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beveragedaily.com predictions for 2013: part one

Killer chords that could rock the beverage industry in 2013: Part 1

By Ben Bouckley+Ben BOUCKLEY

03-Jan-20131357167600
Last updated on 04-Jan-2013 at 15:19 GMT1357309180

If the beverage world were a band poised on the brink of super stardom, here are some of the killer chords and rollickin’ riffs that could shake up the scene in 2013, as we solo on everything from carbonates to beauty drinks and beyond...

Carbonates (still) feeling flat: Not even bold mid-calorie moves trailblazed by Dr Pepper with its 10 portfolio (since late 2011) and Pepsi NEXT (early 2012) can really arrest volume declines in the US, Western Europe and other developed markets, it would seem.

Speaking at InterBev 2012 in Las Vegas, analyst Gary Hemphill from Beverage Marketing Corporation (BMC), predicted further volume declines for carbonated soft drinks, and said that diet drinks hadn’t really reversed a consumer shift out of the category.

Meanwhile, Hemphill put his neck on the line and said that BMC didn’t expect mid-calorie offerings to have a “monumental overall effect” on the category’s fortunes.

Simply put, bottled water and other healthy or niche beverage options will steal more share from CSDs in developed markets, although emerging economies are still a healthy growth engine for the likes of Pepsi and Coke in terms of their traditional brands.

Niche appeal: Traditionally, it wasn’t cool for big beverage brands to paint themselves into corners, in terms of producing products without true mass market appeal.

But because of the fragmented nature of demand in established markets, this is no longer the case, as the success of everything from beauty drinks to bubble tea attests to.

Consumers are better educated on, and prepared to pay more for, more ‘individual’ beverages, so it’s a case of firms chasing value over volume, as evidenced by the continued success of energy, bottled and canned coffee/teas, sports drinks, especially among higher income shoppers.

Cider strikes US gold: No news here really. The big brewers – Carlsberg, Heineken, AB InBev, Miller Coors – have all taken the first bite of the US cider (industry) apple, the premium seeds of which were planted among UK urbanites in circa. 2005, and boy does it taste good.

Despite US volume sales of just 59m liters in 2011, growth is explosive.

Influential Euromonitor International analyst Spiros Malandrakis even goes so far as to say that the boom offers hard-pressed brewers a ‘beer bust’ escape route, as volumes beyond the craft segment flatline in the States.

You can read Part 2 of this two part article series here.

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