Annette Farr

Comment - Soft Drinks & Water - The Farr Goodbye

By Annette Farr | 14 December 2010

Today is a very sad day here on just-drinks, as we bid a very fond farewell to our soft drinks and water expert, Annette Farr. Annette, we'll miss you. Enjoy your retirement. But, before you go...

I've been writing about soft drinks for more years than I care to remember, but for just-drinks my tenure has been a mere seven. But, it's time now to hang up the proverbial hat, or should I say put the cap back on the bottle after downing the last dregs of fizzy pop, and take a moment to mull whether my glass has been half full or half empty.

Olly has suggested my last piece be a look back at the good - and the bad - changes that have occurred during my time in the industry. With apologies to Sergio Leone, I am also going to be adding 'the ugly'.Happily there's masses of good stuff. With health and wellness having dominated new product development, the industry has seen a huge shift away from cheap and cheerful sugar-laden, artificially flavoured, beverages to drinks with product integrity and a nutritional content.

This move has been particularly prevalent amongst children's drinks. Producers have revised recipes, increased fruit content and eliminated the use of artificial preservatives, colourants and flavourings. Many now carry the claim of being 'one of your five' a day and are school compliant. Governments' nutritional advice that we should all aim to consume five portions of fruit and vegetables a day has indeed been pivotal in NPD. Children have never drunk more healthily - especially in schools - and yet, alarmingly, obesity figures remain high.

Functionality, the buzz word at the turn of the millennium, continues to move the industry forward into largely uncharted waters. With a health-conscious, ageing population destined to overtake all other demographic sectors, soft drinks producers have myriad opportunities to explore, such as drinks aimed at lowering blood pressure and improving heart, eye, brain, cognitive and joint health.

For the sporting, there have been huge developments in nutrition drinks, using amino acids and whey proteins and, for those who like to party, the energy sector has matured with a new category - the shot.

We have also witnessed the rise of bottled water, inconceivable as that still remains to some. In fact, we have seen the rise and fall, and now rise again of a sector which 15 or so years ago was niche, limited to table top bottles of the naturally sparkling Perrier.

Bolstered by some record breaking hot summers in markets like Western Europe, the odd municipal water scare and the healthy hydration message filtering through to consumers, the 330ml PET bottled water has become a life-style accessory.

The recent backlash, principally on environmental grounds, has subsided as bottled water producers promote their environmental credentials - lighter bottles, use of recycled PET (rPET), care and nurture of the land from which the water is sourced, along with corporate social responsibility initiatives in third world countries where water is scarce. Bottled water, along with water plus functional additions, remains the preferred choice of soft drink for many.

Indeed, choice has been a true force for good and the soft drinks industry has it in spades.

Although orange remains the number one flavour, new superfruits and berries - acai, goji, pomegranates, for instance - rich in antioxidants and developed into drinks by young entrepreneurs have injected the juice category with exotic, flavoursome and healthy refreshment. All-natural has become the category's mantra and with a new all-natural sweetener - stevia - on the block, there is likely to be more revision of formulations.

An entrepreneurial spirit drove the industry's growth in the early 2000s, shaming Coca-Cola and PepsiCo, who for many years were happy to rest on the profitable laurels of their colas and flavoured carbonates. When carbonates stagnated on the back of a new health-conscious consumerism, PepsiCo edged ahead of Coca-Cola with the launch of the bottled water Aquafina and sports drink Gatorade. Coca-Cola subsequently played catch-up by acquiring niche brands and developing its own bottled water, Dasani, and sports drink Powerade.

While the launch of Dasani in the UK proved dire for Coca-Cola, the saga alerted the public to the differences between purified water from a municipal supply and natural mineral or spring water bottled at source.

The industry also scores good marks when it comes to climate change and green issues.

Innocent, for one, has been a pioneer on sustainability. All major players have developed long-term goals to reduce their carbon footprints. Coca-Cola and PepsiCo have extended their cola wars with a green flavour, each company looking to outdo the other on environmental initiatives as they jumped on the green bandwagon.

It is regrettable that Coca-Cola and PepsiCo, with the might, muscle and machinery attached to being the world's leading brands, missed a huge opportunity to advance and promote the use of ethical materials and sustainable packaging. When Innocent was introducing its 'sustainability squad' in 2006, Coca-Cola and Pepsi were embroiled in pesticide scares in India.

It is rather ironic, then, that Innocent should now be part-owned by Coca-Cola. One memorable quote from Innocent founder Richard Reed, when I asked in May 2006 whether he and his partners would ever sell their smoothie company was "We're not really on that path. We care passionately about what we do and there's a long, long way to go on building our business on ethical lines. We have absolutely no plans to sell," adding "I am not anti-big business, just anti-bad business."

Hmmm.

Driven by an entrepreneurial spirit the industry is ever evolving, despite the challenges thrown up by the global recession. Although purse strings are being tightened with consumers buying more own label and cheaper variants - such as forsaking 100% pure juices for juice drinks - interesting new beverages are still being launched. Soft drinks remain the leading category in grocery in many markets in the west, with substantial new opportunities emerging in developing markets such as China, India, South America and Africa.

In the on-trade, however, non-alcoholic drinks are still not being given their due: still hidden behind counters, not being displayed or promoted, with choice limited to the usual suspects of J20, cola and fruit carbonates. The sad demise of Pepsi Raw serves as testament to how the on-trade has not moved with the times.

It's been a hugely exciting industry to cover, but there are a few things that will not be missed: scaremongering headlines from the national press with biased reporting; messianic marketing executives who take hyperbole to a new level (I recall the trade press launch of diet Coke with lemon as being particularly memorable); press releases full of PR puff, and the excessive use of terms like 'unique', 'innovation', 'iconic' and 'gatekeepers' for parents or guardians.

Now, that is ugly.

Sectors: Soft drinks, Water

Companies: PepsiCo, Innocent, Perrier, Coke

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