Shaping the next generation of soft drinks: ‘The baseline for innovation has become more demanding’

By Rachel Arthur contact

- Last updated on GMT

Shaping the next generation of soft drinks: ‘The baseline for innovation has become more demanding’

Related tags: Soft drinks, Soft drink, Richard hall

Taste and price are no longer the only criteria for beverage launches: brands need to meet consumer demand for health, natural ingredients, responsible sourcing and sustainability. While the baseline for innovation has become more demanding, there is still a huge white space for new ideas and products, according to Zenith Global.

Consumers have become more educated and vocal in what they expect from the products and brands they buy.  

Within more rigorous consumer demands lie plenty of opportunities for innovation, says Richard Hall, chairman, Zenith Global. The theme of the 14th​ Global Soft Drinks Congress​ (April 17-19, Prague) will be Uncapping Potential: ​exploring how brands are innovating and allowing consumers to experiment.

Criteria for successful innovation

Whether in RTD tea, sparkling water, fruit drinks, plant waters or soda, attributes such as ‘low calorie’ or ‘natural’ have become standard callouts for many products.

“It the past, the criteria for beverages used to be taste, convenience, image and affordability,” ​said Hall. “Now – as well as the targets from a generation ago - it’s naturalness, health, function, sustainability and ethics.

“The baseline for innovation has become more demanding – but that doesn’t mean to say that the whole market is going in one direction. There is still a very big space which stretches from goodness all the way through to indulgence, and at the same time from budget to premium and personalization, as well as from naturalness through to functional benefits.”

Ones to watch: water, fruit and tea

Three areas that meet key consumer criteria are water, fruit and tea.

Bottled water growth,​ for example, is predicted to continue with flavored and sparkling waters emerging as an alternative to carbonated beverages. Meanwhile premium products such as Coca-Cola’s smartwater and PepsiCo’s LIFEWTR are gaining traction, while other brands are exploring added value with antioxidants or added electrolytes.

Meanwhile RTD tea is a ‘star performer’​ in the soft drinks category: having growth 40% globally since 2011. RTD teas also offer an alternative to carbonated soft drinks,  perceived as a healthier option thanks to antioxidants and natural positioning.  

“Water, fruit and tea are three big opportunities for growth, with combinations of naturalness, health and lightness,”​ said Hall.

Sustainability

There has recently been increased attention to all facets of sustainability: ranging from commitments for 100% rPET bottles from Danone's evian​ and Nestlé's Pure Life bottled waters; carbon neutral breweries from Heineken​ and Carlsberg​, through to an 100% recycling commitment from Coca-Cola.

“I don’t think there has ever been such a cascade of serious commitments as the past few weeks,” ​said Hall. “And it’s not just the industry: it’s the EU, the government, and increased attention overall to climate change.

Health, wellness and sustainability will continue to shape the industry in the years to come, said Hall.

“I believe the future will see each one of us using food and drink to improve our lifestyles, rather than becoming dependent on medicine for a longer, healthier, active life.

“We’ve learned over the past 25 years that a surprising amount of health in later life is shaped by what we eat and drink. We can help address major disease risks with good nutrition. We would prefer to stay away from hospitals and medicines if we can.

“The industry has spent much of the past few years concentrating on sugar and calories and has moved towards the choices that consumers are looking for. The next five years will focus more on overall diets and sustainability."

Health, sustainability and innovation: 3 key trends at Soft Drinks Congress

Zenith’s 14thGlobal Soft Drinks Congress​ will offer delegates international market updates, overviews of key market trends, excellent networking opportunities and time for additional informal discussions.

“Health is the biggest issue: with the increasing appeal of waters and lighter drinks challenging regular carbonates and juices,”​ said Hall. “The environment is the other enduring theme, with plastic recycling and waste at the forefront of the agenda. The congress will address both of these, with contributions from global leaders such as PepsiCo, AB InBev and Capri-Sun, as well as regional players and innovators.

“Innovation has been the third big market driver, with speakers putting the spotlight on areas such as RTD tea, RTD coffee and functionality.”

The event also includes an entrepreneur shootout session, with a panel of experts commenting on innovator presentations. The winners of the annual InnoBev Awards will be announced during a gala dinner during the congress, with 17 categories covering innovation, marketing, technology, packaging and CSR across all sectors in the beverage industry.

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