Richard Corbett

Comment - Soft Drinks & Water - Drinks for Grown-Ups

By | 6 September 2011

In this month's soft drinks & water column, Richard Corbett take a look at the potential open to soft drinks targeted specifically at adults.

In the early eighties four snack food pioneers came together in a Portacabin in the north of England to form Phileas Fogg snacks. The company's ethos was based on the concept that no snack products were specifically targeting adults. They spent 20 times the standard amount on packaging, served the snacks in bigger bags and sold them at a premium price. It was then just a case of watching the money roll in. In a little over a decade, the firm was snapped up by one of the bigger fish and the four founding directors lived happily ever after.

As Pepsi has shown us, snacks and soft drinks have strong associations, and the Phileas Fogg story is one that many believe is appropriate to the soft drinks market - a market that is all too often focussed on a younger audience.

The term ‘adult soft drink’ is a pretty broad term and interpretations inevitably vary. After all, adults consume all soft drinks - with the exception of a few with cartoon characters on the label. Enhanced or wellness drinks and any product that does more than just quench thirst are designed to appeal to adults and not children, as are any number of juices with positive side effects; adult soft drinks, then, are a broad church. It is an opportunity that has been identified for many years; as long ago as 2000, UK operator Britvic paid a considerable sum for Orchid Drinks, a company that specialised in adult soft drinks. However, seeing the opportunity is very different to exploiting it.

The adult soft drink market is indeed complex and diverse, but there are certainly opportunities for products that target consumers in both the on- and off-trades.

In these situations, consumers are generally presented with a choice of an alcoholic drink or a soft drink and, in today’s world, more consumers want to opt for the soft option. These consumers have recently been in the sights of two big global players as they become the latest to try to tap into a market that is small in volume but potentially high in value.

In August, Coca-Cola unveiled a revolutionary new adult soft drink soft drink, Tumult. The drink is actually fermented, and is classed not as a non-alcoholic beer but as a sort of next generation soft drink. It may not be classed as a beer, but one of the two flavours it is available in is ‘beer’ (the other is ‘fruit’). The launch is not what might be termed a global roll-out; Tumult will only be available in selected outlets in France. A successful trial will lead to a more extensive launch. 

What I like about Tumult is that, whereas traditionally many adult soft drinks have a feminine bias, Coca-Cola has opted for a beer flavour. This means that the drink will reach out to a male audience as well as a female one. It is, of course, not just women that are seeking out non-alcoholic refreshment alternatives to other soft drinks.

Back in May, Carlsberg showed they too had not let this opportunity slip under the radar either and introduced Beo* (the name comes from the Latin for Happy or delight). Like Tumut, Beo* is keen to tick as many of the boxes for the cosmopolitan grown-up of today, educated on all things good and healthy. The drink uses only natural ingredients, with no added sugar and is available not in plain old apple and orange, but in apple & green tea and blood orange & hibiscus. Any adult CSD worth its salt must be packed in a glass bottle and be well dressed to justify the premium price. Beo* concurs.

Historically, pubs, bars and restaurants around the world have not always given soft drinks the respect they should have. These grown-up soft drinks are positioned to address this gap in the market. The choices of soft drinks in restaurants around the world are evolving, but quite often you are struggling if you do not fancy a cola, a sparkling water or an orange juice. It was certainly one of the factors behind the success of smoothies which, in many cases, came to prominence in cafes and bars and gained popularity because they provided a soft drink alternative.

It is not just the on-premise channel where people have to make the choice between soft and hard. The dinner party scenario is another such occasion where conscientious hosts may want to offer their guests something a bit more erudite than the usual sparkling water or traditional soft drink assortments. Design is key and the bottle must sit stylishly on a table next to the wine and not look out of place.

This ‘adult segment’ of the market will not be high volume and the number of occasions that they are appropriate to are relatively limited, thereby making them niche. The high price commanded by these products and the margin will be attractive to both companies, as will be the likelihood that their portfolios will be more attractive to on-trade retailers.

I wish both Tumult and Beo* well, because all beverage innovation should be applauded and rewarded. It makes drinking more interesting and ultimately makes my work more stimulating.

Sectors: Soft drinks, Water

Companies: Carlsberg

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Comment - Soft Drinks & Water - A Bit of Corbett

Each month, Richard Corbett casts his eye over the soft drinks & water categories.

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