A 2007 “Global Bottled Water” report from Zenith International found bottled water consumption grew 8% in 2006 to reach 187 billion liters, driven strongly by the emerging economies of Asia and East Europe, which accounted for nearly half of worldwide growth. North America saw sales improve 9%, with the U.S. and China being the two largest national markets. “Consumers are benefiting, as bottled water becomes more widely accessible, and as its health, well-being and hydration attributes become more universally accepted,” commented Zenith research director Gary Roethenbaugh. “Global volumes are expected to overtake carbonated soft drinks within two years, according to Zenith estimates.” The group predicts bottled water consumption will hit 251 billion liters by 2011.

Water introductions in the U.S. in 2007 included a pair of launches seeking to deliver a rounded assortment of benefits. Snapple introduced Antioxidant Water and LYTeWater, the former promising to improve energy, help restore the body and support a healthy immune system. The latter, meanwhile, was a zero-calorie line enhanced with electrolytes and minerals.

The seven flavors of Antioxidant Water were inspired by such superfruits as pomegranates and açai berries. Ingredients included vitamins A, B, C and E, as well as caffeine, guarana, ginseng, ribose, electrolytes and grape seed extract. LYTeWater included electrolytes from magnesium, manganese, calcium and zinc “for premium hydration.”

However, the biggest bottled water news of the year came in manufacturers’ decisions to list the source of their waters. PepsiCo in July announced it would note on-label that its Aquafina bottled water was made with tap water. Coca-Cola also posted that its Dasani was made from purified water sourced from public reservoirs.

To a Tea

Health proved a strong selling point in many categories this year, but it is expected to impact tea sales for years to come. Packaged Facts predicts the U.S. market for tea will double over the next five years, propelled by wellness concerns. It says sales of instant, leaf, liquid concentrate and RTD tea will hit nearly $15 billion by 2012 (up from $7.4 billion in 2007). A Packaged Facts report notes, “A functional beverage, tea fits into the well-established movement among aging Baby Boomers to seek out foods and beverages that promise wellness and anti-aging effects.” Benefits linked to tea include weight loss, protection against Alzheimer’s and a lower risk of certain cancers--the latter two a result of tea’s polyphenol content.

However, wellness is only one element boosting tea’s attractiveness. The product’s diversity is also a key factor: Packaged Facts forecasts that by 2012, the specialty tea segment of the market (currently about 36% of the total sales) will grow to command more than half of total U.S. tea sales.

Tea likewise found its way into the adult beverages segment, with Anheuser-Busch developing IntensiTea, a family of fruit-flavored “hard” teas with 5.5% alcohol by volume (ABV). This was hardly the company’s only innovation, however. A flavored malt beverage called Mxologi Hurricane contained 12% ABV, while the company also featured a mix of Budweiser and tomato cocktail (Chelada), as well as a mojito-flavored Bacardi malt beverage. Chelada targeted Latino drinkers, while Mxologi was still in development, though plans called for Long Island Iced Tea and Pina Colada varieties.

Among new beers, Mintel’s Global New Products Database (GNPD) found premium was the leading positioning claim, though with some health-conscious  introductions focusing on “low-in” claims  (principally calories or sugar) and vitamin-/mineral-fortified products. Mintel’s report “Domestic Beer—U.S.” discovered 44% of U.S. women said they prefer light/low-calorie beer to regular beer, but introductions around the world managed to boost beer’s health quotient with vitamins and minerals. The Philippines saw Iran Behnoush Company release Delster Light Non Alcoholic Beer with vitamins B1, B2, B6 and C, while Mexican consumers could find a “vitamin-rich” Erdinger Weissbräu Non-Alcoholic Beer from NA Products Corp. SA.

Of course, for some consumers, organic goes hand-in-hand with healthy, and the U.S. saw a number of organic beers hit the market. North Coast Brewing released Organic Stout, a full-flavored, Celtic-style stout certified as USDA Organic. Organic Wheat Beer, another USDA Organic-certified beer, from New Belgium Brewing, contained organically grown wheat malt, coriander and orange peel spicing.

