Round-Up - NPD: Soft Drinks, Hard (Health) Benefits
By Tom Vierhile, innovation insights director at Datamonitor | 22 November 2012
Pepsi Special has recently been launched in Japan
In this month's Datamonitor round-up of new product development, Tom Vierhile turns his attention to the soft drinks launches in recent weeks.
The baseball season in the US ended in October, but you would never know it, judging by the hardball being played in the soft drinks market today. Tired of withering criticism that their products are contributing to a public health crisis, soft drinks makers are beginning to make bold and aggressive health claims for a new generation of drinks that could turn the tide.
It’s tough being a soft drink maker today. If the constant drumbeat of soft drink-related obesity worries isn’t enough to produce a migraine, there’s even uglier news on the political front. If it isn’t New York City mayor Michael Bloomberg looking to ban large size soft drinks from city streets, it is politicians like Chicago mayor Rahm Emanuel that are making the battle against soft drinks personal. Mayor Emanuel’s plan is to limit the sale of so-called 'high calorie' soft drinks (25 calories or more per 8oz serving) in municipal buildings to just 25% of each machine’s cold beverage inventory.
Who knew that we would see a day when soft drinks would be regulated like a controlled substance?
But, the times are changing, and recent market developments in Japan and France may show the way forward for soft drink makers. Earlier this year, Japan’s Kirin Beverage launched a soft drink called Kirin Mets Cola, a sugar-free CSD made with indigestible dextrin fibre, an ingredient said to suppress the absorption of fat that comes from food consumed together with the drink. Website ads for the beverage show it as a potential antidote for fat laden fast-food meals. The fat absorption health claim received the blessing of Japanese health authorities that granted the beverage FOSHU (foods for specified health uses) approval.
Kirin Mets Cola created a stir, but the newer launch of a similar drink in Japan called Pepsi Special is creating more of an earthquake as it becomes increasingly clear that functional soft drinks are the wave of the future. Like Kirin Mets Cola, Pepsi Special is also fortified with dextrin fibre. According to Pepsi’s Japanese partner and producer of the drink, Suntory Holdings Limited, Pepsi Special can also inhibit a rise in triglycerides after a meal, which indicates positive blood cholesterol benefits. The variant has also been granted FOSHU approval.
Given the huge difference in health claim approval processes in Japan versus other world markets, nobody is suggesting that Pepsi Special will invade Europe or the US anytime soon. But, a new drinks launch in France suggests that such moves may only be a matter of time and also foreshadows future involvement from pharmaceutical firms in the sector. The Coca-Cola Co is pairing up with French pharmaceutical maker Sanofi to create a 50-50 partnership focused on drinks that offer specific health and beauty benefits.
The Coca-Cola/Sanofi partnership is yielding a new soft drink range under the Beautific Oenobiol brand that will reportedly be formulated with a combination of mineral water, fruit juice and a cocktail of nutrients. These nutrients are expected to provide health benefits geared toward hair and nail health, skin enhancement and improved vitality. The beverage line will be distributed through French pharmacies, a distribution channel that may enhance trust in the health claims promised here. Trust is an issue with functional drinks, as Datamonitor’s 2011 Global Consumer Survey found 85% of consumers interested in the concept of foods and drinks that can improve appearance, but just 42% are currently buying products that do so.
Collectively, these efforts mark a new feistiness on the part of soft drink makers, albeit one backed by more hard science to avoid expensive court battles or claim suspensions by health regulators like the European Food Safety Authority (EFSA). Court is where some past functional soft drink efforts have ended up, like Enviga, the green tea-based drink from Coca-Cola and Nestle that made a specific fat-burning claim that was later retracted. Other brands that have racked up billable hours include Diet Coke Plus and Cherry Antioxidant 7Up. At issue in the US, at least, is the Food and Drug Administration’s position that “snack foods”, including candy and CSDs, are not appropriate vehicles for fortification.
Where this is heading next isn’t clear. What is clear is that, in the words of Winston Churchill, we may be at “the end of the beginning” for functional soft drinks as the trend is picking up steam after earlier false starts. A case in point is Kagome Tomash Sparkling Tomato Drink, a 2012 launch from Japan that leverages the natural and increasingly attractive health properties of tomatoes. The drink is rich in lycopene and is also high in GABA (gamma-aminobutryic acid), a substance thought to reduce anxiety and cut stress.
Another soft drink that has the potential to be a game changer is FIX Hair Skin Nails Youth-Activating Beverage, a fruit-flavoured refresher that contains a patented compound called ch-OSA said to activate the biological pathways that generate collagen. The maker of the drink, California-based FIX Brands, claims that adults lose an average of 1% of their collagen a year, starting at the age of 21. And, since collagen is essential for healthy skin, hair and nails as well as bones and joints, this loss has huge health consequences.
But, what really separates FIX Hair Skin Nails from the pack is the specificity of its health claims. The results of published clinical trials claim that the ch-OSA ingredient reduces fine lines and wrinkles by 30%, strengthens and thickens hair by 13% and improves skin elasticity by more 89%.
Soft drink formulations backed by published clinical results pointing to quantifiable improvements in health outcomes could force government regulators to reconsider regulations that codify that soft drinks and enhanced health must be mutually exclusive.
This month, Tom Vierhile at Datamonitor introduces us to the concept of "bottled water-plus". Could this be the saviour for the carbonated soft drink industry?...
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