By Lu Ann Williams, Director of Innovation, Innova Market Insights06.02.20
Health continues to be a key driver in beverage choices. As a result, companies are positioning all types of soft drinks products on various health platforms. Sixty percent of global soft drinks launches recorded by Innova Market Insights in 2019 used a health positioning of some kind, rising to nearly three-quarters in the U.S. Key areas of interest in recent years have tended to focus on clean labeling, although there is also a high level of interest in sugar and calorie reduction.
This ongoing interest in clean labeling is backed up by a 2019 Innova Consumer Survey that indicated 68% of consumers thought a product was extra attractive when it had natural ingredients, with 56% specifically wanting to avoid artificial colors. One or more clean label positionings (no additives/preservatives, natural, organic, GMO free) featured in 36% of global soft drinks launches recorded by Innova Market Insights in 2019, rising to 49% in the U.S.
Running alongside this interest in clean labeling has been the rising concern over levels of sugar consumption in the diet, which has tended to somewhat overshadow the more straightforward low calorie or diet drink options that previously dominated low and light concerns. The soft drinks category has been particularly active in this area, with 22% of 2019 launches positioned as low sugar, no added sugar, or sugar free, rising to 27% in the U.S.
Slashing Sugar
Opportunities for reducing sugar intake are taking a number of directions as companies address evolving concerns and demands. Strategies for reducing sugar intake feature a combination of sugar reduction, sugar substitution, and moving beyond sweetness to alternative tastes, often supported by a combination of functional formulations and blends, next generation sweeteners, and other technological developments.
Sugar reduction can be achieved in a number of ways, including removing or reducing the amount of added sugar, replacing part of the sugar formulation with non-nutritive sweeteners, and/or using innovative processing technologies, such as using enzymes to convert simple sugars to fibers in juices.
Interest in sugar substitution has driven rising use of sweeteners. Sucralose is the most popular non-nutritive sweetener, used in 17% of soft drinks launches in 2019. This is despite the growing interest in natural non-nutritive sweeteners, such as stevia, monk fruit, and thaumatin. Allulose, which also occurs naturally in small quantities in a variety of sweet foods such as figs, can also be manufactured synthetically.
Stevia is now well established and was the leading natural non-nutritive sweetener, featuring in 6.6% of soft drinks launches in 2019. It is particularly popular for sweetening soft drinks and is now finding success after a number of years on the market following technological developments that allow more functional and palatable blends for specific applications, often featuring some other natural sweetening options, particularly monk fruit.
All Eyes on Allulose
Allulose is a newer natural non-nutritive sweetener. It is a rare sugar, resembling sugar structurally and conferring many of the same functional benefits of sugar with only 5% of the calories. It is not metabolized like sugar and has a minimal effect on blood sugar and insulin levels.
It has had Generally Recognized As Safe (GRAS) status in the U.S. since 2014 and started to be used on a very limited scale. The April 2019 announcement by the Food and Drug Administration (FDA) that allulose did not need to be included in total and added sugar counts in U.S. nutritional labeling has now cleared the way for much higher levels of use and a potential move mainstream.
Early entrants to the U.S. market were Coca-Cola’s Fuze Meyer Lemon Black Tea and Mango Green Tea, sweetened with a proprietary blend of sugar, allulose, and stevia. More recently, in early 2020, Humm Zero Sugar Kombucha was introduced in Blood Orange, Peach Tea, Ginger Lemonade, and Raspberry Lemonade variants, featuring a blend of allulose and monk fruit.
Kombucha
Kombucha, the fermented, lightly effervescent black or green tea drink from China, has been one of the fastest growing areas in the ready-to-drink or iced tea market in recent years, helping to drive the overall market forward. The drinks traditionally contain multiple species of yeast and bacteria along with organic acids, active enzymes, amino acids, and polyphenols produced by these microbes. These drinks have been available in other countries outside Asia for some years but, with rising interest in functional beverages and fermented products, and a focus on positioning itself as a sustainable well-being-boosting alternative to artificial soft drinks, it has moved out of the specialty sector and more into the mainstream.
