The soft drinks and water industries hailed the beginning of the 21st century as a brave, new world for the two categories. Looking back, Annette Farr hails the major role played by innovation over the last ten years, and considers the perils and pitfalls for NPD moving forward.

It has been a roller-coaster decade. When Britvic Soft drinks published its category report in 2000 the company's CEO, Paul Moody, confidently asserted: “1999 was a vintage year but 2000 will be the start of the soft drinks era.” He believed the next ten years promised to be the most interesting and dynamic decade yet in the history of soft drinks. At the time, it was felt that consumer attitudes and drinking habits, coupled with the innovative zeal of manufacturers and distributors, would lead to greater consumer choice and a diverse vibrant world industry.

The decade kicked off well, fulfilling Moody's prophesy. In the UK and elsewhere, year-on-year value and volume grew, buoyed by the phenomenal rise of bottled water, some record-breaking hot summers and a new breed of young soft drink entrepreneurs using nutritional, exotic ingredients and flavour combinations. The drinks they developed not only tasted good, but offered added functionality for a health-conscious consumer, fast becoming ubiquitous. Health and wellness drinks had arrived.

Some mainstream brands were caught unaware. The Coca-Cola Co, in particular, had some catching up to do, but by the end of the decade companies large and small had embraced the need to produce drinks that were low in calories, refreshing, hydrating and healthy. Concerns over obesity have been addressed as have additive issues, resulting in recipe makeovers and the emergence of all natural ingredients, including sweeteners such as stevia.

Yet growth stalled in 2008, as the arrival of the global recession affected consumer buying habits. Two poor summers didn't help either. Consumers sought comfort in the established and trusted brands of yesteryear rather than the new and exotic. Bottled water was felt an unnecessary luxury and harmful for the environment ; sales of smoothies, arguably the stars of the decade, drastically fell away whilst carbonates, which had been in the doldrums, were back in favour.

Throughout the decade, though, functionality spearheaded new product development, with sports and energy drinks surviving unscathed and new categories such as shots and relaxation - or anti-energy - drinks emerging. Although a niche product, relaxation drinks are spreading across shelves in several major economies. According to the Mintel GNPD database, there were 150 relaxation drink launched in 2009, compared with 93 in 2008. The US is market leader, but other countries are also embracing the concept including the UK, Japan, and France.

So where to next? Given that functionality, health and wellness are driving NPD, the future is difficult to predict since new European legislation and US lobbying covering nutritional and health claims are likely to take the sting out of entrepreneurial tails.

In Europe, it has been reported that the European Food Standards Agency (EFSA) has rejected some 70% of dossier submissions relating to The Nutrition and Health Claims Regulation. The new EU legislation, although aimed at providing assurance to consumers that any health claim a product makes is true and based on sound, substantiated science, is mired in confusion; claims that have historically been taken for granted in many countries are now under scrutiny and being rejected.

For example, Belgian ingredients giant the Beneo Group says the rules favour ‘active’ health claims such as phytosterols, while discounting ‘passive’ claims such as those that replace ingredients with healthier versions to make products healthier.

It seems inevitable that the long, protracted and expensive approval process being demanded by the EFSA will deter the development of new drinks with a functional health proposition.

In the US, the Center for Science in the Public Interest (CSPI) has been keeping a watchful, litigious eye on health claims. The campaigning organisation has sent the Food and Drug Administration (FDA) a report that documents examples of “false claims, ingredient obfuscations, and other labelling shenanigans” in a further move to crack down on false and misleading drinks labelling.

According to the CSPI, culprits include: Minute Maid's claim that its orange juice fortified with glucosamine hydrochloride can help prevent or treat arthritis as implied on the label ; Glaceau Vitaminwater 's double-column nutrition facts panel which gives the impression that a 20-ounce bottle of Vitaminwater contains multiple servings (yet the product is typically consumed by one person on a single occasion, delivering 125 calories, not the 50 in a 'serving'); and Gerber Graduates Juice Treats' label which depicts oranges, grapes, peaches, cherries, pineapple and raspberries, yet there is no cherry, orange, or pineapple in the product, and less than 2% is raspberry and apple juice concentrate.

"For far too long, some of the world's biggest food manufacturers have designed their labels either to exaggerate the amount of healthy ingredients, or to imply that the food has magical, drug-like qualities that could prevent or treat various health problems," said CSPI legal affairs director Bruce Silverglade. "The Bush Administration gave manufacturers more and more license to deceive. But the party’s over—or at least it should be."

CSPI’s proposals come as the FDA is engaged in a public consultation on changing the nutrition facts panel in order to make it easier for consumers to understand and to make informed choices about the nutritional content of their diets.

Of course, consumers should be protected from rogue and erroneous claims, but, arguably, few consumers truly believe that the pomegranate juice they drink will mitigate against a heart attack. It's just comforting to know that what you are drinking is flavoursome, refreshing, hydrating and, moreover, could be doing your body some good.

When Muhtar Kent, Coca-Cola's CEO, addressed investors and analysts to discuss the company's '2020 Vision and Roadmap for Winning Together' last November he stressed the importance of innovation. "We know that winning in 2020 and beyond is going to require new capabilities, new models and new innovations,” he said. “To target ageing and affluent consumers globally, we are actively exploring new ingredients, new functionality and new occasions.”

So watch this space as the twenty-tens - or teenies - unfold – so long as legislation allows, that is.