The rise of no and low-alcohol adult soft drink options are gaining traction amongst consumers, with complex flavours made from natural ingredients. Sales of soft drinks have increased in value by £5m to £167m a week in the UK alone, since the soft drinks sugars levy came into force on 6th April 2018, according to IRI (research and market data company). In the diabesity epidemic battle, higher prices have increased soft drink sales, pushing consumers to make more mindful purchases they perceive to be healthier. This, combined with increasing good weather in the northern hemisphere, has reiterated healthier, thirst-quenching choices.
As drinking turns more mindful, we look at what is driving the soft drink trends:
Millennials and the Experience Economy
The experience economy is a long-term structural change driven by the need to sell more memorable experiences. It is powered by millennials “who are currently retailers’ largest demographic” according to Matthew Shay, President and CEO of National Retail Federation in an article for Forbes. They have grown up in a society where ‘ownership’ is no longer as important to them. The largest retail store Amazon, Uber and Airbnb are just three of some of the large companies we may use, yet neither own items, vehicles or hotels.
People are moving away from collecting “things” to “experiences” as investing in ourselves becomes the number one priority. This is said to help shape our identity. It is reshaping the food and beverage industry, pushing brands towards innovative and exciting new concepts. This has sparked curiosity amongst consumers and pairing familiar ingredients with more unfamiliar ingredients. Example combinations include: rhubarb and cardamom, raspberry and ginseng, orange and hibiscus, strawberry and Matcha and mango and turmeric. These experience-led trends are further driven by consumer ‘fear of missing out’ (FOMO), which continues the surge in pairing together the weird and wonderful.
With consumers’ ability to scan QR codes or barcodes, product information is now readily available at our fingertips. With numerous product recalls and scandals in the media, trust in manufacturers and regulatory systems are diminishing and therefore brands face clean label challenges to improve product transparency. Companies are taking proactive measures to reassure consumers about the safety and efficacy of their products. This has led to an increase in natural, ethical and environmental claims.
Through digitalisation and smart technology, we are also becoming more connected to our health than ever before with fitness apps, trackers and artificial intelligence. Not only are we collecting data on ourselves, brands are collecting data on us to help improve products, customer service and marketing. Brands want to create like-worthy and share-worthy products that will heighten consumer engagement. Vibrant coloured and texturised will continue to be trendy as we continue to “eat with our eyes.”
Tea and Teetotalism
With events such as ‘Stoptober’ and ‘Dry January’ becoming more and more popular, teetotalism is on the rise, with health being a macro trend driver. Health continues to define trends in soft drinks with less sweet beverages and lower calorie drinks continuing to enter the market. The soft drinks market has opened a gap for the premiumisation of mature tastes to satiate functionality and sophistication, in which craft style sodas are gaining a lot of attention. These non or low alcohol craft-style drinks benefit from positive associations with unique flavours, high quality ingredients and most importantly accentuate small-batch production. Larger beverage companies can tap into this trend by acquiring smaller beverage brands.
With an increasing interest in a cleaner lifestyle and greater transparency in the products we buy, holistic nutrition is an area rapidly growing. Mental wellbeing is also just as important today as physical wellbeing. Gravitation towards added functionality remains strong as consumers seek an increased amount of stress-relief and self-care in our hectic, modern lifestyles. This has established the ‘mood-food’ trend. Ingredients such as lavender, chamomile, peppermint and green tea are being seamlessly integrated into airlines and restaurant menus to enhance overall wellbeing. According to Mintel, “Chamomile, lavender and lemon balm are leading herbs and spices used in global food and drink with relaxation purposes launched from September 2016-August 2017.”
As society becomes increasingly health conscious, blurred lines between sports nutrition merges into more mainstream brands, appealing to every consumer segment from active lifestyle nutrition for the whole family, to professional athletes. The category has advanced beyond powders and is now readily available in protein bars, soups, yoghurts, enhanced nut butters, RTD shakes or meal replacements.
Plant-based proteins have improved in palatability and consistency with advancements in technology, making them easier to formulate with. These vegan proteins are predominantly found blended into non-dairy beverages, as well as enhanced waters and smoothies. Pea, rice, pumpkin and soy are popular alternatives to whey and are being paired with indulgent flavourings as “permissible indulgence” becomes acceptable. The protein category is still yet to reach its peak and we will be sure to see newer vegan proteins, targeted more individually at consumer’s needs, paired with performance ingredients.
We are also seeing more natural energy drinks, with caffeine sources from natural ingredients. These can be derived from Black, Green, Oolong and Matcha teas. Cold brews, caffeinated cold drinks (waters, juices, squashes and iced-teas) will also continue to surge with tea’s added health benefits adding to its appeal. We will be going beyond simple hydration fuelling us with functional benefits, targeted at specific consumer needs in a bid to tackle a personalised marketing approach.
Fermentation of the Future
Fermentation is also still a hot topic, with pre and probiotics gaining traction in line with the digestive health trend. Kombucha, water kefir, vinegar sodas and cold-pressed juices are functionally making a stand out on the shelves. Could there be a future for more development of fermented foods like natto (a Japanese food made from fermented soy beans) and rejuvelac (fermented sprouted grains in water)?
Plant Nutrition Dominates
Plant-based waters are increasing in popularity. Innova Market Insights reporting a 25 percent CAGR in this emerging area of NPD between 2012 and 2017, compared with a 7 percent CAGR for the soft drinks category as a whole. The category is also becoming more premium as the interest grows in this category.
Citrus remains an all year-round popular flavour in line with the natural trend. Yuzu is also gaining attention. It is a small, yellow citrus fruit with a tart flavour which is being formulated into drinks, dressings marmalades, sorbets and vinegars. The ingredient is also seen in the beauty industry due to its aromatic flavour profile and high level of vitamin C it contains.
Herbs, Spices and Florals
The botanical trend is influenced from Chinese traditional medicine and Ayurvedic practice. They are being fused into craft sodas, kombuchas and juices potentially for their adaptogenic properties to counteract stress in the body. They also add sophistication to mixers, such as tonic waters which appeal to the mature beverage audience. Botanicals are also ideal for adding seasonality with delicate florals such as rose for summer and warm spices such as cinnamon and clove for winter.
This leads us to active ageing. As age increases, so do your nutritional needs. With a decreased immune function, the elderly are more susceptible disease and malnutrition. Cardiovascular and degenerative diseases such as diabetes, osteoporosis, cancer are all diet affected. According to the British Nutrition Foundation in the UK alone “life expectancy has doubled over the last 200 years.” The Gen X category and most notably, baby boomers are willing to pay for products that will enhance their lives. Whether its energy drinks, superfood shots, or vitamin boosts, these generations seek added functionality in the products they buy.
To find out how we can work with you on current and upcoming trends with our range of ingredient solutions, please email firstname.lastname@example.org.