Zintro experts outline trends in the beverage industry

By Maureen Aylward

The beverage industry is one that is both traditional and innovative. We asked our Zintro experts to outline emerging trends and what the players in the industry might be up to.

Paul Kennedy, an expert in composite materials, says that there are three overarching trends in the beverage markets. “First, from a consumer appeal point of view, the range of functional or better-for-you beverages continues to be the major growth area, and this includes “special waters” or water+,” says Kennedy. “Secondly, the big two players continue to dominate of beverage shelf/cooler space by either launching new products with high media and promotional spending or outright acquisition. Clearly loss of space to someone else’s new idea is not an option.”

Kennedy says that the third trend focuses on upsizing volume packages, which has been going since the early 90s. “Most single serves are 450ml plus and some are over 600mls. This would have been a multi-serve pack a number of years ago. In tandem with this is the ongoing value strategy where cents per milliliters is flat or declining and profit is driven by the upsized units,” he says.

Peter Leighton, a consumer products expert, says the beverage industry is being fueled by growth in the functional segment: products that are healthy and provide the consumer a functional benefit. “With the proliferation of innovative and clinically studied bioactive ingredients, the beverage industry has been leading the way in incorporating these ingredients into products,” explains Leighton. “Most of the major beverage companies have been playing catch up on functional beverages. More recently, industry leaders are doing early stage investment into functional drink companies, providing full buyouts upon certain growth criteria. Since the major beverage companies are not very innovative, they are leveraging their financial strength through acquisitions.”

Costa Nikias, an expert in beverage production and process management, says that the big beverage manufacturers are essentially looking to do two things:

1) Retain their market share of soft drinks in Western developed markets as people in the developed countries look to move away from high sugar drinks and energy drinks and more towards healthier alternatives, such as organic and vitamin-based beverages.

2) Expand into new beverage categories, such as fruit juices, coffee, and beer. “SAB Miller and Coca Cola have joined forces in Australasia and developed a brewery purely to manufacture premium beer lines such as Grolsch, Bluetongue, Peroni and other leading premium beer lines,” says Nikias.

“The large beverage companies are looking for the next growth category as they understand that limiting their resources to only one category in the consumer-driven markets is dangerous. Expansion into other sectors is the only way to fuel growth,” says Nikias.

He says in underdeveloped markets and emerging markets, such as India, China, and Africa, the large beverage manufacturers are seeing single digit growth for core lines like colas and energy drinks. “The emerging middle class in these countries gives rise to consumerism that will fuel beverage growth for some time, until the middle class refines it’s brand choices and moves to more healthier alternatives,” says Nikias.

Donna Henry, a food science educator, says that there is no question the trend is toward natural, fortified, and organic beverages. “The market has so many new nutrients that the issue is how to define the health connotation and ingredients that will be promoted to the consumer,” she says.

Henry explains that several of the big industry players are looking at Omega 3 in beverages from waters to dairy. “Polyphenolic compounds that prevent oxidation are showing up in new varieties of fruits/veggies/teas that are more specialties by process or concentration,” says Henry. “Colors that are two-fold nutrient and natural color source are also prominent; for example, Zeaxanthin for color and vision.”

Henry says the current perception that natural is better is rapidly driving beverage development. But, the industry should be focused on product/nutrient dependence for health and not just natural because many production facilities are not set up for natural production.

Our experts would love to hear from you!  Post your question for beverage industry experts here.  Are you a subject matter expert?  Sign up as a Zintro expert to start generating free leads for your business.

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