Round-Up - New Product Development in the Global Drinks Industry
By: Tom Vierhile, Innovation Insights Director at Canadean
Every month, Tom Vierhile from Canadean considers the latest NPD in drinks.
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.
From a sales and growth perspective, there’s a lot to like about bottled water. With US per-capita consumption up just over 6% in 2014, according to Canadean, bottled water is helping beverage makers forget about steadily-shrinking sales of carbonated soft drinks. But, bottled water has issues of its own, primarily related to single-use plastic packaging, which is increasingly seen as wasteful and possibly even harmful to health.
Wheatgrass has been a staple of the juicing community for nearly as long as there have been juicing machines. But, juicing can be messy, time-consuming, expensive and inconvenient. Consumers averse to making their own wheatgrass juice, shots or smoothies now have a growing array of packaged wheatgrass drinks to choose from as innovation in ready-to-drink wheatgrass takes off.
Soft drink sales may be slipping, but it seems that consumers have never really lost their taste for soft drink flavours. The surprising success of hard root beer is opening up a new vein of soft drink-inspired hard alcoholic beverage innovation that could be the biggest new opportunity in alcoholic drinks for quite some time.
Don’t look now, but one of the most memorable and controversial trends in soft drinks from the 1980s and 1990s – clear soft drinks – is staging a comeback. And, some of the iconic clear soft drinks of the period, including Original New York Seltzer, Clearly Canadian and maybe even Crystal Pepsi are leading the charge.
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