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    Features

    Beverage Trends: Refreshing Formulas for Health-Conscious Consumers

    Companies have been challenged to cut sugar while still delivering flavor and function.

    Beverage Trends: Refreshing Formulas for Health-Conscious Consumers
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    By Sean Moloughney, Editor06.01.18
    Sales of sugar-laden soft drinks and juices have been on the decline in recent years, while fortified waters and novel, zero-calorie options like LaCroix Sparkling Water have gained a strong niche following. As more people monitor and cut back on their sugar intake, companies have been challenged to adapt and deliver beverage formulations that meet a range of expectations, including clean labels, real health benefits, and unique flavors.

    According to Innova Market Insights, as a percentage of new ready-to-drink (RTD) product launches tracked from 2013 to 2017, functional claims have been on the rise, reaching one quarter of total RTD products in 2017.

    Dairy is a key platform for functional RTD products, according to Innova. Beside energy and sports drinks, dairy is the top category for functional claims. More than half of drinkable yogurt/fermented beverages and dairy alternative drinks featured health claims in 2017. Moreover, milk and milk drinks featuring functional claims showed significant growth in market penetration.

    Natural caffeine derived from plants has also garnered a strong following. Globally, of new energy drink launches tracked, green coffee has grown 2%, from 2.3% in 2015 to 4.3% in 2016, while green tea has grown 4.4%, from 7.8% to 12.2% during the same time period.

    Consumers are also increasing their intake of ingredients they consider to be healthy, like protein and probiotics, and are looking for drink options that align with their lifestyles.

    In terms of claims, immune health was the fastest-growing functional claim among soft drinks, growing 3% from 2013 to 2017, according to Innova data. Energy was still the top claim overall with 30.7%, followed by antioxidants (26.1%), vitamin/mineral fortified (24%), immune health (10.7%), and digestive/gut health (11%).

    Vitamin C has been the top vitamin ingredient in functional RTD products, seen in 27.4% of total launches tracked, followed by vitamin A and vitamin B12. Meanwhile, vitamin D is the fastest-growing vitamin ingredient, growing 5% in terms of market penetration from 2013 to 2017.

    Clean Living
    With a recent wave of healthy living, consumer choice has shifted from personal preference to personal health, according to Jayesh Chaudhari, MS, CNS, senior director of R&D solutions, Prinova USA, Carol Stream, IL. “To meet redefined nutritional choices, global brands continue broadening their beverage portfolio, offering a variety of great-tasting drinks conveniently packaged to meet busy lifestyle needs, such as juices, meal replacement drinks (e.g., dairy-and plant-based proteins), performance drinks (e.g., energy drinks, enhanced water, sports drinks) and refreshment drinks (e.g., tea and coffee).”

    Product development has continued to evolve, he continued, with innovative beverage options offering value-added nutrients with improved sensory profiles. “At Prinova, we have observed increasing demand for clean label beverages, using all-natural and organic ingredients. More and more drinks are launched with enhanced nutritional value.”

    Modern consumers expect this added value from beverage options, he noted. For example, consumers want a great tasting product that also offers an attractive nutritional profile. “A category of shelf-stable, personalized nutritional drinks made with organic ingredients, no added sugar or trans-fat, and gluten-free is expected to continue to expand in the years to come,” said Mr. Chaudhari.

    Afrouz Naeini, senior marketing manager, Sweetness & Beverage, Ingredion Incorporated, Westchester, IL, agreed that clean label has been a driving factor in the beverage market.

    Earlier this year, Ingredion completed a survey of more than 1,000 consumers in the U.S. and Canada to understand which beverage subcategories people most associate with being clean label—which ingredients drive interest, disinterest, or have no impact on purchase intent—and to understand the underlying rationale driving perceptions of key ingredients, she explained.

    “The majority of consumers in the study viewed beverage subcategories as being somewhat or very clean. That said, alternative dairy drinks were seen as being slightly more clean than other beverage subcategories,” Ms. Naeini noted.

    Across the board, “clean label” was defined as being simple/minimalistic and free of artificial ingredients, she continued. “Low/reduced sugar and no artificial ingredients were critical attributes across the subcategories. Beyond those, added proteins/vitamins were important with sports nutrition drinks, low calories were important with RTD coffee, and non-GMO was important with alternative dairy drinks. Additionally, across the subcategories, ‘no artificial ingredients’ was clearly the most compelling claim.”

    Delivering Functionality
    An overall trend toward natural, plant-based products has been driving the beverage market overall, according to Andrew Wheeler, corporate director of marketing, FutureCeuticals, Momence, IL, “and this crosses into enhanced energy—from sports drinks and cold brew coffee and teas to sparkling and infused waters and juices.”

