Following the retirement of our soft drinks & water commentator, Annette Farr, at the end of last year, just-drinks has doubled up. Starting this month, we have two new columnists considering the state of the soft drinks & water categories. First up, Ray Rowlands from market research firm DrinksInfo takes a look at the opportunity afforded to low-calorie and no-calorie variants. However, the opportunity is marked by perils and pitfalls, Rowlands believes.

CSDs are taking a lot of flak these days. To start with, they are facing increasing competition from a rising wave of alternative beverages, such as the so-called 'New Age' drinks, 'Near Waters' plus a plethora of fashionable functional offerings. That's in addition to the threat from more established beverages such as bottled water, iced tea and juice plus sports and energy drinks, all of which are attempting to lure the consumer.

But, carbonates still remain the backbone of the soft drinks industry. Four out of every ten litres of soft drinks consumed across the globe is a CSD. That sounds impressive, but it’s still something of a climb-down from the volume share they enjoyed at the start of the last decade. In truth, CSDs have hit a bit of a stumbling block; they're losing market share and are struggling to add volume as much of the world emerges from the grip of recession.

A key influence on the future fate of CSDs is the increasing consumer interest in health issues, especially in respect of the problem of child obesity. This is unsurprising when one considers that, according to the results of an OECD report published five years ago, 30% of the population of the US is considered obese. Whether such findings are an accurate representation of the problem, obesity is now an accepted cause for concern, and is considered one of the biggest threats to child health.

The above-mentioned report came out at about the same time that a clampdown on the selling of soft drinks in schools began to pick up steam. In California, Mayor Schwarzenegger was seen to be at the vanguard of this movement when it was announced in 2005 that he would be banning soft drinks from California high schools. However, the movement has since gone global with the likes of Australia, Mexico and the UK voicing similar disapproval. To their credit, the likes of Coca-Cola and PepsiCo have tended to support this policy.

It is just unfortunate that the focus for concern tends to be concentrated on CSDs rather than other soft drinks. This is likely to remain an ongoing dampener on category sales when there are so many perceived healthier beverage choices available to the modern consumer.

But, consumers do have a low-calorie option when choosing a CSD. 

Low-calorie/diet carbonates have been raising their profile, resulting in a general shift in their favour in recent years. Their category share still maintains only a minority position, however, on the global playing field. Only around one in every seven litres of carbonates sold around the world is low-calorie. This is despite the well-publicised introductions of variants like Coke Zero, one of Coca-Cola’s biggest launches in many years. However, the rate of low calorie penetration varies significantly region by region, being highest in North America, Western Europe and Australasia.

With the carbonates category showing symptoms of maturity in many established markets around the world, and where health issues are playing an increasing role in product choice, the low-calorie segment would seem to fulfil an important task in maintaining consumption levels. The industry had hoped to see growth in low-calorie brands help to offset the decline in regular, sugar-sweetened carbonates so frowned upon by the anti-obesity lobby. Unfortunately, low-calorie products are not without their opposition and have also become a source of concern. It’s a case of damned if you do and damned if you don’t.

For years, low-calorie carbonates have been portrayed as the 'healthier' choice because they contain no/low calories, being typically sugar-free but artificially sweetened. Aspartame is one of the most commonly-used artificial sweeteners. Indeed, low-calorie drinks are often seen as synonymous with the use of aspartame. But, other sweeteners are also employed, such as saccharin, which came into vogue after cyclamates was banned in the US, and acesulfame-K. An emerging category sub-segment employs alternative sweeteners or natural sugar substitutes using ingredients such as stevia, Reb-A, Truvia, and PureVia.

However, low-calorie sweeteners do not come without reported risk. Aspartame has been the subject of debate since it first became an ingredient in food products 30 years ago, being reportedly linked to causes of illness and toxic reactions. Saccharin and acesulfame-K have similarly been framed in controversy. New research presented as recently as February this year points to evidence that links these low-calorie beverages to vascular events including heart attack and stroke.

It would appear from the fact that low-calorie carbonates are struggling to expand their overall influence that consumers are certainly becoming more aware of some of the less healthy (perceived or otherwise) ingredients being used within low-calorie products. Meanwhile, studies have also tied both low calorie and regular carbonates to greater risk of diabetes and other weight-related problems. 

With the caramel colourings in cola also now under attack, is it time for the carbonate industry to shut up shop? Far from it. There are two multinationals (at least) who have a strong commitment to keeping the industry very much alive. Meantime, as the debate over the ingredients of CSDs continues to cause tension, innovation and consumer education will prove invaluable weapons in combating the negative publicity surrounding low-calorie offerings.