Article: Defending Drinks -- March 2009
March 1, 2009
If nothing else, 2008 may go down as the year when everyone could have used a drink. The economy began a severe downturn that has yet to see bottom; foreclosures rose precipitously; and gas and other commodities prices hit all-time highs. At the same time, beverages tried to meet a variety of different objectives--functional, healthy, environmental friendliness, quenching, etc.
According to Gallup’s annual Consumption Habits poll over the summer, beer consumption increased its lead over wine and spirits, reaching a double-digit advantage for the first time since 2002. The poll found 47% of adults 30-49 drink beer most often, with 31% preferring wine. While it has yet to reach the lofty heights of the early 1990s, when nearly half of Americans said it was their alcoholic drink of choice, beer maintained its advantage among younger drinkers, those between 18-24. Overall, 62% of Americans say they drink alcohol, and if researchers at Rice University are successful, they may have a health reason to do so.
The Rice researchers are working to develop a beer to fight cancer and heart disease by genetically modifying a strain of yeast to include resveratrol, the disease-fighting chemical found in red wine. However, gaining public support for a genetically modified product may be the toughest obstacle. Consumers still seem leery of the concept, and a number are looking to more natural options.
Indeed, the natural/organic trend made a strong push into the beer arena, with Butte Creek Brewing introducing Spring Run Organic Pale Ale organic beer and DeProef Brouwerij offering Green’s Discovery All Natural Amber Ale made from millet, rice, buckwheat and sorghum, bringing allergen awareness into the beer cooler by noting it was free of gluten, crustaceans, eggs, fish, peanuts, soybeans, milk, lactose, nuts, celery, mustard, sesame seeds, sulphur dioxide and sulphites. Meanwhile, Peak Organic Brewing Company’s organic beers featured Nut Brown Ale, Pale Ale and Amber Ale. Red Ale from Abita Brewery may not have been organic, but it was an example of beer makers introducing premium items. It was brewed with British pale and crystal malts, Liberty hops and an ale yeast imported from Ireland.
Anheuser-Busch has planned for a number of ales, itself, if its label applications with the Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau are to be believed. Adding to its Michelob stable, the brewer’s application called for Michelob Red Ale, Brown Ale, Dunkel Weisse and Bohemian Pilsner, as it tries to tap into the growth in high-end beers. Its Budweiser American Ale debuted in September as an all-malt, top-fermented ale dry-hopped with Cascade hops from the Pacific Northwest. The company also created Michelob Brewing Co. to encompass its fuller-flavored beers, including Michelob, Michelob Porter and AmberBock.
The argument could be made that Anheuser-Busch is simply trying to fend off the rapidly advancing craft brewer segment, which saw sales grow 12% by volume and 16% in dollars in 2007, and the concept is not solely the province of small companies. MillerCoors owns AC Golden Brewing Co., the brewer’s effort to tap into the craft beer market. Its first small-batch beer, Herman Joseph’s Private Reserve, was a “hand-crafted, German-style lager,” and craft brews are showing strength even in foodservice. The National Restaurant Association surveyed more than 1,000 chefs and found craft and microbrew beer ranked as the sixth-hottest culinary trend of 2008--out of 194 possibilities, including Latin American cuisine and free-range cooking.
Brewers aimed to increase their offerings by expanding their target market, but the incorporation of energy-enhancing ingredients proved quite controversial, a dispute unsettled until early 2009 in one company’s case. In January, MillerCoors reached an agreement with a coalition of state attorneys general to reformulate its energy beer, Sparks, to remove caffeine, ginseng, guarana and taurine. While the agreement found nothing to indicate the brewer engaged in unlawful behavior, it did stipulate that the brewer will not produce caffeinated alcohol beverages in the future. A similar case saw Anheuser-Busch InBev reformulate its Tilt brew to omit caffeine and other ingredients.
Those ingredients, however, were easy to find in energy beverage launches, including a range from one company making its debut in the segment. Ocean Spray introduced Cranergy and claimed it was the first naturally energizing energy drink, containing five B vitamins, vitamin C and green tea extract. Most notable to the consumer was likely its on-pack mention of 50% fewer calories and less sugar per serving than other energy drinks. Also separating it from its energetic competitors was the variety of package sizes: a family-sized, 46oz container and four single-serve plastic bottles.
