Cold Drinks Are "Hot"
Benefiting from a number of studies, coffee and tea introductions, not to mention sales, surged in 2012.
Consumers found an array of new beverages on shelves in 2012, with promises of health, an energy boost and even help with weight loss.
Coffee and tea have grown exponentially in recent years, and researchers expect that momentum to continue. A Markets and Markets report estimates ready-to-drink (RTD) tea and coffee market sales reached $69 billion during 2011. The firm predicts segment sales will reach $125 billion by 2017, while it grows at an estimated compound annual growth rate of 10.9% from 2012-2017. Although Asia-Pacific may be the largest market, study authors believe North American demand for RTD coffee, in particular, will rise “due to an increase in health awareness and ill effects of carbonated drinks.”
That sentiment echoed an NPD Group survey, which found 18- to 24-year-olds turning away from caffeinated sodas and turning to coffee as their energy-boost beverage of choice. In 2002, 25% of the 18-24 demographic reported drinking coffee at some point within a two-week period. In 2012, the percentage drinking coffee within that same time-frame jumped to 39%. Studies linking the beverage to a range of positive health benefits could be one of the supporting factors.
Tea sales also are rising, along with the number of studies purporting its healthy benefits. Mintel International forecasts global tea sales will grow 50% between 2011-2017, with tea experiencing 5% growth in the foodservice sector and 10% growth in retail during the next five years.
IBISWorld estimates similar tea growth in coming years but does warn that uncertainty abroad could impact sales globally. However, the “emphasis on healthy living is changing consumer dietary patterns, helping to drive the industry’s growth,” according to IBISWorld.
In addition, the tea segment has successfully diversified into many different flavors and varieties. For example, Inko’s LLC was well established in the low- and no-calorie, ready-to-drink white tea segment. Last year, the company made its first foray into non-white tea varietals with Mango Passion Fruit Rooibos Tea, Citrus Black Currant Oolong Tea and Half and Half Green Tea with Lemonade. In conjunction, Inko’s likewise broke new ground in its product packaging: Its new offerings come in 15.5oz recyclable aluminum cans.
Inko’s green tea option also could benefit from research out of Vanderbilt-Ingram Cancer Center, which found green tea can help decrease the rate of some digestive system cancers, particularly cancers of the esophagus/stomach and colorectum. The risk for all digestive system cancers combined was reduced by 27% among women who had regularly consumed green tea for at least 20 years. Similarly, long-term tea consumption patterns could help prevent ovarian cancer. A two-year study of 1,000 women and published in the journal Cancer Epidemiology discovered that the women without cancer were more likely to be tea drinkers from an earlier age than those diagnosed with the disease.
New tea introductions in 2012 included a number of varieties attempting to take health a step further with functional attributes. Zhena’s Gypsy Tea added five functional teas: Renew Me (a cranberry ginger tea for detoxification); Relieve Me (an herbal laxative tea with an apple cinnamon flavor); Calm Me (a sleep-aiding tea with a coconut vanilla); Slim Me (a raspberry mint flavored tea positioned as a diet aid); and Soothe Me (honey, lemon and ginger tea promising throat and cold relief).
Company founder Zhena Muzyka explained, “When we looked at the current medicinal tea category, we discovered a gaping hole in flavored teas with serious function. We took truly effective herbal formulas and added delectable flavor profiles to them.”
Zhena’s also added three fair trade chai concentrates: Classic Chai Tea Latte, Caramel Chai Tea Latte and Coconut Chai Tea Latte. The blends include an infusion of organic fair trade-certified black tea and water, cane sugar, honey, organic agave nectar, vanilla, spices, natural flavor and citric acid.
A new take on chai also debuted from Tea India, a consumer brand of Harris Tea Co. Tea India Chai Moments are instant tea mixes intended for on-the-go consumption. Three new flavors include Masala, Cardamom and Ginger. Found in South Asian markets in the U.S., Chai Moments promise the “authenticity of Indian chai flavors with natural spices and no preservatives.”
When it comes to beverages that consumers perceive as natural, few entries can match juices. Nevertheless, the juice segment has faced a challenge regarding public concerns about sugar. Combating this issue head on, Honest Tea reformulated its Honest Kids fruit-juice-sweetened line of beverages in 2012. In doing so, the company updated all five varieties, removed the organic cane sugar and increased the juice content. Line offerings now contain between 30-42% juice, an increase of 12-26%, depending on the variety. The calories remained the same: 40 per 6.75oz pouch.
In expanding its V8 line of vegetable juices, Campbell Soup Co. went for a bolder flavor approach, adding such varieties as a Hint of Lime and a Hint of Black Pepper. As with V8’s other 100% vegetable juices, each new item promises two full servings of vegetables in each 8oz glass.