    “Energy is driving so much these days, and natural energy is out in front,” he continued. “Organic, natural caffeine and ingredients that drive endogenous energy efficiency are an ever-growing segment that is looking to overtake the entire category, in my opinion. Not just in healthy beverages, but in the entire mass market as well, consumers demand sustainable products, and they want to know where their ingredients come from too.”

    Enhanced hydration, nutrient replenishment, probiotics, immune support, and digestive wellness are also appealing to consumers, Mr. Wheeler noted. Nootropics, compounds that enhance cognitive function, seem to be gaining ground as well, but ingredients must have strong clinical substantiation. “Consumers want improved sleep, stress reduction, and better focus as part of their daily lives, and there’s no room in this space for pretenders. The gold standard is human clinical functionality.”

    In addition to water, coffee and tea are the most widely consumed drinks around the world, noted Prinova’s Mr. Chaudhari. Consumers are demanding natural alternatives that offer sustainable energy without the crash. “Subsequently, we see increased demand for fortified cold-brew coffee with vitamins, MCTs, and added natural caffeine (guarana and panax ginseng) to provide additional health benefits, such as ketogenesis to support the burning of fat and boosting energy. Overall, fortified and natural drinks with high nutritional value are in high demand amongst the millennial population.”

    Philip Caputo, marketing and consumer insights manager, Virginia Dare, Brooklyn, NY, said consumers are interested in products that align with specific lifestyles and health needs.
    “Active consumers (e.g., bodybuilders, athletes, fitness enthusiasts) typically look for protein, muscle-building, recovery, and sustained energy support. Wellness consumers (e.g., flexitarians, vegetarians/vegans, weight-conscious people) are often more complex and want long-term and comprehensive health benefits from natural, convenient products.”

    Generally, top health concerns consumers are looking to target include weight management, cardiovascular health, digestion and gut health, cognitive health (e.g., memory, focus, alertness), bone and joint health, immune health, and antioxidant support, he said.

    With regard to ingredients and fortification, beverage brands are going beyond traditional greens to include herbs and spices such as ginger, turmeric, basil, fennel, cayenne, paprika, and rosemary into formulations, said Mr. Caputo. Examples of trending and up-and-coming beverage ingredients include ginseng, raw honey, yerba mate, green coffee bean, ginkgo biloba, artichoke extract, tyrosine extract, y-aminobutyric acid, L-theanine, electrolytes, B vitamins, vitamin D, green coffee bean, green tea, maqui berry, and probiotics.

    Mr. Caputo said he expects there will be a shift from “over-exaggerated claims” and singularly functional products (that feature just protein, for example) to healthy beverages that provide well-rounded, balanced nutrition with multiple functional benefits. “Sustainable energy, raw bioavailable vitamins and minerals, cell oxidation support, probiotics, full ‘greens’ or vegetable serving formats, age/gender/lifestyle targeted products, and products that help prevent or combat specific ailments or health conditions are some examples.”

    Stephanie Lynch, vice president of sales, marketing, and technology, International Dehydrated Foods (IDF), Springfield, MO, said gut health continues to be a significant area of focus for consumers and brands, with more people making the connection with overall wellness. “For example, the increasing popularity of dairy alternatives can be tied to an increase in people looking to avoid digestive upset due to a reduced ability to digest lactose. Additionally, protein continues to be a key ingredient in healthy beverages. Specifically, collagen protein is gaining traction, with consumers interested in its benefits for hair, skin, nails, and more.”

    IDF’s branded SIP bone broth protein hits on several major trends, she said. “It contains nine grams of protein per serving and is rich in type II collagen. Bone broth has been associated with gut health, joint health, and mobility. SIP is also paleo- and keto-diet friendly and allergen-free.” It’s available as a frozen concentrate, dehydrated protein powder, and new shelf-stable concentrate, allowing formulators to add it to beverages, protein supplements, and broths, as well as bars, pastas, and more, she said. An all-natural chicken product, SIP is also low in sodium, rich in electrolytes, and offers a 2:1 potassium to sodium ratio, which promotes recovery and rehydration, according to the company.

    Generally, consumers have become more focused on  their health and wellness, said Mr. Chaudhari. “Consumers desire great tasting functional beverages with value-added nutrients to achieve key health benefits such as performance, cognition, delayed aging, and overall wellness. Consumers make educated choices for buying RTDs with added value. Therefore, scientists continuously develop innovative drinks to offer an exceptional experience by providing positive energy, hydration, and endurance.”

