Almost half of UK consumers intend to spend on Valentine’s Day this year or have already started to spend on it. This is an uplift on 2024 and has been driven by those aged 25-34. With this age group more likely to have young families, consumers plan to buy for partners and significant loved ones such as children and friends. Retailers have the opportunity to utilise the popularity of this occasion among these shoppers to encourage larger basket sizes and boost average spending, according to GlobalData, a leading data and analytics company.
GlobalData’s latest report, “Retail Occasions: Valentine’s Day Intentions 2025,” reveals 69.3 % of UK 25–34-year-olds intend to spend on this occasion, marking a 7.8 percentage points (ppts) uplift on 2024 intentions. This age group will account for almost a quarter of Valentine’s Day shoppers in 2025, meaning this is a core target demographic for retailers.
Zoe Mills, Lead Retail Analyst at GlobalData, comments: “Intention to spend on Valentine’s Day is high, but few consumers have started to spend on this occasion so far in January, meaning retailers still have plenty of time to entice shoppers to purchase. The grocers are in the best position, with the intention to spend the highest among the food & drink and gifting categories. Romance-themed meal deals including prosecco/champagne, should be promoted at the front of stores.
“However, with the target audience likely to have children, retailers should also include Valentine’s Day-themed products that appeal to a much younger audience. Retailers should emulate Marks & Spencer’s range, including items like Love Hearts Biscuit Kits, enabling adults and children to decorate heart-themed biscuits.”
While partners are the main recipients among Valentine’s Day gift shoppers, more consumers intend to spend on their children for the event, highlighting that this occasion is not just about romantic love but also familial love, coupled with self-love and the appreciation of one’s friends.
Mills continues: “There is ample opportunity for retailers to broaden their reach with this occasion and ensuring a variety of more generic love-themed designs will enable their products to be gifted to a broad range of recipients. 11.9% of Valentine’s shoppers intend to purchase gifts for friends, up 3.2ppts on 2024. This trend is driven by Gen Z consumers, with 59% of this generation stating that Valentine’s Day is not just an occasion to treat their partner and that they like to buy gifts or cards for other loved ones. Events such as Galentine’s Day parties, celebrating friendship, may still be niche but must not be ignored by retailers.”
GlobalData expects that food & drink gifts will be the most popular among Valentine’s Day shoppers, and retailers must ensure plenty of food & drink gift sets to appeal to shoppers, focusing on confectionery and alcoholic drink gift sets.
Mills concludes: “Retailers must focus on food & drink gifts, where the intention to spend is high. The higher intention to spend on these items also implies that Valentine’s Day gifts are more of a token than an excuse to splurge on premium options such as fine jewellery, and retailers must ensure a broad pricing architecture to appeal. Flowers are also an accessible option for male Valentine’s Day shoppers, and providing a broad range to cater to different colour preferences is crucial. Red roses or red & pink bouquets should not be the only options; fun and colourful bouquets could appeal to those looking for something less traditional and more generally to those seeking these gifts for friends.”
The study looks at how the use of cannabis is impacting consumption in key food and beverage categories in key markets.
GlobalData’s new “Hot Topics” cannabis study on the claimed consumption behavior of cannabis users compared to non-users highlights that this is a large and growing consumer group, who are behaving differently to the general population, in ways that brand owners and their stakeholders may not fully realise.
Jenny Questier, Consumer Analysis Director at GlobalData, commented: “Currently, there is little research data or analysis available to help companies understand the impact of a new cohort of cannabis users in consumer packaged goods markets where the drug has been legalised. While this study’s findings are indicative, they could apply to any market where cannabis use is prevalent as they do provide some useful insights into the impact that cannabis users consumption behavior could have on product choices being made in key food and beverage categories and which demographics are important in future product development and positioning.”
The study entitled, “Hot Topics Report: Impact of cannabis use on consumption in key markets”, provides a top-line indication of how consumers who claim to use cannabis, describe their use of the drug in five key markets which have legalised the recreational use of the cannabis, namely: the US, South Africa, Canada, Mexico and Germany, and the claimed impact this may have on consumer consumption in the alcoholic drinks, non-alcoholic drinks, savory snacks, and chocolate and confectionary categories in each of these markets.