A wheat ale from Pyramid Breweries exemplified another notable trend in the segment: added flavors. Apricot Wheat Ale was an unfiltered malt beverage, part of a line including Hefe Weizen (Yeast Wheat Beer); Amber Weizen (Amber Wheat Beer); 1554 English Black Ale; and Heifzen Beer. In Mexico, Het Anger launched Boscoli Cool Fruit Beer, a handmade product from Belgium with “forest fruit essences.” Miller Brewing introduced U.S. audiences to Miller Chill, a 110-calorie beer flavored with lime and salt. The product performed exceptionally well in test markets, with sales to retailers about 40% higher than the company’s goals, The Wall Street Journal reported.

Think of Femme

Health proved central to a hot chocolate introduction targeting women. ConAgra Foods expanded its Swiss Miss line to include functional offerings, noting a survey which found 51% of women looked to fortified foods to get their essential nutrients, while more than a third would like to get these from indulgent foods like chocolate. It found nearly three in four craved chocolate more than any other sweet and consumed caffeine at least once per day. The Swiss Miss expansion sought to meet these intersecting needs. Swiss Miss Pick-me-up cocoa swirls had as much caffeine as a cup of coffee, in addition to the same amount of calcium and vitamin D as a glass of milk, while being enriched with 15 essential vitamins and minerals.

One of the year’s energy drink introductions also had a gender focus. “Formulated especially for women,” Bloom Energy from Del Monte boasted antioxidants, essential nutrients and a full serving of fruit. Speaking about the company’s first foray into the energy drink category, Barry Shepard, senior vice president of marketing and innovation, explained, “Bloom Energy was specifically formulated to meet the lifestyle and nutritional needs of active women who are challenged to achieve a happy balance between work, family and self. Our goal is to provide women with a delicious alternative to the average caffeinated drink, while offering essential ingredients that will energize, refresh and enable women to feel good about what they are drinking.” It delivered 100% of vitamin C and five B vitamins, while also serving as a good source of calcium and vitamin D. Caffeinated with antioxidant-rich white tea extract, each can of Bloom Energy offered a full serving of fruit and 100 calories.

Another major beverage manufacturer is likewise set to implement a female focus in 2008. Coca-Cola and L’Oréal are partnering to create a new health-and-beauty beverage this year. Lumaé is a nutraceutical drink trademarked as a tea-based RTD beverage. Still in development, it is expected to contain skin-nourishing ingredients. Early word has it that Coca-Cola will market and distribute it like a beauty brand more than a soft drink. The company has experimented with similar beverages in Japan, including Love Body, a nutraceutical beverage that claims to burn calories and contains an ingredient rumored to increase bust size.

In 2007 in the U.S., Coca-Cola launched Enviga, a sparkling green tea that claims to burn calories. The beverage was not without its controversy, though: the Center for Science in the Public Interest filed a lawsuit challenging the calorie-burning claims, and Connecticut’s attorney general launched an investigation into the product, as well. Meanwhile, Diet Coke Plus launched, promising a good source of vitamins B3, B6, and B12, and the minerals zinc and magnesium. Also, Minute Maid Active containing glucosamine HCI debuted, to help support healthy joints.

Back to School

Industry findings reported school vending machines had fewer high-calorie soft drinks in the wake of some states banning the sale of sodas on campus and the beverage industry phasing-in healthier drinks. The American Beverage Association found non-diet soda accounted for 32% of the drinks for sale at school during the 2006-2007 school year, down from 47% in 2004. Furthermore, the beverages shipped to schools had about 40% fewer total calories than they did in 2004. When measured in ounces, shipments of beverages overall dropped 27% between 2004 and the 2006-2007 school year. Sugary fruit drinks in school vending machines fell 56.2%, and full-calorie soft drinks were off 45.1%. Bottled water volumes, however, grew 22.8%.