Further broadening the package sizes for energy drinks, Bev-Rev introduced Liquid Energy Mix In in a 25.4oz vial, with a total of 50 servings. With an ingredients panel listing caffeine, ginkgo biloba, ginseng, guarana and taurine, it was unique in that it claimed to transform a hot or cold beverage into an energy drink with no change to the beverage’s original flavor.
Energy beverages also saw an influx of 2oz bottles, as the energy shot segment continued its growth, which already hit $125 million in sales in 2007. Talon Energy Shot could be found at Circle K convenience stores; Lemon Green Tea Energy Shooter from Bayshore Specialties was a shot, but could also “energize cocktails, flavor or water;” and NOS PowerShot featured caffeine, vitamins (including niacin, B6 and B12) and amino acids in a 2oz size for consumers without “the time or patience to consume a 16oz can or 22oz bottle.”
For that matter, a pair of shot-sized items had a clearly defined target. The 418 Energy Shot from Baywood was an energy drink “especially formulated for golfers:” it contained natural ingredients with an anti-inflammatory (for pain relief) and cognitive support formula. MamaJuana Energy Drink, meanwhile, from Layfield Energy, was “available for men.” Women were not under manufacturers’ radars, either. Nor-Cal Beverage introduced Go Girl Glo Energy Drink with natural flavors, 35 calories and a “light” amount of caffeine. Its ingredients promised to promote healthy skin, heart, body and mind. Bionic Products eliminated calories entirely for its Lady Pink Energy Drinks. Also free of sugar and carbohydrates, the product boasted its taste is suitable “for a lady.” Women, in fact, were the target for one of the year’s most notable beverage introductions.
Technically, Glowelle was a beauty drink dietary supplement, claiming to protect and hydrate the inner and outer layers of the skin. Formulated with a proprietary blend of high-antioxidant vitamins, phytonutrients, and botanical and fruit extracts, the Nestle product was found in ready-to-drink glass bottles, as well as 7- or 30-day powder pack kits. The product, made with real tea, fruit and botanical extracts, was also unique for its distribution, found only at Nieman Marcus and Bergdorf stores and at neimanmarcus.com.
For consumers with a charitable nature, a variety of energy drinks appeared. Live Green Tea Energy Drink, an all-natural, lightly carbonated drink, donated 50% of the profit from every purchase directly to charity: Sugar Free’s proceeds went to breast cancer research, while Açai Berry supported AIDS research, and the original version helped youth programs. Meanwhile, Leading Brands donated 10 cents per can sold of its Die Hard Sports Energy Drink to American veterans. Targeting environmentally aware energy beverage drinkers, The Healthy Beverage Company’s Steaz Diet Energy was not only USDA-certified organic, it also was a fair trade product, but that distinction continued to make its greatest mark elsewhere in the beverage aisle.
JavaPop’s Javaccino Organic Caffe Latte was a ready-to-drink coffee micro-brewed with fair trade organic coffee from Sumatra, the same source as was found in Sumatran Iced Vanilla Café Latte in Canada. The latter was part of a line comprising such varieties as Mayan Iced Café Mocha, Indian Iced Chai Latte and Ethiopian Iced Espresso, all certified organic, an area that has seen strong growth in recent years.
In 2007, the North American organic coffee market surpassed $1 billion, according to the Organic Trade Association, as the amount of organic coffee imported into the U.S. and Canada increased 29% from the prior year and grew to represent 3% of the total U.S. green coffee imports. Consumers clearly are embracing gourmet coffees, and varieties are brewing even at McDonald’s. However, a champion of the concept has had a struggling year.
Starbucks’ profits have slipped, and, in January, the company announced another series of job cuts (6,000) and store closings (another 100 on top of the 600 announced in 2008). An increasing number of consumers simply are looking to get their coffee fix elsewhere, be it from foodservice or, increasingly, from RTD coffees at retail. Community Coffee introduced Mochasippi, which it termed a premium RTD coffee, while Havana Cappuccino introduced a mocha variety to its line.
Coffee lovers received additional good news courtesy of a pair of studies. Seoul National University researchers proved just the aroma of freshly brewed coffee can help relieve stress, while according to researchers from Lund University and Malmo University in Sweden, drinking at least 2-3 cups of coffee a day may reduce a woman’s risk of developing breast cancer or delay the onset of cancer. In addition, three or more cups of coffee per day may also reduce the risk of ovarian cancer by over 20%, per research from Harvard Medical School and the Harvard School of Public Health. Bene-fits were more pronounced for postmenopausal women and younger counterparts who had never used oral contraceptives.