    Throughout their lifespan people are pursuing fit and active lifestyles, he said. Consumers want to build lean muscle mass, burn fat, and improve overall performance. “Hence, drinks loaded with only basic vitamins and minerals fail to satisfy mainstream consumers. Scientist have started using full spectrum nutrients (e.g., vitamins and minerals, nutraceuticals, herbs, botanicals) to catch active people’s attention. Additionally, blends of healthy ingredients, such as good fats (MCT for ketogenesis), complex carbs (fiber for sustained release energy) and complete protein (for muscle metabolism) have become a primary focus for formulation scientists.”

    Though they lack some essential amino acids, plant-based proteins have been gaining in popularity, said Mr. Chaudhari. “Combinations of different plant proteins (e.g., chia, soy, pea, brown rice, sacha inchi, and hemp) offer a modest approach to quenching sensory and nutritional requirements. Demand for vegan and organic proteins are expected to grow significantly.”

    Use of super food ingredients (like acai, resveratrol, pomegranate, mangosteen, and matcha), as well as green veggies and seeds (e.g., chia, flax, sunflower, watermelon) are expected to increase for high-end drinks, according to said Mr. Chaudhari. “Use of antioxidants (e.g., astaxanthin, beta-carotene, mixed tocopherols, vitamin C, L-glutathione, and alpha lipoic acid) for drink fortification may continue to excel due to their chelating effect on free radicals.”

    Water fortified with cannabidiol (CBD) from hemp may become a next-generation drink because of its potential anti-inflammatory and stress relief properties, Mr. Chaudhari added. “Recently, beverages fortified with bone broth are also getting traction. Additionally, health-conscious consumers are driving demand for fermented drinks, due to their gut health and immune support benefits. At Prinova, we see an increased demand for formulations containing basic vitamins and minerals, with plant proteins and nutraceuticals for meal replacement and performance drinks.”

    Slashing Sugar
    According to Euromonitor International’s “Health and Wellness in the US” report (2017), in the context of rising obesity rates, diabetes, and heart disease, sugar has become public enemy number one. “The sweetener was the focus of many scathing media reports in 2016, including a 50-year-old scandal in which the industry paid scientists to point blame elsewhere. At the same time, public policy took aim at sugar as well, with a series of local taxes on sugary beverages and new FDA nutrition fact labels that feature sugar content.”

    In this environment, beverage manufacturers have invested in unsweetened products such as bottled water or iced tea, and companies are generally trying to reduce the added sugar content in formulations before new FDA labels take effect. “The ability of companies to deal with the negative press surrounding the added sugar in their products will be a key competitive advantage,” according to Euromonitor.

    Ingredion’s Ms. Naeini agreed that regulatory changes and taxes on sugary drinks have been compelling companies to make greater strides in sugar reduction. “The addition of ‘added sugar’ to the new nutritional fact tables in the U.S. will shed more light on the sugar content of beverages.”

    Reportedly, she added, 84% of consumers are limiting the amount of sugar in their diet due to health and wellness concerns. As a category, beverages lead the way in terms of new product launches that contain stevia sweeteners.

    Reducing sugar without negatively impacting the taste profile of the beverage product has been a key challenge for formulators, said Ms. Naeini. “Ingredion has partnered with SweeGen, Inc., a nature-based sweetener company, to commercialize the next-generation stevia sweetener, BESTEVIA Reb M stevia leaf sweetener.”

    BESTEVIA is made from 95% pure Reb M that is produced from the leaf of the stevia plant. Reb M offers low to no bitter aftertaste and higher sweetness compared to Reb A, said Ms. Naeini, offering beverage developers the opportunity to meet their sugar reduction targets without compromising product taste.

    Additionally, Ingredion will be introducing a new line of stevia sweeteners  at IFT2018, ENLITEN Fusion stevia sweeteners, which are “designed by identifying synergies and combining the best attributes of multiple steviol glycosides. Covering a range of sweetness levels, ENLITEN Fusion stevia sweeteners provide formulators cost-optimized stevia solutions that are designed for targeted usage levels and sweet taste profiles,” said Ms. Naeini.

    Sugar reduction is top-of-mind for many consumers, according to Mr. Caputo. “Sugar is the number one ingredient villain among consumers for good reason. Disease, oxidative stress, and obesity are just a few of the negative consequences associated with excess sugar consumption. Consumers are highly aware of their sugar intake and avoid certain types of sugars (including artificial sweeteners).”

    Food, beverage, and ingredient companies, including Virginia Dare, are adapting product formulations in several ways, for example, by adjusting flavor, texture, and mouthfeel complexity. “By relying less on sweetness and creating a product with sour, bitter, spicy, floral, and aromatic components, we can round out the taste profile with complex flavors and texture to heighten sensory appeal and reduce sugar without sacrificing taste,” he said.