The beverage industry, meanwhile, expanded its list of drinks that could be sold in high school vending machines, The Wall Street Journal reported. The amendment effectively allowed bottlers to include some other, fast-growing products in the mid-calorie range, such as certain iced teas and vitamin-fortified waters, as long as they had fewer than 100 calories per 12oz.

PepsiCo added to its non-carbonated portfolio with a number of new introductions. G2 was Gatorade’s first differentiated beverage since the original thirst quencher, while Propel Invigorating Water was an enhanced water. G2 had 25 calories per 8oz serving and was the company’s largest new product launch since Propel Fit Water. With 20 calories per 8oz serving, Propel Invigorating Water was designed to hydrate and nourish, while being vitamin-enhanced and mildly caffeinated.

Returning to the healthy theme, one company announced an initial effort to “increase the wholesomeness” of its brands. Sunny Delight Beverages Co. test-marketed FruitSimple, a 100% juice smoothie with two full servings of fruit in every 8oz glass. Unilever, meanwhile, launched Promise active SuperShots. The mini-drinks had 2g of cholesterol-lowering natural plant sterols. The fruit- and yogurt-based beverages contained omega-3 and omega-6, while also serving as a good source of vitamin E.

Energy Surge

A Wayne State University study found blood pressure and heart rate levels increased in healthy adults who drank two cans a day of a popular energy drink. The leader of the study noted that, while the increases did not reach dangerous levels in healthy volunteers, the increases could be clinically significant in patients with heart disease or in those who often consume energy drinks. The American Beverage Association responded, “While the amount of caffeine in energy drinks or coffee may cause a slight and temporary increase in blood pressure, it would have no greater effect than walking up a flight of steps.”

Research by the NPD Group finds, not surprisingly, that “an energy boost” is the number one reason for energy drink purchases across all buyer segments, though other reasons varied by age group. Younger consumers cited taste and preference for the energy category, while older purchasers were more apt to need the caffeine, instant energy and an alternative to coffee. As the research explained, energy drink consumption extends across demographics. “You see some outrageous marketing and appeal to the edgy, alternative sports and extreme games kind of crowd,” says David Portalatin, director of industry analysis for The NPD Group, “but the reality is you have people in all demographic segments that are buying energy drinks. You are just as likely to find an open energy drink around an executive conference table in the afternoon as you are down at the skateboard park.”

While energy drink sales may cross demographics, coffee sales remain confined to an older crowd, according to National Coffee Association (NCA) data. It found 37% of young adults (those aged 18-24) drink coffee, compared with 60% of those between 40 and 59, plus 74% of Americans over 60. That said, coffee remained a growing market: between 2001 and 2006, overall coffee consumption rose by 9% a year; however, that growth came from coffee consumed on the go. Between 2001 and 2006, coffee sold at restaurants grew at a compound annual growth rate of 15.2%, according to the NCA. Supermarket brands have seen sales grow much less (slated to grow only 1% through 2011), as consumers turned to brews from foodservice options. Kraft and Procter & Gamble have made efforts to compete with these, principally by offering Starbucks and Dunkin’ Donuts coffee (respectively) in supermarkets.

Datamonitor found sales statistics similar to the NCA, estimating that sales at retail channels accounted for 50% of U.S. coffee sales in 2001, yet had dropped to 34% by the end of 2006. The total market, it says, climbed more than 50% over that period and will, the group predicts, grow another $10 billion to reach $39 billion by 2011, driven mainly by coffee shops.

