New Product Development in the Global Drinks Industry
By: Tom Vierhile, Innovation Insights Director at GlobalData
Every month, Tom Vierhile from consumer intelligence provider GlobalData considers the latest NPD activity in the drinks industry.
It is ironic that one of the newest beverage ingredient trends is linked to one of the oldest ingredients in traditional south Asian medicine. Ashwagandha has been a prized ingredient in Ayurvedic medicine for over 3,000 years, but it is only now making inroads into packaged beverages. And, if current innovation trends are any indication, ashwagandha could be a rising star in the functional drinks sector.
One of the older flavours in the soft drinks market has become one of the category's hottest new trends. Ginger is spicing things up with a wave of new product innovation sweeping through non-alcoholic beverages, from carbonated soft drinks and energy drinks to plant waters, healthful shots, and beyond.
The future of carbonated soft drink innovation may be closer than we think. The Japanese debut next month of Coca-Cola Plus – a fibre-enriched, fat-blocking, calorie-free soft drink – could be a sign of a shifting mindset among CSD companies away from removing the 'bad stuff' to adding more of the 'good stuff'.
Humans have been drinking vinegar for centuries as the practice dates as far back as 400 B.C. when apple cider vinegar began to be used as a home health remedy. The recent resurgence of the use of apple cider vinegar as a health elixir has breathed new life into the practice and has helped position drinking vinegar as a niche to keep an eye on. While it is still early, drinking vinegar is blossoming with new product launches from many influential functional drink companies.
If turmeric was a stock, Wall Street would be issuing a "buy" recommendation to investors. These are exciting days for a 'super root' that has been associated with Ayurvedic medicine for thousands of years, yet is emerging today as a hot new functional drink ingredient.
In the US, carbonated water has become a non-alcoholic beverage star, as consumers choose sparkling waters and seltzers instead of carbonated soft drinks to cut calorie and sugar consumption. The same trend is now crossing over into flavoured alcoholic beverages (FABs), as so-called 'hard seltzers' have emerged as a promising new niche.
Drinkable yogurt has always been the poor stepchild of cup yogurt. Makers of yogurt have generally chosen to spend their time and resources on opportunities in cup yogurt rather than pursue the beverage opportunity. But, there are signs that this is changing, as top yogurt brands are opening the innovation spigot in yogurt drinks.
For something that has been around as long as matcha has – literally centuries – it is strange to say that matcha is having a "moment" in the beverage market. Yet that is precisely the case as matcha is becoming a "go to" functional beverage ingredient of late, expanding outside of tea and into a variety of drinks categories.
It wasn't supposed to end like this – a refund of the full purchase price and a chance to forget the whole thing. Keurig Kold was viewed as a potential game-changer by The Coca-Cola Co; a "consumer engagement platform with unlimited potential". For Keurig Green Mountain, Keurig Kold was the entry ramp to a cold, non-alcoholic beverage category said to be five times larger than the hot drinks market. But, it didn't work out that way for either company and the experience offers a chance to reflect on beverage innovation itself.
Consumers interest in protein prompting innovation beyond shakes and smoothies
It's good to be in the bottled water business. According to Canadean, packaged water sales are expected to drive almost all of the net growth in beverage consumption over the next five years in the US, as water continues to gain at the expense of carbonated soft drinks. Premium water could lead the next wave of growth thanks to a wave of recent new product innovation.
Prior to 2014, few would have thought that drinking bone broth – one of the oldest mainstays of the culinary world – would become a thing. Drinking something viewed as a soup or meal ingredient was originally dismissed as a faddish obsession of the Paleo crowd. But, instead of flaming out, bone broth seems to have caught fire, as it moves from food service oddity to a potential player in functional beverages.
Move over iced coffee; cold brew coffee has your number. The average coffee drinker may not know the difference between iced coffee and cold brew coffee, but odds are that they will soon, as cold brew coffee takes shape as the beverage industry's next potential superstar. Few beverage concepts have gone from hipster favourite to mainstream must-have in as little time.
Milk alternatives may lack the advertising heft of CSDs, the share-of-stomach of bottled water, the sophistication of coffee or the mind-numbing innovation of craft beer. But, what they do possess is the fastest per-capita consumption growth of any non-alcoholic beverage category in the US, an achievement many product categories would be envious about.
It is well known that carbonated soft drinks have a sugar - and obesity - problem that has led to steady sales erosion over the past decade. Less well known is that juice is suffering as much, if not more, from many of the same issues.
- Ten questions for Diageo - Analysis
- Have spirits companies forgotten the mainstream?
- Does alcohol accelerate the onset of dementia?
- Pernod's mood darkens over India - Analysis
- Why Scotch must drop the 'malts good, blends bad'
- Moet Hennessy unaffected by LVMH Dior buy
- Distell acquires majority stake in Cruz Vodka
- Diageo to cut 105 jobs in Scotland, 50 in Italy
- Portman Group heads to Tesco for new chief exec
- William Grant names Europe & NA Travel Retail head
- Global Scotch insights - market forecasts, product innovation and consumer trends
- Global Champagne and sparkling wine insights - market forecasts, product innovation and consumer trends
- Battle of the Generations - The fight for iGen, Millennial, Gen X and Baby Boomer consumers
- Craft Beer: Coming of Age or Past Its Prime?
- Myanmar - ISA Country Report