Health Driving Beverage Growth

DUIVEN, the NetherlandsAccording to a recent press release from Innova Market Insights, new product activity in soft drinks appears to be accelerating strongly, with rising levels of global launch activity over the past two years. Fruit-based beverages dominated launch activity, accounting for over 43% of total launches. Carbonated beverages took second place with 14%, just ahead of concentrates and mixes, then iced tea and coffee drinks, sports and energy drinks, plain and flavored water, and sports and energy drinks.

Over the past five years, the percentage of new launches of carbonated beverages, juices and juice drinks, concentrates and mixes, and iced tea and coffee have risen, while the number of new bottled waters (flavored and unflavored) and sports and energy drinks has fallen. However, Lu Ann Williams, research manager, Innova Market Insights, points out that a declining share of launch activity does not necessarily indicate a poor market performance overall. Sports and energy drinks remain one of the fastest-growing sectors of the market over that period, despite their share of global soft drinks launch activity falling from a peak of 13% in 2005 to just under 7% today, she says. Consolidation in the increasingly mature market, particularly the greater dominance of multinational brands and the disappearance of many smaller brands, is probably the main reason for slowing activity rates, although actual launch numbers did still rise over the five-year period.

Innova notes that health continues to be a key area of interest in the soft drinks market, where some products, such as juices and water, have an inherently healthy image, while some are formulated for specific benefits beyond hydration, notably sports and energy drinks. Elsewhere in the mainstream market, however, companies are continuing to position all types of products on health platforms of various kinds, including passive claims like sugar-free, low-calorie, natural, etc., and active claims like vitamin- and mineral-fortified, added-calcium and functional, as well as offering specific health benefits such as immune health, heart health, oral health, etc.

Over 58% of the soft drinks launches recorded by Innova in the 12 months ending June 2012 had a health positioning of some kind, with over half using passive health claims and 18% using active health claims, indicating that a number may use both types of claim together. The most-popular health-related claims recorded were undoubtedly concerned with naturalness and freedom from artificial additives and preservatives, and encompassed a wide range of products, led by water and juices, which tend to be seen as inherently natural, or can be relatively easily formulated to use this type of claim. Over 23% of launches were marketed as free from additives and preservatives, while nearly 13% used natural claims. Combining the two categories accounts for over 30% of total soft drink launches using either one or both claims. If the number of organic claims is included, accounting for over 5% of launches, the total rises to 35% using one or more of the three claims.

The more-traditional area of low-calorie and diet drinks also remains very popular, with reduced-sugar lines taking second place overall in terms of health claims, ahead of low-calorie products. This type of product has received a considerable boost over the past few years with the approval of stevia-based sweeteners for use in the United States, Australasia and Europe. With their natural positioning, they can help fill a gap in the market as demand for clean label products has risen. The number of soft drinks launches containing stevia has already exceeded the 2011 total in the first 6 months of 2012, with Innova recording particularly high levels of activity in the United States.