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The soft drinks category in 2019 - just-drinks predicts

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In just-drinks' soft drinks & bottled water review of 2018, we looked back at the year just passed. But what is in store for 2019? We take a look into our crystal ball to predict the biggest news and trends for the year ahead.

Among the challenges and opportunities lined up for next year, the soft drinks category must get to grips with its questionable environmental performance in the eyes of consumers

Among the challenges and opportunities lined up for next year, the soft drinks category must get to grips with its questionable environmental performance in the eyes of consumers

  • Get your kombucha

They were all at in 2018, but that's not to say the kombucha ship has already sailed. With The Coca-Cola Co, Molson Coors, Kirin and Duvel Moortgat making moves into the fermented tea segment, we may be about to say farewell to kombucha's break-out year.

The bubble will continue to grow next year, especially as the sector gets to grips with some of its production issues. Humm Kombucha's patent-pending method of ensuring the fermentation process does not result in alcohol forming could be the game-changer for a soft drinks sub-category that has thus far failed to deliver on its potential.

Why is kombucha gaining traction with big drinks companies? - NPD trends

  • Health & Wellness - Find your niche

One of soft drinks' major successes in recent years has been to move away from its unhealthy reputation towards surfing the Health & Wellness wave. Hitched on the Millennial trailer, the wider category has found fertile ground in a consumer base keener to look after itself than generations that have gone before.

This better-for-you trend offers ample opportunity for finding an area of everyday life that can be improved for a drink. Getting a better night's sleep, for example, has become a priority for consumers, one that soft drinks companies are keen to capitalise on. By cross-referencing an opportunity such as this with ingredients (natural, please) known to provide a benefit, producers could secure some big wins next year.

How targeting night-time consumption will breathe life into CSDs - NPD trends

  • Buy to diversify

The Coca-Cola Co's US$5.1bn acquisition of the Costa coffee chain this year may not be the indication of a business strategy available to all - indeed, the group's 2018 shopping spree puts it in a field of one - but it still serves as an indicator for how to grow going forward. Moving beyond a category you're familiar with and, in Coca-Cola's case, branching into retail and supply carries risks, certainly. At the same time, securing exclusivity and controlling your brands all the way to the consumers' shopping baskets could bring huge rewards.

  • Incubate before it's too late

Soft drinks players large and small should familiarise themselves with the now-common M&A strategy that is the incubator programme. For the larger companies, setting up a separate M&A unit targetting start-ups reduces the risks both of getting an acquisition wrong and of over-paying, while start-ups should consider beautifying themselves to appeal to their bigger peers - not only to increase their brand's footprint but also to deliver on their own exit strategy.

From Diageo's Distill Ventures to Coca-Cola Amatil X - the just-drinks guide to incubator units, venture capital funds and start-up initiatives

  • Cross-category - Blurred lines

Time was when we were all clear about the categories in the drinks industry; beer, soft drinks, spirits, wine - job done. In recent years, however, the blurring of category lines has given the likes of store planners a headache: Where does this go? What about this? And this?

The can is now open and we can't go back to simpler times. The opportunity that this cross-fertilisation presents is already offering growth potential. Earlier this year, we highlighted hop-flavoured water. Now, where to put that on the shelves?

As consumers dial down the alcohol, could hop-flavoured water break new ground? - NPD trends

  • The 'C' word

As the likes of Constellation Brands and Molson Coors have approached the cannabis market with gusto this year, the soft drinks companies among us have been wary of getting too involved at this nascent stage. In late-October, speculation prompted The Coca-Cola Co to state that it "does not have any plans at this stage to get into this space" (although the speculation could have been self-generated, if only to test investor sentiment about such a move).

Cannabis has burst into the mainstream this year, with Canada becoming the first G7 country to legalise the drug nation-wide for recreational use. Expect others to follow in 2019. With that legalisation stretching to food and drink products in Canada next year, can the soft drinks category strike the balance between innovation for innovation's sake and a great-tasting cannabis-infused drink in time for the legal walls to come down?

Investors' tobacco fears for cannabis - The just-drinks Analyst

  • Prioritise the planet

Has the consumer finally grown an environmental backbone? The outcry in 2018 against plastic packaging would suggest so. Indeed, so loud has the anti-plastic voice become that, even with a lengthy track record of sustainability efforts, the soft drinks category remains firmly in consumers' sights.

Coupled with leaning towards Health & Wellness, the Millennial bracket are clearly not impressed with what has been done previously by the category to reduce its environmental footprint. Now, more than ever, there is no escape - until now, the best you could do was not good enough.

Grade D: Must try harder in 2019.

Why the soft drinks category is trapped in a plastic corner - Sustainability Spotlight


Sectors: Soft drinks, Water

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