A manufacturer known for its healthy products entered the coffee arena, as POM Wonderful introduced POMx Iced Coffee in two flavors: Café au Lait and Chocolate. Featuring “a potent dose of caffeine (175mg) and antioxidants,” the product promised to be a “sophisticated energy drink” and did not include or taste of pomegranate juice. While a company best known for juices introduced a coffee product, a coffee giant expanded its focus: Starbucks unveiled a smoothie-like beverage made with fresh fruit and whey powder, plus an entry into the energy beverage category, Starbucks DoubleShot with energy, also leveraging the assets of its relationship with PepsiCo.
For its part, PepsiCo expanded its target, as well. The company introduced Mountain Dew Voltage, a carbonated soft drink with a raspberry citrus flavor and ginseng, but it made clear an intent to refocus on its soft drink base.
Under multi-year plans announced in 2008, PepsiCo will add new graphics and logos to its cans of Pepsi, Mountain Dew and Sierra Mist, while at the same time revamping its marketing campaign. Elsewhere in its portfolio, the company added five new flavors to its SoBe Life Water line: blackberry grape, pomegranate cherry, orange tangerine, strawberry kiwi and passionfruit citrus. Joining the enhanced water segment, all five were infused with a mix of antioxidant vitamins C and E, essential B vitamins and herbal ingredients.
PepsiCo also planned to position its Mountain Dew Amp Energy as one of its “mega-brands,” launching three line extensions: Amp Relaunch, which promised to hydrate consumers with an added mix of electrolytes and B vitamins, Amp Elevate to boost drinkers’ mental capacity with L-Theanine and Amp Traction to offer sustained energy.
Looking ahead, perhaps the biggest news for soft drink (and potentially all beverage) introductions in 2009 actually stemmed from an FDA move late in 2008. The agency finally gave GRAS approval to Rebaudioside A sweetener, and soft drink makers were quick to announce products featuring the ingredient. PepsiCo had already announced plans to use the sweetener in flavors of SoBe Lifewater (which it had previously premiered elsewhere in the world) and in Trop50, a reduced-calorie orange juice product. The sweetener, derived from the stevia plant, will also appear in Coca-Cola’s Sprite Green and two additional flavors of its Odwalla health drinks. Perhaps the most interesting news surrounding Coca-Cola, however, stemmed from a patent application the company filed. In a concept which appears to be a dessert-on-the-go, the filing described a number of beverages featuring rice extracts or derivatives to thicken the beverage and give it a mouthfeel akin to cream or custard.
Needless to say, the troubled economy has affected sales across the food aisles, and beverages are no exception. However, despite a 2.1% drop in U.S. soft drink production in 2009, this following a 1.5% decline in 2008, IBIS World does expect the U.S. beverage market to rebound 1.6% in 2010. Around the world, the analyst predicts global product of soft drinks and bottled water will fare even better, with positive year-over-year sales growth from now at least through 2013. Sales in 2009 are predicted to jump 1.7%, to $159.9 billion. Such growth globally will likely push major manufacturers even further into foreign markets, as Coca-Cola already has planned with its purchase of Hong Kong’s China Huiyuan Juice Group and PepsiCo’s investment in Russian juice company JSC Lebedyansky. With efforts like a New York proposal to tax sugared beverages by 18%, which proponents contend would cut consumption by 5%, overseas may prove a more profitable target market for beverage developers. pf
Much of the information in this article was derived from the Mintel Global New Products Database, www.gnpd.com , 312-932-0400.
www.gnpd.com -- Mintel Global New Products Database
http://news.bbc.co.uk/go/pr/fr/-/2/hi/health/7405566.stm -- Juice prevents clogged arteries
www.gsm.ucdavis.edu/2008winestudy -- Wine executives and wine professionals’ surveys
www.teareport.com -- The Tea Report
Going Global: Beverages
BEVERAGE INTRODUCTIONS AROUND THE GLOBE MADE USE OF ALTERNATIVE SWEETENERS IN 2008, ALL ENDEAVORING TO REDUCE OR ELIMINATE SUGAR. GERMAN CONSUMERS SAW FRANKEN BRUNNEN INTRODUCE APPLE-PEAR SPRITZER WITH NO ADDED SUGAR, WHILE COCA-COLA ADDED FANTA ZERO SUGAR-FREE SOFT DRINK IN SPAIN. KIRIN RELEASED SUGAR-FREE KIRIN NUDA SPARKLING DRINK IN HONG KONG, AND F&N FOODS LAUNCHED SARSI LIGHT DRINK, A SUGAR-FREE BEVERAGE WITH NO CALORIES, IN SINGAPORE.