The study reveals that cannabis users have a tendency to stay at home more, are more concerned about their physical and mental health, spend more time online, and perhaps as a consequence of this, order more food online, when compared to non-cannabis users. Interestingly, the known side effects of cannabis use of increasing hunger and thirst are significantly impacting on consumers’ net consumption of non-alcoholic beverages, savory snacks and chocolate and confectionary, however, the drug’s use currently seems to have a limited impact on alcohol consumption overall.
This is an important cohort for consumer packaged goods companies because the number of recreational cannabis users is already significant and is set to grow further. In the US, cannabis is legal for recreational use in 24 out of 50 states, according to the *Pew Research Centre. In the US, there were an estimated 17.7 million daily cannabis users recorded in 2022, according to research published in the journal Addiction, based on data collected by the National Survey on Drug Use and Health.
Questier continued, “In the coming decade, the number of cannabis users is set to grow globally as more US states are likely to legalize recreational cannabis use, public support may lead more countries to do the same, and more people are likely to take up the habit as a means of relaxation, enjoyment, and for perceived health benefits. It is imperative that brands and manufacturers of food and beverages understand what this may mean for future innovation and target consumer groups.”
Here are some of the top-line indicative findings from the study for each food and beverages category surveyed in each market:
Alcoholic and Non-alcoholic Drinks
Cannabis use does not appear to have a significant impact on alcoholic drinks sales!
Claimed alcohol consumption remains largely unchanged overall as a result of cannabis use, generally holding steady at a plus or minus 1 % net change in most markets. Canada and Mexico have a small net decline in alcohol consumption with Germany’s high + 10 % net change attributed to a smaller sample size as cannabis has only recently been legalised in the country, and reported use remains relatively low.
An assumption that alcohol sales overall might suffer from the increased use of cheaper cannabis products as the stimulant effects are similar is not evident from this study. However, that’s not to say that the alcoholic drinks market isn’t changing; female cannabis users are drinking less alcohol, but males are drinking more.
Cannabis use makes you thirsty for non-alcoholic drinks!
All markets in this study saw a significant rise in the consumption of non-alcoholic drinks by cannabis users. In some markets, this rise occurred among all demographics, in other markets younger consumers dominated.
Savory Snacks and Chocolate & Confectionary
Cannabis use gives you the munchies, boosting savory snacks sales!
All markets saw a rise in savory snack consumption due to cannabis use; North American markets had particularly large rises. Unlike beverages, Gen Z do not dominate savory snack sales, instead it is older Gen Y and Gen X consumers.
Cannabis use gives you a sweet tooth, increasing chocolate & confectionery sales!
Cannabis use drives a significant rise in chocolate and confectionery consumption in most markets, although the demographic leading this varies from market to market.
Questier adds: “The top-line results from this indicative study show that cannabis users’ consumption behavior is different from other consumers. Consumption of soft drinks, savory snacks and chocolate and confectionery is significantly increased, with the balance between male and female, and young and old consumers shifting in each market. Whilst there is limited claimed impact from cannabis users on total alcohol consumption, the demographic make-up of this market is nevertheless changed by the presence of cannabis.
“With little research conducted into this area to date, the study’s indicative findings suggest that the implications of cannabis use for consumer packaged goods companies and their stakeholders could be significant for brand strategy, consumer targeting, portfolio management, innovation, sales, advertising, and marketing. Further research by brand, category, and geography could be required to ensure that these implications are understood and appropriate strategies devised to manage them.”
Free sample pages from the “Hot Topics Report: Impact of cannabis use on consumption in key markets”, are available here
*Source: Pew Research Centre: here
The Indian soft drinks sector is currently experiencing a notable disruption due to the price war initiated by Campa Cola. With the incumbent market leaders, Coca-Cola and PepsiCo joining the price war, it is an all-or-nothing war for a share of the consumer’s wallet in the Indian soft drinks sector, says GlobalData, a leading data and analytics company.
Parthasaradhi Reddy Bokkala, Lead Consumer Analyst at GlobalData, comments: “The Campa Cola brand, once a common sight across India when Coca-Cola and PepsiCo did not operate in the country due to regulations, was revived in 2022 by Reliance Retail. Backed by the deep pockets of its parent, Reliance Industries, the company embarked on an aggressive pricing model to capture market share.
“With the INR10 (USD 0.12) price of a 200 ml cola bottle and INR 20 (USD 0.24) for a 500 ml bottle, Campa Cola has undercut PepsiCo, Coca-Cola, and other companies’ prices by 50 %, as 200 ml bottles of colas are generally available at a price of INR20 (USD 0.24). To counter this, Coca-Cola and PepsiCo launched promotional pricing for their larger bottles. This led to a lull in the price war as Campa Cola’s distribution reach was still low.”
