions like North America, Australasia and Western Europe, growth favoured lighter beverage types like RTD tea and sports and energy drinks. All of this points to the fact that this trend is strongest in fully developed markets where consumers have plenty of beverage options, as well as the disposable income to seek out new beverage experiences and make choices based on criteria beyond price and availability alone.
This desire for more options also lends insights for foodservice operators in developed markets. Rather than returning repeatedly to the same beverage choices, soft drink consumers in certain markets are now looking to build a personal portfolio of beverages—with varying flavours and functions—that respond to their changing needs throughout the day’s many drinking occasions.
This emphasis on variety means that despite the general trend toward lighter and more refreshing beverages, there is still very much a place in the market for the right kind of indulgent drinks, especially in foodservice. While it may seem counterintuitive, the same trends that drive consumers to seek out a diverse range of lighter, healthier, high-value options throughout their usual routine can also lead to demand for the occasional highly indulgent beverage, especially when that beverage feels particularly indulgent and worthy of the splurge (more on that here). As a result, foodservice operators who gear their beverage menu entirely toward the lighter end of the spectrum will be missing out on an important segment of demand.
Sweet, indulgent beverages can still work in the current landscape, but they need to be positioned carefully and in line with modern preferences. Starbucks’ recent launch of handcrafted sodas, for example, might seem ill-timed at first glance; however, the drinks are made with natural ingredients, carbonated to order, sweetened without high-fructose corn syrup, and flavoured in ways that appeal to modern palates. The three varieties—Golden Ginger Ale, Lemon Ale and Spiced Root Beer—all feature spicier or more refreshing flavours on the forefront, with just enough sweetness to add an element of indulgence. In other words, “sweet” is part of the offering, but not the main selling point.
So, is sugar dead? Not exactly, and certainly not everywhere, but in developed markets consumers’ relationship to sweet flavours has certainly changed. The most effective beverage portfolio is now about addressing a wide range of flavour profiles, offering maximum diversity in the kind of demand addressed and the type of occasions served. It follows that sugar should no longer be seen as a necessary foundation to any successful beverage platform, but it should not be entirely neglected either. Rather, operators should seek to provide a carefully chosen, diverse, and unique range of beverages, from light and refreshing to indulgently sweet, allowing consumers to take their dining-out drinks in the same way they take their retail drinks: widely varied and tailored specifically to their needs.