Complex Beverage LLC leverages a vegetable some may not have expected. The company’s new Lettuce Tea brand features an extract of lettuce, praised by some health professionals as an outside-the-box approach to a vitamin-enhanced beverage, with research pointing to its role in metabolism reinforcement and enhanced immune system strength. The company claims the drink—available in Peach Mango, Strawberry Banana and Exotic Apricot flavors—is the only all-natural, low-sugar, low-calorie functional tea beverage endowed with lettuce extract attributes and vitamins.
Lettuce Tea is not the only product promising natural flavors, however. Coca-Cola’s Fuze brand expanded with a new line of iced teas and juice drinks. The bottled teas contain blended natural flavors, and they promise to be a good source of vitamins B6 and B12.
“Fuze taps into consumers’ desire for great-tasting refreshment, appealing to both Millennials (ages 18-34) and the fast-growing multicultural population segment,” noted Bill Medbery, director, strategy and development, Coca-Cola Refreshments. Medbery cited Harrison Group, RTD Tea Segmentation data.
One of Coca-Cola’s more interesting new products debuted overseas. Coca-Cola joined French drug manufacturer Sanofi to develop and launch Beautific Oenobiol, a line of “beauty drinks” to assist with weight loss and provide other health benefits. Last October, the Wall Street Journal reported that the four Oenobiol drinks are made with mineral water, fruit juice and nutrition additives. The products carry claims that they will “help strengthen hair and nails, embellish skin, lose weight and improve vitality.”
Stateside, the company announced another foray into the mid-calorie soda segment. Testing last summer were Sprite Select and Fanta Select, each made with a blend of sugar and other sweeteners, including a stevia variety and erythritol. Each had 70 calories per 12oz can, compared with 140 and 160 calories in regular Sprite and Fanta, respectively.
The mid-calorie soft drink market has suddenly become a crowded arena. Building on last year’s successful launch of Dr Pepper 10 with 10 calories (per 12oz serving), the Dr Pepper Snapple Group came back this January with similar new versions of 7Up, A&W, Sunkist, Canada Dry and RC. The company notes about 30% of its sales are from diet and lower-calorie sodas and “better-for-you” beverages, such as juices and water. Company CEO Larry Young told The Huffington Post in December 2012 that he sees the better-for-you portion of the business accounting for 40-50% of sales in coming years.
Those sales may not necessarily be coming from adults attempting to lose weight. A new study—using federal health data—reports more children in the U.S. are drinking diet drinks, with some 12.5% drinking artificially sweetened beverages in 2008 vs. 6% in 1998. A separate report from the Centers for Disease Control and Prevention, “Consumption of Diet Drinks in the United States, 2009-2010,” found about 20% of the U.S. population consumed a diet drink on any given day in 2009-2010, with 11% consuming 16oz or more.
Diet Pepsi lovers may notice a slight alteration in coming months, as the company quietly altered its sweetener. The drink now features a mix of two artificial sweeteners, aspartame and, per a company statement, “a very small amount” of acesulfame potassium, “to ensure consistency with every sip.” In Japan, Pepsi added a beverage the government termed a “food for specified health uses.” Pepsi Special boasts a dextrin promising to help block fat by impairing absorption.
More functional beverages could boost heart function in healthy consumers, an Italian study found. Per the University of Siena research, one hour after subjects consumed an energy drink containing caffeine and taurine, function in the left and right ventricles increased, and diastolic blood pressure rose 6%, while the heart rate and systolic blood pressure rise was “not statistically significant.”
Power of Energy Drinks
As if the energy drink market needed any kind of a boost, its global sales grew 14% in 2011 to reach $41.5 billion and an 8.7% share of the $498 billion global soft drinks industry, according to Bloomberg Industries analysis.
Energy-X added an energy supplement mixer, The Juice, to its line. The Juice promises a neutral taste that’s suitable for juices, sodas, sports drinks, water, cocktails or even oatmeal. Interestingly, caffeine in the mix comes from green coffee beans, and the product bears a warning: “Do not consume more than four shots during any 24-hour period,” as consumer concern about over-imbibing energy drinks has risen.
Nurish Brands Inc. tagged its new sparkling energy beverage, Feel Natural Energy, with the description “Feel Good. Do More.” Each 10.5oz can of the lightly carbonated, naturally sweetened energy drink has 15 calories and a day’s worth of vitamin C, plus calcium and vitamin D, as well as 85mg of naturally occurring caffeine. Elsewhere, new Next10 Energy, from the company of the same name, says it reflects the efforts of a neurosurgeon looking to enhance focus and concentration, promising “healthy levels of B6.”