Francis Gabriel Godad, Consumer Business Development Manager, GlobalData India, notes: “The impact on market leaders Coca-Cola and PepsiCo’s market share was low due to the lack of distribution reach for Campa Cola. Thanks to the gradual increase in Campa Cola’s distribution reach, the situation changed in recent quarters as the aggressive prices and expanded distribution disrupted the operations of Coca-Cola and PepsiCo. The two companies have been forced to withdraw from the status quo and increase promotions on their products. For instance, Coca-Cola recently launched a 350 ml bottle (150 ml free) of its flagship Coca-Cola brand at INR 20 (USD 0.24).”
Godad continues: “The predatory pricing has also affected the volumes of non-cola categories and brands. For instance, PepsiCo’s Tropicana and ITC’s B Natural brands suffered volume losses due to the expanding price differential between nectars and colas.”
Reddy concludes: “The price war in the Indian soft drinks sector is a multifaceted issue driven by aggressive pricing strategies, shifting consumer preferences, economic pressures, and a growing focus on health. As companies continue to adapt to these dynamics, the competition is likely to intensify, with potential long-term implications for brand loyalty and market positioning. With all the major players having deep pockets, the market is in for a long-drawn price war, which can lead to a consolidation in the market, as smaller players may not be able to sustain in a long-drawn price war.”
The demand for low- and no-alcohol drinks is on the rise as consumers increasingly seek healthier alternatives and choose sobriety to better enjoy their social moments. The increase in demand for these beverages during the Christmas season is particularly noteworthy, as it highlights the growing acceptance in a time when drinking is considered part of culture. Aligning with these new developments, a survey showed that 45 % of consumers sometimes or regularly drink low or no-alcohol beverages*. As such, the alcohol avoidance trend is expected to continue in the UK during the festive season, according to GlobalData, a leading data and analytics company.
According to GlobalData, the “alcohol avoidance trend” is expected to drive the UK non-alcoholic beverage market over a £500 million category in 2024, representing a double-digit growth from the previous year. The no- and low-alcohol beer market in the UK is projected to grow by 15 %.
George Shaw, Beverage Analyst at GlobalData, comments: “The moderation movement has led to the creation of alcohol-free alternatives and increased competition in the soft beverage market. In the UK, Almave Bianco, introduced by Lewis Hamilton’s Almave, represents a significant step in the non-alcoholic spirits market of growing demand for high-quality non-alcoholic beverages that mimic traditional spirits.
“The association with Lewis Hamilton brings aspirational branding and credibility, resonating with fans of the sport and lifestyle. This targets health-conscious consumers and those embracing the sober-curious movement, especially Gen Z and Millennials seeking alcohol-free alternatives for social occasions.”
Cornish craft brewer Firebrand introduced Little Wave, its first non-alcoholic lager, designed to deliver a smooth, clean profile while maintaining the quality and craft part of its traditional offerings. This appeals to consumers seeking alternatives for social drinking while reducing their alcohol intake, aligning with the mindful drinking trend.
Shaw adds: “According to GlobalData Q3 UK Consumer Survey*, it is evident that the demand for low and no-alcohol drinks is prominent. This indicates a significant shift in consumer preferences towards healthier options. The change is likely driven by a combination of factors, including health consciousness, the desire for more inclusive social experiences, and the availability of high-quality options in the market.”
Tesco has also reported strong performance in the no- and low-alcohol beers segment, with a 20 % year-on-year increase in sales of those drinks in multi-pack sizes and a 15 % surge in demand during the four weeks leading up to Christmas.
According to the GlobalData Q3 UK Consumer Survey, 77 % of UK consumers consider how a product or service impacts their health and well-being to be of somewhat, often, or always influence. By incorporating this insight into their marketing strategies and product development, alcohol brands can better position themselves to meet the evolving demands of consumers and capitalize on the growing market for low and no-alcohol drinks.
Shaw concludes: “The rise in demand for low and no-alcohol drinks is a significant trend that alcohol brands cannot ignore. With consumers increasingly opting for healthier alternatives and prioritizing their health and wellbeing, it is crucial for brands to adapt and provide options that cater to these changing preferences.”
