Getting back to basics

by Keith Nunes
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Within the non-alcoholic carbonated beverage business it appears flavor innovation has taken a backseat to image and function. Information provided by Mintel International, Chicago, showed that of the new C.S.D.’s and carbonated energy drinks introduced in 2008, cola flavor and "unflavored/plain" were the most popular flavors introduced in each category.

Within C.S.D.’s, Mintel showed the top five flavors to be cola, root beer, pomegranate, orange and lemon. Within energy drinks the top five flavors included unflavored/plain, citrus, berry, orange and grape.

"A few years back a lot of (C.S.D.) companies focused on flavor innovation," said Gary Hemphill, managing director of the Beverage Marketing Corp., New York. "Some were successful while others were not, but ultimately they were not able to move the needle on overall volume. Basically, when there was a successful new flavor introduced it meant consumers would switch from one to another rather than add to volume."

While not directly linked to flavor, one area C.S.D. companies seem to be moving into is focusing on using ingredients in their products that are perceived to be wholesome or natural by consumers. In early 2008, PepsiCo, Inc., Purchase, N.Y., and Britvic Soft Drinks, Chelmsford, England, introduced Pepsi Raw in the U.K. market. Sweetened with cane sugar, the product was developed to capitalize on the growing consumer demand for products perceived as natural. The companies said their initial focus with Pepsi Raw would be upscale food service outlets.

The Coca-Cola Co., Atlanta, followed Pepsi’s lead later in the year when it introduced Sprite Green, a reduced-calorie line extension to the Sprite brand that is sweetened with Truvia, a branded natural sweetener derived from the stevia plant.

Manufacturers will continue to try to make C.S.D.’s seem healthier by reducing calories and sugar, according to Symrise’s Food and Nutrition Division in North America, Teterboro, N.J. The company sees more natural and organic options with higher juice content and fewer additives and preservatives. They also say cola looks set to remain the most popular flavor but more exotic flavors will be launched, many trialled as seasonal launches. In addition, traditional flavors will continue to grow in popularity with organic, natural and premium claims helping them to stand out in the market.

The energy beverage category has experienced dramatic growth since 2003, according to Mintel. The market has grown to $4.8 billion, which is up more than 400% since 2003. In 2003, only 9% of respondents to a Mintel survey said they drank energy drinks, and the number grew to 15% in 2008.

Today, 35% of teens regularly consume energy drinks, up from 19% in 2003. In 2003, there were only 80 new energy drink launches in the United States, according to the Global New Products Database, but this number jumped to 187 in 2007. So far in 2008 there have been more than 270 new energy drinks launched.

While the energy drink category has boomed during the past few years, Mr. Hemphill noted that the emphasis has been on product function rather than flavor.

"Energy drinks tend to be about the energy rather than the flavor," Mr. Hemphill said. "There has not been a lot of innovation as far as unique flavors. The marketing focus has been on the functional benefit and the taste of the products has almost been secondary.

"That can change, however. We are seeing hybrid products coming to the market such as ‘bridge’ energy sodas and energy coffees where taste will become more important. But the rational for buying these products has been for the benefit of the energy."

This article can also be found in the digital edition of Food Business News, February 3, 2009, starting on Page 24. Click
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