According to Innova Market Insights data, over 13% of global iced tea launches in 2019 featured kombucha in a rising range of flavors and formats, up from just over 5% in 2016.
Penetration is even higher in specific countries, such as the U.S., where it reaches over 25%, and in Australia, where it reaches 47%, although from a very small base. The U.K., not a traditional market for iced tea, with the majority of consumers still preferring to drink their tea hot, has also seen high levels of interest, with kombucha accounting for nearly one-third of iced tea launches in 2019, although penetration in Europe overall is similar to the global figure of 13.4%.
Over 90% of global launches were positioned on a health platform of some kind in 2019, with clean labeling and digestive health key areas of interest.
The potential of the sector has been recognized by major multinationals, with the world’s leading soft drinks companies buying into the sector over the past five years. PepsiCo bought the organic kombucha company Kevita in the U.S. at the end of 2016, while Coca-Cola bought its first fully-owned kombucha brand in the second half of 2018 with Organic & Raw Trading Co of Australia and its Mojo brand.
Both these brands have been active in the market in the first part of 2020, with launches including Kevita Master Brew Kombucha in Blackberry Hops, French Oak Apple and Exotic Greens variants and Mojo Activated Kombucha in Ginger, Turmeric & Ginger, Blueberry & Raspberry, Passion Fruit, and Mango & Lime flavors.
Plant-Based Water
Another healthy beverage subcategory growing from a small base is plant-based waters, which benefit not only from an inherently healthy image, but also and more specifically from the rising interest in plant-based and vegan options, as well as the positive influence of coconut as a key ingredient in recent years.
It remains one of the smallest soft drinks subcategories overall in terms of new product development (NPD), but has also been one of the key growth areas in recent years. Launch numbers remain relatively modest and penetration levels low, and despite the rising interest overall in recent years, numbers fell back slightly in 2019, with penetration levels down to just 2% from 2.5% in 2018 and a peak of over 3% in 2017. This indicates that the subcategory, despite overall growth and a high profile, may be reaching its limits in terms of NPD and could remain a very small niche without much further development.
Interest in plant-based waters has been rising, however, largely in line with interest in plant-based diets in general. The drinks have a strong health image, with over 75% of launches recorded by Innova Market Insights in 2019 carrying a health claim of some kind. Launches tend to feature multiple health claims, many based on the properties of dominant coconut water, which has isotonic benefits and a natural, healthy, low-calorie image. Many products are also positioned as naturally gluten-free, paleo and vegan-friendly, while increasing numbers also carry claims such as low or zero calorie, no additives/preservatives, no added sugar or sweeteners, and GMO-free.
The U.S. is seeing high levels of interest, initially driven by coconut water, but now increasingly focusing on a range of other sources. An increasing variety of other types of plant-based waters include the relatively established, such as aloe and tree-based options such as birch and maple, alongside newer variants such as almond, chlorophyll, ginger, cactus, and nettle.
Even in the coconut water market, rising levels of competition have resulted in an increase in value-added and flavored variants on the market, with increasing numbers of launches featuring additional functional ingredients such as probiotics, fiber, and/or protein. Flavored variants may feature on-trend ingredients such as coffee, tea, and cocoa, as well as a range of fruit juices, while cold-pressed variants are also emerging in light of rising interest in minimal processing in the soft drinks category, and indeed in the food and drinks industry overall.
Health Drivers
While traditional carbonates and fruit drinks continue to dominate the soft drinks market in terms of sales, the maturity of these markets and some perceived health concerns have resulted in more consumers looking for something new and different in line with current trends and drivers. Health continues to be a key issue influencing choice, but taste and texture, convenience, novelty, hydration, refreshment, and indulgence also feature to varying degrees, depending on the consumer and consumption occasion.
Companies are continuing to extend out of their traditional areas, with new product activity continuing apace to find products that fulfill all these requirements and offer consumers an increasingly wide range of drinks to meet different lifestyles, occasions and need states.