    Companies can also incorporate minimally processed natural sugars and/or sweeteners (e.g., raw honey, maple syrup, monk fruit, date sugar, coconut palm sugar, stevia, erythritol), which often deliver added nutritional value in the form of vitamins, minerals, antioxidants, and fiber, he added. Other tools and tactics include using fruit and vegetable ingredients to add sweetness naturally, and using natural flavor enhancers and modulators to increase or extend sweetness perception.

    Flavor Focus
    Consumers today are increasingly interested in trying new, exciting, and unique flavor combinations, Mr. Caputo added. “For fruit profiles, exotic and tropical flavors are popular. Innovation in flavor and nutrition are most important to modern beverage consumers, and exotic fruit fits both. Dessert and fantasy flavors such as birthday cake or chocolate brownie remain popular in protein and sports drinks. However, creating indulgent profiles with ingredients like nuts, cocoa, coffee, and sweet spices may be a better fit for health and wellness beverages to emphasize naturalness.”

    In anticipation of continuously shifting consumer preferences due to cultural diversity and globalization, formulators continue to innovate unique and creative flavors to appeal to broad audiences, according to Mr. Chaudhari. “Some of the exotic flavors are not only to offer a refreshing experience, but also to add value. Some examples are flavors such as ginger, turmeric, chili, cinnamon, and garlic extracts.”      


    Starbucks & Nestlé Form Global Coffee Alliance
    Nestlé pays $7.15 billion for global license of Starbucks consumer and food service products.

    Starbucks Corporation and Nestlé S.A. will form a global coffee alliance to accelerate and grow the reach of Starbucks brands in consumer packaged goods (CPG) and food service. With a shared commitment to ethical and sustainable sourcing of coffee, this alliance will transform, expand and elevate both the at-home and away-from-home coffee and related categories around the world, according to the companies.

    As part of the alliance, Nestlé will obtain the rights to market, sell, and distribute Starbucks, Seattle’s Best Coffee, Starbucks Reserve, Teavana, Starbucks VIA, and Torrefazione Italia packaged coffee and tea in all global at-home and away-from-home channels. Nestlé will pay Starbucks $7.15 billion in closing consideration, and Starbucks will retain a significant stake as licensor and supplier of roast and ground and other products going forward.
    Additionally, the Starbucks brand portfolio will be represented on Nestlé’s single-serve capsule systems.

    “This global coffee alliance will bring the Starbucks experience to the homes of millions more around the world through the reach and reputation of Nestlé,” said Kevin Johnson, president and CEO of Starbucks. “This historic deal is part of our ongoing efforts to focus and evolve our business to meet changing consumer needs, and we are proud to work alongside a company that is committed to our shared values.”

    “This transaction is a significant step for our coffee business, Nestlé’s largest high-growth category,” said Mark Schneider, CEO of Nestlé. “With Starbucks, Nescafé, and Nespresso we bring together three iconic brands in the world of coffee. We are delighted to have Starbucks as our partner. Both companies have true passion for outstanding coffee and are proud to be recognized as global leaders for their responsible and sustainable coffee sourcing.”

    This global alliance combines the strength and affinity of the Starbucks brand with the global reach of Nestlé and its iconic coffee brands, creating new growth opportunities in the established North American markets and unlocking expansion in international markets. In the U.S., it also enhances Nestlé’s retail and food service presence in coffee, complementing its position in instant coffee and super-premium single serve with Starbucks strong presence in K-cup pods. As part of this perpetual global license agreement, Starbucks will lead in sourcing, roasting and Starbucks global brand management for the alliance, while the two companies will work closely together on innovation and go-to-market strategies to bring coffee to customers around the world.

    Approximately 500 Starbucks employees will join the Nestlé family to drive performance of the existing business and global expansion. Operations will continue to be located in Seattle.

    The agreement is subject to customary regulatory approval and is expected to close this summer or early fall. The agreement excludes ready-to-drink coffee, tea, and juice products.

    Starbucks intends to use the after-tax proceeds from this up-front payment primarily to accelerate share buybacks and now expects to return approximately $20 billion in cash to shareholders in the form of share buybacks and dividends through fiscal year 2020.
    Additionally, the transaction is expected to be earnings per share (EPS) accretive by the end of fiscal year 2021 or sooner, with no change to the company’s currently stated long-term financial targets. 
          
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    • Antioxidants | Eye Health | Minerals | Omega-3s | Research | Vitamins
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    Nutraceuticals World

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