The Future for Drinks - Part IV: Interview - Six Predictions for 20 Years' Time
Richard Hall is the chairman and founder of Zenith International, a food and drinks consultancy with around 1,000 clients in 50 countries. Here, we ask Hall what he expects the main influences will be on the drinks landscape in 20 years' time.
i - Ageing Populace
“In 20 years’ time, there will be a much larger number of older people, who will be seeking solutions and functionality in the products they want to consume, in preference to doses of medicines or supplements that they don’t want to consume. They will be looking more than ever for pleasure, convenience and benefits in their drinks, increasingly through aspects of functionality to address particular lifestyle concerns they may have. Ageing is going to be a major dimension for drinks manufacturers to take into consideration.”
ii - The Environment
“There are three main environmental aspects that will have an impact on the beverage industry in years to come. One has to do with energy costs, which will continue to rise. I believe pressure will build for more local production and distribution of beverages. The grand economies of huge factories will be offset by higher distribution costs. New packaging materials that reduce environmental impact will also be very important in 20 years. Whereas PET was a great discovery, I think that the new bio-PET experiments that are being driven right now by Coca-Cola, PepsiCo and Danone – where they are making beverage bottles from plant-based PET materials – are very exciting. Thirdly, recycling has to improve so that the average comes much closer to best practice.”
iii - Branding
Richard Hall,chairman and founder of Zenith International
“I think that supermarkets will become an increasingly strong alternative branding concept, which will place traditional brands under greater pressure – supermarkets are now some of the biggest spenders on developing their own brands. On the other hand, online retailing will provide a greater opportunity for brands to bypass retailers – take Nestlé’s Nespresso brand, for example [Nespresso espresso brewing machines and its accompanying varieties of ground coffee capsules are sold only at Nespresso stores and online on their website]. More concepts like this, with brands forging stronger links directly to consumers, will begin to emerge.”
iv - Information
“At the moment, we have various different pieces of equipment that deliver information to us, but in 20 years, I’m sure, all our sources of information will be integrated. Just as many news consumers have moved from physical newspapers to personally sourcing their news online, I think the drinks market will move to more personalised shopping as well, which will lead to more individualisation, and fragmentation of markets. So, bigger companies may have to break down their offerings even more from high quantity production efficiency to smaller, quality individualised choices for consumers. The challenge will be how to combine a lowest cost/highest efficiency model with products that are personalised.”
v - Differentiation
“Over the next 20 years, I sense the industry will move further beyond product attributes, such as taste, value and benefit, to greater promotion of a product’s social dimension. Consumers will more actively respond to the social benefits that a beverage has to offer. Is it organic? Is it ethically sourced? Are some profits being reinvested in the community? Young people today want to know how the products they are consuming have been made, and want companies to reflect their value beliefs.”
vi - Geopolitics
“Right now, China and Islam are still big unknowns in a world market context, but I think that both will have more influence on the global drinks market in 20 years’ time. China is a gathering force in the world economy, and Chinese companies will progressively make their way into the Western marketplace. The value sets that exist in the Western world and Asia will always be different, but I feel there will be more cross-over, with developing countries’ economies and cultures having more influence and impact on the world’s drinks market.”
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