Innova Market Insights is a global knowledge leader in the food and beverage industry. The market research firm has built its reputation on an extensive tracking system for new food and beverage product launches in more than 90 countries and its ability to use advanced data analytics to convert market research into meaningful guidance on present and future trends in FMCG. For more information: www.innovamarketinsights.com.
This ongoing interest in clean labeling is backed up by a 2019 Innova Consumer Survey that indicated 68% of consumers thought a product was extra attractive when it had natural ingredients, with 56% specifically wanting to avoid artificial colors. One or more clean label positionings (no additives/preservatives, natural, organic, GMO free) featured in 36% of global soft drinks launches recorded by Innova Market Insights in 2019, rising to 49% in the U.S.
Running alongside this interest in clean labeling has been the rising concern over levels of sugar consumption in the diet, which has tended to somewhat overshadow the more straightforward low calorie or diet drink options that previously dominated low and light concerns. The soft drinks category has been particularly active in this area, with 22% of 2019 launches positioned as low sugar, no added sugar, or sugar free, rising to 27% in the U.S.
Slashing Sugar
Opportunities for reducing sugar intake are taking a number of directions as companies address evolving concerns and demands. Strategies for reducing sugar intake feature a combination of sugar reduction, sugar substitution, and moving beyond sweetness to alternative tastes, often supported by a combination of functional formulations and blends, next generation sweeteners, and other technological developments.
Sugar reduction can be achieved in a number of ways, including removing or reducing the amount of added sugar, replacing part of the sugar formulation with non-nutritive sweeteners, and/or using innovative processing technologies, such as using enzymes to convert simple sugars to fibers in juices.
Interest in sugar substitution has driven rising use of sweeteners. Sucralose is the most popular non-nutritive sweetener, used in 17% of soft drinks launches in 2019. This is despite the growing interest in natural non-nutritive sweeteners, such as stevia, monk fruit, and thaumatin. Allulose, which also occurs naturally in small quantities in a variety of sweet foods such as figs, can also be manufactured synthetically.
Stevia is now well established and was the leading natural non-nutritive sweetener, featuring in 6.6% of soft drinks launches in 2019. It is particularly popular for sweetening soft drinks and is now finding success after a number of years on the market following technological developments that allow more functional and palatable blends for specific applications, often featuring some other natural sweetening options, particularly monk fruit.
All Eyes on Allulose
Allulose is a newer natural non-nutritive sweetener. It is a rare sugar, resembling sugar structurally and conferring many of the same functional benefits of sugar with only 5% of the calories. It is not metabolized like sugar and has a minimal effect on blood sugar and insulin levels.
It has had Generally Recognized As Safe (GRAS) status in the U.S. since 2014 and started to be used on a very limited scale. The April 2019 announcement by the Food and Drug Administration (FDA) that allulose did not need to be included in total and added sugar counts in U.S. nutritional labeling has now cleared the way for much higher levels of use and a potential move mainstream.
Early entrants to the U.S. market were Coca-Cola’s Fuze Meyer Lemon Black Tea and Mango Green Tea, sweetened with a proprietary blend of sugar, allulose, and stevia. More recently, in early 2020, Humm Zero Sugar Kombucha was introduced in Blood Orange, Peach Tea, Ginger Lemonade, and Raspberry Lemonade variants, featuring a blend of allulose and monk fruit.
Kombucha
Kombucha, the fermented, lightly effervescent black or green tea drink from China, has been one of the fastest growing areas in the ready-to-drink or iced tea market in recent years, helping to drive the overall market forward. The drinks traditionally contain multiple species of yeast and bacteria along with organic acids, active enzymes, amino acids, and polyphenols produced by these microbes. These drinks have been available in other countries outside Asia for some years but, with rising interest in functional beverages and fermented products, and a focus on positioning itself as a sustainable well-being-boosting alternative to artificial soft drinks, it has moved out of the specialty sector and more into the mainstream.
According to Innova Market Insights data, over 13% of global iced tea launches in 2019 featured kombucha in a rising range of flavors and formats, up from just over 5% in 2016.