*GlobalData’s UK Q3 2024 Consumer Survey was conducted with 505 participants
European Cider Trends 2024 is a collaboration between GlobalData and the European Cider and Fruit Wine Association (AICV) in producing a guide that demonstrates the current key markets for cider (which includes perry, fruit flavoured cider and in some countries fruit wine).
Although considerably smaller than the wine, beer, or spirits industries, it is nevertheless a fact that in recent years in some EU countries cider and fruit wines have enjoyed one of the fastest growth rates of all alcoholic beverages, underlining the continuous popularity of fermented fruit drinks down the ages.
Please download the European Cider Trends 2024 as pdf-file under https://aicv.org/en/news/2024-european-cider-trends
Collaborations between well-known brands, such as the recent Coca-Cola and Oreo partnership, are of mutual benefit to companies by way of sales and marketing promotion. The partnerships allow collaborating brands to leverage their existing fan bases and create a buzz around the product. As such, beverage companies need to innovate beyond their markets, as 65 % of global consumers say it is essential or nice to have a well-known brand when deciding to make a purchase*, says GlobalData, a leading data and analytics company.
In August this year, The Coca-Cola Company announced a partnership with Mondelez to launch a limited-edition cola with flavours inspired by Oreo cookies. As well as recently, the two global brands have released Oreo Coca-Cola cookies. This collaboration aims to celebrate the bond between the food and drink-based brands as they label themselves “besties” and offer consumers a unique and playful experience.
Similarly, Fanta, another brand under Coca-Cola, is rolling out a limited-edition apple flavour variant called Fanta Zero Afterlife. This launch is timed for Halloween and is part of Fanta’s Halloween activity. The packaging will feature Beetlejuice-themed designs, creating a strong association with Fanta and Warner Bros. Pictures brands.
George Shaw, Consumer Analyst at Globaldata, comments: “This marketing campaign aims to drive talkability and engage both Fanta and film fans. Moreover, these collaborations and limited-edition products are part of a larger trend in the beverage market, where companies are constantly looking for ways to innovate and attract consumers with unique offerings. By partnering with well-known brands or incorporating popular themes, companies can generate brand excitement and increase sales.”
By introducing limited-edition flavours, companies can create a sense of urgency and encourage consumers to try the product before it’s gone. The impact of these collaborations and limited-edition products is significant. GlobalData’s Q2 2024 Global consumer survey reveals that consumers value novel and unique features when making purchasing decisions and 60 % of them consider it essential or nice to have novel/unique features when deciding to make a purchase. This aligns with the strategy of Coca-Cola.
According to GlobalData, the global carbonates market is projected to reach USD 521 billion by 2029, and global companies are collaborating to capture market share.
Shaw adds: “This highlights the competitive nature of the carbonates industry and the importance of innovation and strategic partnerships. Coca-Cola and Fanta’s collaborations demonstrate their efforts to stay ahead in the market and attract consumers with unique offerings.”
Coca-Cola is not the only beverage brand using collaborations. GHOST, a supplement lifestyle brand, has launched a lineup of hydration drinks in collaboration with Sour Patch Kids. This collaboration aims to provide consumers with a familiar tasting way to optimise their hydration during intensive workouts. GHOST can tap into the popularity of the Sour Kids Patch brand to attract a new base of customers previously unreached by hydration beverages and attract a potentially younger demographic.
Shaw concludes: “The collaborations between beverage brands like Coca Cola and Ghost showcase the importance of innovation and strategic partnership. As consumer demand for novel and distinctive offerings grows, these collaborations in the carbonates and sports drinks markets are crucial for capturing market share and increasing brand loyalty.”
*GlobalData 2024 Q2 Consumer Survey – Global, published in July 2024, included 22,016 respondents
New study explores the impact of EU Sustainability Regulations and the implications of the new EU Deforestation Regulation (EUDR) for global commodity supply chains and consumer markets
- EUDR aims to cut greenhouse gas emissions and help limit biodiversity loss by influencing global action on climate change targeting commodities linked to deforestation
- EUDR will require companies trading in certain commodities who wish to trade with the EU to prove that their product and its value chain are deforestation-free
- EUDR compliance premiums for companies operating in the supply chain for oil palm products and their derivatives and rubber could be in excess of USD 1.5 billion for these two commodities alone. This could lead to price increases as companies are likely to pass on the extra costs of EUDR compliance to consumers
- Food, drink and personal care categories likely to be most affected by retail price hikes due to the EUDR include coffee, chocolate, soy-based meat alternatives and oil palm products and their derivatives including hundreds of personal care products such as shampoo
The EU Deforestation Regulation (EUDR), which comes into force at the end of the year, is the latest round of EU sustainability regulation which attempts to influence global regulatory policy and value-chain practices as part of the bloc’s effort to achieve key aims of The European Green Deal such as no net emissions of greenhouse gases by 2050.