ALSO FEATURING NO SUGAR OR CALORIES WAS DISTREBEBIDAS’ INTRODUCTION OF BEBIDA DIETÉTICA GASIFICADA SABOR FRUTAS TROPICALES TO ARGENTINA. THIS PRODUCT HAD AN EVEN BROADER RANGE THAN SOLELY THE FREE-FROM TREND, HOWEVER, AS PROCEEDS FROM THE SALES OF THE PRODUCT CONTRIBUTED TO THE WORK OF FAVALORO FOUNDATION, A HEALTH INSTITUTION IN LATIN AMERICA.
LIKEWISE STAKING A CLAIM TO THE “GREATER GOOD” TREND, UBUNTU RELEASED WHAT IT CALLS THE ONLY FAIR TRADE COLA IN THE WORLD. INTRODUCED IN NORWAY, THE PRODUCT FEATURES FAIR TRADE-LABELED SUGAR, AND ITS SALES PROFITS ARE DISTRIBUTED TO DEVELOPMENT PROJECTS IN AFRICA.
THE U.K. SAW AN INTRODUCTION WITH SIMILARLY CHARITABLE GOALS. DUCHY ORIGINALS’ ORGANIC EFFERVESCENT JUICE DRINK RANGE DONATED TO THE PRINCE OF WALES CHARITABLE FOUNDATION BUT MAY BE BETTER REMEMBERED FOR ITS INTERESTING INGREDIENTS, INCLUDING HAND-PICKED ELDERFLOWER, LYCHEE AND HONEY; ORGANIC SICILIAN LEMONS; ORGANIC APPLE; AND ORGANIC GINGER. WHILE THE INGREDIENT SOURCE TREND HAS YET TO MAKE MUCH HEADWAY IN BEVERAGES, ONE INTRODUCTION IN JAPAN DID MAKE AN EFFORT. COCA-COLA’S EMERALD MOUNTAIN WAS A RTD COFFEE MADE WITH EXTREMELY RARE BEANS GROWN IN THE ANDES HIGHLANDS, 1,600 METERS ABOVE SEA LEVEL.
FOR INTERESTING INGREDIENTS, HOWEVER, THE FAR EAST NEVER FAILS TO OFFER PRIME EXAMPLES OF WHAT WESTERNERS MIGHT REGARD AS UNUSUAL. FOR INSTANCE, YOUNG DEER ANTLERS WERE INCORPORATED INTO AN ENERGY DRINK FROM TSUMURA & CO. IN JAPAN. A MINI-SIZED ENERGY DRINK, HAIKUTAN D PLUS ALSO ADDED BEZOAR BOVIS, GINSENG PANAX, EPIMEDIUM SAGITTATUM AND OTHER HERBS IN A PRODUCT DESIGNED TO HELP ALLEVIATE FATIGUE, BUT IT ADDITIONALLY CLAIMED TO BE “BENEFICIAL FOR DIGESTIVE AND NUTRITIONAL DIFFICULTIES, TEMPERATURES AND FEVERS.”
FOR JAPANESE CONSUMERS WITH MORE SELF-INDUCED AILMENTS, LOTTE LAUNCHED DRINKING FRIEND. DEVELOPED IN COLLABORATION WITH ZERIA PHARMACEUTICAL CO., THE PRODUCT MIXING CURCUMIN, GABA, RUBUS EXTRACT AND CHAMPIGNON EXTRACT TARGETED “BUSINESSMEN IN THEIR 30S TO REMAIN WELL AND ACTIVE EVEN AFTER A NIGHT OF DRINKING.”
BUSY JAPANESE WERE ALSO THE TARGET FOR ASAHI’S BEVERAGE WITH AN UNUSUAL NAME. ONE-DAY FIVE VITAMIN QUICK SUPPLY WAS AN ORANGE-FLAVORED, LOW-CALORIE BEVERAGE WITH FIVE VITAMINS FOR “BUSY MODERN INDIVIDUALS WHO FIND IT DIFFICULT TO KEEP TAKING SUPPLEMENTS.” IT TARGETED HEALTH-CONSCIOUS CONSUMERS IN THEIR 20S-50S.