Daily Double

Another statistic of the NCA may come as a surprise: the days of soft drink dominance have come to an end. For the first time since 1990, the association found, the percentage of U.S. adults who consume a daily cup of coffee exceeded those who drink a soft drink every day. Some 57% of the 3,000 randomly surveyed adults said they drank coffee every day, up from 56% in 2006. Soft drink consumption, however, fell to 51%, down from 57% the year prior. Interestingly, coffee consumers are increasingly turning to regular coffee: 48% said they drink regular coffee daily, up from 47% last year. Gourmet coffee aficionados, however, fell to 14%—from 16% a year ago, but there may be a simple explanation for this decrease. “(The increase) is mostly in regular coffees, not as you might expect in the more gourmet coffee beverages. We believe that this is mostly because of the way consumers are thinking about coffee. There’s this classification that gourmet coffees, to them, are becoming much more mainstream, and they are counting that as regular coffee,” said Bill Gottlieb, a market researcher for Starbucks Corp.

Coffee connoisseurs had another reason to rejoice in 2007, and this centered around positive health news. A Spanish study found coffee contained high levels of soluble dietary fiber, significantly higher than other commonly consumed beverages. The findings meant a daily consumption of one cup of coffee represents a contribution of up to 1.8g of the recommended intake of 20-38g of the nutrient. Furthermore, Japanese researchers found that drinking three or more cups of coffee a day may cut the risk of colon cancer in women by half. Studying data from more than 96,000 women aged 40-69 over a 12-year period, Tokyo’s National Cancer Center found that women who drank three or more cups of coffee a day had half the risk of developing colon cancer, compared with those who drank no coffee at all. This was even after adjusting for other factors, such as diet and exercise. No significant benefit was found in men.

A report from Canaccord Adams indicates the entire non-alcoholic beverage segment is making a shift toward functionality, with consumer interest in health and wellness as a key driver. While traditional soft drinks still account for most of the market, growth and innovation will stem from more alternative segments. As such, functional beverage and ingredient manufacturers will have opportunities, depending on how they align their resources and efforts, Canaccord Adams notes. It estimated the U.S. non-alcoholic beverage market at $100 billion, with carbonated soft drinks accounting for $64.7 billion in sales.
Much of the information in this article was derived from the Mintel Global New Products Database, www.gnpd.com, 312-932-0400.

Going Global

Outside the U.S., a spate of gluten-free introductions could be found among beverages. In India, 2Baggio introduced Baggio Pronto and Light Baggio (multi-fruit and light orange nectars, respectively) which were free of gluten. The former was a blend of banana, orange, pineapple and pear, while the latter contained 40% orange juice and 5% lemon juice. Brazil, meanwhile, saw Indaiá Brasil Aguas Minerais introduce Indaiá Citrus Zero, a grape-flavored drink touted as gluten-free. In the same country, Wow! and Brassumo introduced gluten-free nectars: banana joined the Wow! line, while passion fruit and guava were in the Brassumo stable.

A Belgian cherry beer from Green’s Pilgrim in Finland was missing more than gluten; it also was free of barley and wheat. “Free-from“ claims frequently referred to preservatives, as evidenced by Asahi Soft Drinks’ Hand-picked Ripe Apple Juice in Japan, Carpri Sun’s Mixed Fruit Flavored Juice Drink in Guatemala, Lemon Drink under Coca-Cola’s Minute Maid Limon & Nada brand in Spain and Snapple’s Lemonade Juice Drink in Singapore.

While a number of studies touted the healthy aspects of coffee, a couple of global introductions sought to add extra benefits. Floressance’s Hot Cappuccino Powder Mix in France was enriched with CLA to burn fat, while Nestlé introduced Mexican consumers to Antioxidant Rich Soluble Coffee, boasting twice the antioxidants of green tea.

Energy drinks took a likewise functional approach, with Angel Drink’s Natural Energy Drink in Germany (with guarana “for better concentration“), Silver Bird Complex’s Energy Drink in Malaysia (with vitamin b “to produce healthy blood cells and to aid in stress relieving“) and Frucor Beverages’ Afternoon Wake-Up Call Energy Drink in the Netherlands (with five essential vitamins and guarana).
PHOTOS COURTESY OF MINTEL GNPD

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