Pulse Beverage Corp. positions its “good-for-you” premium lemonades as all-natural options. In 2012, Pulse added Blueberry Lemonade to the Cabana 100% Natural Lemonade line, all made without artificial sweeteners or coloring. Blue Diamond Growers, meanwhile, added its own beverages promising health and wellness benefits. New Almond Breeze debuted in 11oz, reclosable aseptic packages to offer almond milk in three flavors: original, original unsweetened and vanilla unsweetened.
In the U.S., Pepsi’s efforts outside of the diet arena proved flavorful, as it added a Strawberry Kiwi Splash variety of Sierra Mist Natural, made with real sugar and no artificial additives or preservatives. Meanwhile, over last summer, the company tested a malt-flavored version of its Mountain Dew soda. Mountain Dew Johnson City Gold promised a malt flavor with a kick of lemon-lime. Interestingly, it was named for the Tennessee birthplace of the original Mountain Dew citrus-flavored soda, and the name does suggest something of a “craft” approach that has permeated recent beer introductions.
Adult Drinks Freeze
In the alcoholic beverages arena, beer continues its run as the largest segment of the U.S. adult beverage industry. It accounts for more than four fifths of total alcohol volume, explained Technomic’s “2012 BeerTAB (Trends in Adult Beverage)” report. However, beer did see a 1.3% decline in 2011, a result of challenges both on the economic and simple consumer trends fronts.
“The beer consumer is really at the heart of the trends shaping the beer market,” said Donna Hood Crecca, senior director, Adult Beverage Resource Group at Technomic. “The core consumers for the major domestic brands were among those most impacted by the recession, so their spending habits changed. At the same time, taste preferences evolved, especially among younger consumers, and we saw beer drinkers increasingly seeking different styles and more complex or varied flavor profiles. Both trends affected the powerhouse categories and brands, which resulted in the overall decline.”
Craft beer did manage 11.2% growth, to account for 5.5% of total beer volume, benefitting from consumer interest in artisan and local products featuring unique styles and flavor profiles. Additionally, according to Technomic, the number of microbreweries and craft brewers increased by nearly 200 facilities.
Among the large beer marketers, Anheuser-Busch InBev and MillerCoors LLC managed to account for nearly three quarters of beer volume, Technomic found, with each tapping into emerging segments through brand extensions and by diversifying their portfolios.
Anheuser-Busch InBev debuted during the 2013 Super Bowl. Budweiser Black Crown was developed to be more flavorful and have a higher alcohol content, to appeal to a younger generation, and the marketing efforts will target 21- to 34-year-old beer drinkers. It marks the company’s second consecutive launch tied to the National Football League’s championship; 2012 saw it as the launchpad for Bud Light Platinum, a beer with fewer calories than Budweiser (137 vs. 145, while Bud Light has 110), but a higher alcohol content: 6% compared to the 5% in Budweiser and 4.2% in Bud Light.
MillerCoors followed suit and advertised the national launch of Redd’s Apple Ale during the big game in select markets. The beverage is meant to compete in the flavored malt beverage arena against the likes of Mike’s Hard Lemonade and Twisted Tea, but it differentiates itself by being a sweet alcoholic beverage that is brewed like an ale. It actually debuted in 10 Southeastern states during the summer but was scheduled to launch nationally on February 1st.
Elsewhere in the alcoholic beverage sector, there’s a new packaging trend most often associated with infant foods. Squeezable alcohol pouches saw their sales jump 153% in the year ending June 23, rising to $154 million, according to Nielsen. Last summer, Diageo began national distribution of Parrot Bay and Smirnoff brands of pouches, containing fruity malt-beverage drinks meant to be frozen and squeezed into a glass or cup. Each single-serve, 10oz pouch has a suggested price of $1.99.
Phusion Projects, known for its Four Loko energy drinks, added a pouched malt beverage brand, Island Squeeze. Likewise, Constellation Brands introduced frozen wine cocktails in pouches under its Arbor Mist wine-with-fruit brand and, later in the year, augmented the line with a Moscato varietal. A similar concept appeared from Fruitflavorz, which launched frozen cocktail pops in coconut, mango and peach flavors. Each of these ice pops contains a mixture of vodka and 15% alcohol by volume.
Vodka of the non-frozen variety also saw some flavor enhancement in 2012. Stolichnaya Premium Vodka followed its success with Stoli Chocolat Razberi and introduced Stoli Salted Karamel, which officials claim is the world’s first salted caramel-flavored vodka. The new variety, the company promises, balances the flavor of sweet caramelized sugar and soft English toffee with a light saltiness.
Purus Vodka likewise embraced flavor, but for its super-premium spirit Pomacai, the company took inspiration from the superfruits pomegranate and açai for a beverage with 35% alcohol by volume. It joined a rapidly growing flavored vodka segment, one up 17.5% in 2012, with pomegranate-flavored vodkas growing 254% as opposed to the previous year, according to “Nielsen Vodka Landscape, 2011.”