Penetration is even higher in specific countries, such as the U.S., where it reaches over 25%, and in Australia, where it reaches 47%, although from a very small base. The U.K., not a traditional market for iced tea, with the majority of consumers still preferring to drink their tea hot, has also seen high levels of interest, with kombucha accounting for nearly one-third of iced tea launches in 2019, although penetration in Europe overall is similar to the global figure of 13.4%.
Over 90% of global launches were positioned on a health platform of some kind in 2019, with clean labeling and digestive health key areas of interest.
The potential of the sector has been recognized by major multinationals, with the world’s leading soft drinks companies buying into the sector over the past five years. PepsiCo bought the organic kombucha company Kevita in the U.S. at the end of 2016, while Coca-Cola bought its first fully-owned kombucha brand in the second half of 2018 with Organic & Raw Trading Co of Australia and its Mojo brand.
Both these brands have been active in the market in the first part of 2020, with launches including Kevita Master Brew Kombucha in Blackberry Hops, French Oak Apple and Exotic Greens variants and Mojo Activated Kombucha in Ginger, Turmeric & Ginger, Blueberry & Raspberry, Passion Fruit, and Mango & Lime flavors.
Plant-Based Water
Another healthy beverage subcategory growing from a small base is plant-based waters, which benefit not only from an inherently healthy image, but also and more specifically from the rising interest in plant-based and vegan options, as well as the positive influence of coconut as a key ingredient in recent years.
It remains one of the smallest soft drinks subcategories overall in terms of new product development (NPD), but has also been one of the key growth areas in recent years. Launch numbers remain relatively modest and penetration levels low, and despite the rising interest overall in recent years, numbers fell back slightly in 2019, with penetration levels down to just 2% from 2.5% in 2018 and a peak of over 3% in 2017. This indicates that the subcategory, despite overall growth and a high profile, may be reaching its limits in terms of NPD and could remain a very small niche without much further development.
Interest in plant-based waters has been rising, however, largely in line with interest in plant-based diets in general. The drinks have a strong health image, with over 75% of launches recorded by Innova Market Insights in 2019 carrying a health claim of some kind. Launches tend to feature multiple health claims, many based on the properties of dominant coconut water, which has isotonic benefits and a natural, healthy, low-calorie image. Many products are also positioned as naturally gluten-free, paleo and vegan-friendly, while increasing numbers also carry claims such as low or zero calorie, no additives/preservatives, no added sugar or sweeteners, and GMO-free.
The U.S. is seeing high levels of interest, initially driven by coconut water, but now increasingly focusing on a range of other sources. An increasing variety of other types of plant-based waters include the relatively established, such as aloe and tree-based options such as birch and maple, alongside newer variants such as almond, chlorophyll, ginger, cactus, and nettle.
Even in the coconut water market, rising levels of competition have resulted in an increase in value-added and flavored variants on the market, with increasing numbers of launches featuring additional functional ingredients such as probiotics, fiber, and/or protein. Flavored variants may feature on-trend ingredients such as coffee, tea, and cocoa, as well as a range of fruit juices, while cold-pressed variants are also emerging in light of rising interest in minimal processing in the soft drinks category, and indeed in the food and drinks industry overall.
Health Drivers
While traditional carbonates and fruit drinks continue to dominate the soft drinks market in terms of sales, the maturity of these markets and some perceived health concerns have resulted in more consumers looking for something new and different in line with current trends and drivers. Health continues to be a key issue influencing choice, but taste and texture, convenience, novelty, hydration, refreshment, and indulgence also feature to varying degrees, depending on the consumer and consumption occasion.
Companies are continuing to extend out of their traditional areas, with new product activity continuing apace to find products that fulfill all these requirements and offer consumers an increasingly wide range of drinks to meet different lifestyles, occasions and need states.
Innova Market Insights is a global knowledge leader in the food and beverage industry. The market research firm has built its reputation on an extensive tracking system for new food and beverage product launches in more than 90 countries and its ability to use advanced data analytics to convert market research into meaningful guidance on present and future trends in FMCG. For more information: www.innovamarketinsights.com.
