Health and wellness a priority in developed beverage markets

by Keith Nunes
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Positioning a juice product as premium or adding a functional benefit may help juice manufacturers improve sales in developed markets.

 

LAS VEGAS — The global beverage market is splitting into two distinct macro markets. Consumers in emerging markets are demanding big brands and traditional products such as carbonated soft drinks. In developed markets it is becoming all about health.

Noting that global carbonated beverage sales rose by $72 billion between 2008-13, Ewa Hudson, the director of health and wellness for Euromonitor International, London, said there is a dramatic split in growth, with 95% coming in emerging markets and 5% occurring in developed markets.

“In the next five years it will look similar, with $100 billion in growth and 95% in emerging markets and 5% in developed markets,” she said.

Ms. Hudson was speaking Oct. 8 at the SupplySide West tradeshow in Las Vegas.

She said that while there is tremendous growth potential in emerging markets for beverage manufacturers, health and wellness trends that are established in developed markets may work their way to emerging markets.

“What part of our (the consumer’s) soft drinks budget is spent on healthy drinks when in a retail outlet?” she asked. “Thinking of the global consumer in 2013, 49% at this point is generated by health and wellness drinks. Consumers are looking for benefits.”

On-trend beverages include those targeting such categories as general well-being, weight management, energy and endurance.

“Water, ready-to-drink tea and juice will generate 65% of new sales by 2018,” Ms. Hudson said.

Reformulating juice products using stevia may be an option for manufacturers, as PepsiCo, Inc. did with its Trop50 brand.

Category trends

But she added that while juice is perceived as naturally healthy, some products contain a lot of sugar and that fact is backfiring against manufacturers in some markets.

“A glass of juice is a treat rather than a healthy choice,” she said. “North America juice consumption is in decline as well as Australia.”

Positioning a juice product as premium or adding a functional benefit may help juice manufacturers improve sales in developed markets. She cited the GoodBelly brand of probiotic juice drinks manufactured by Nextfoods as an example of one such effort.

Ms. Hudson added that reformulating juice products using stevia also may be an option for manufacturers. PepsiCo, Inc.’s Trop50 brand of juices is an example, she said.

Another option may include the blending of juices with coconut water.

“Coconut water prices are coming down and we are seeing diluted formats selling cheaper,” Ms. Hudson said.

The Vita Coco coconut water brand offers an acai and pomegranate blend while Pom Wonderful also offers a blend and the London-based retailer Sainsbury is offering acoconut water, summer fruit blend.

Despite negative news coverage during the past few years, Ms. Hudson said the energy drink category is poised for growth. Euromonitor forecasts the category will grow at a 7.4% compound annual growth rate between 2013-18.

“In some markets, energy drinks are shifting from their use as an occasional energy boost to everyday tiredness reduction,” Ms. Hudson said.

Noting that the Red Bull and Monster brands are the dominant global players, Ms. Hudson added that local manufacturers will play a role in the category’s continued growth, because they are able to react more quickly to trends in specific marketplaces.

Moving forward, Ms. Hudson forecast that beverages focused on health and wellness will outperform the wider soft drinks industry. Interest in developed markets will drive growth as emerging market consumers may also shift their preferences in the future.
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