The EUDR is arguably one of the most far reaching and impactful pieces of EU sustainability regulation, targeting commodities linked to deforestation, which includes cattle, cocoa, coffee, oil palm, rubber, soya, and wood as well as some of their derived products, such as paper/paperboard, leather, shampoo, chocolate, tyres, and furniture.
EUDR Compliance
Under the EUDR companies that trade in these commodities and their derived products in the EU market or who export them from the EU will need to follow mandatory due diligence reporting of the goods and supply chains they wish to trade in and demonstrate that their products are not linked to deforestation, or to forest degradation through, for example, the expansion of agricultural land. The regulation will require companies and industries in countries that supply the EU to transition to a sustainable, deforestation-free supply chain and legal agricultural value chain if they wish to trade in the EU.
USD 1.5 billion potential cost to EU consumers
Agribusiness Consultants at GlobalData a leading data and analytics company estimate that EUDR compliance premiums for companies operating in the supply chain for just two of the targeted commodities, oil palm products and their derivatives (such as crude palm oil (CPO) and palm kernel oil (KPO)), and rubber could be in excess of *USD 1.5 billion alone. Whilst companies operating in these supply chains will be able to absorb some of the costs themselves a good proportion of these compliance premiums are likely to be passed onto EU consumers in the form of food and drinks and product price increases.
EU Sustainability Regulations study
GlobalData Food & Beverages Consultants’ new study: ‘EU Sustainability Regulations: How the EUDR and other Sustainability Regulations will impact consumer markets’, explores some of the EUs key sustainability regulations focusing on the aims of the EUDR and the compliance challenges ahead for farmers, companies, and manufacturers trading in the commodities targeted by the regulation.
The study also looks at what the EUDR could mean for the global supply chain of the target commodities, the potential impact on consumer markets and pricing within the EU and how the EUDR could affect the bloc’s future competitiveness with China.
With the EUDR coming into full force on 30th December 2024 for large companies (2025 for SME’s), the new study is also a timely reminder for large companies operating in the Food & Beverages, Foodservice, Retail and Packaging sectors to finalise their EUDR compliance strategy over the next six months to avoid being late in aligning their operations with the new EUDR rules.
It could be argued that the EU aims to use the ‘Brussels effect’ to direct global policy on sustainability. This is the idea that the global landscape responds to the EU ‘externalizing’ its laws because the bloc is such a significant global consumer market. According to **Eurostat, the EU has a population of over 448.7 million people, one of the biggest consumer markets in the world.
The European Investment Bank predicts that the EUs various climate actions could result in a potential hit to EU-wide GDP of – 0.4 % by 2030, taking into account all of the EUs sustainability initiatives, but says the costs of not acting would be greater.
Fred Diamond Senior Food & Beverages Consultant and Analyst at GlobalData comments: “The aims of the EUDR are understandable and cutting greenhouse gas emissions and protecting biodiversity is essential. However, there could be some disruption ahead. The extra demands of the EUDR could lead some commodity suppliers in what the EU terms ‘third countries’ to move away from the EU and increase trade with countries that impose fewer regulatory requirements such as China. Some food categories, such as plant-based meat, may have to reformulate and switch to other protein sources, such as pea protein if the result of the EUDR is an increase in the price of soya for food production.
“The gap between big and small companies could get wider as larger companies are more able to shoulder the additional regulatory burden. The exact impact on consumers will depend on a variety of factors, including how companies choose to respond to the regulation, the extent to which the regulation is enforced, and how much assistance EU member states are willing to give to supplier countries to help them align with the new rules. However, with recent news reports confirming that the world’s top climate scientists expect global heating to go well beyond the current 1.5C target, sustainability regulation associated with cutting greenhouse gas emissions, such as the EUDR which targets deforestation, remains an urgent priority for the planet.”
To read GlobalData Food & Beverages Consultant’s new study ‘EU Sustainability Regulations: How the EUDR and other Sustainability Regulations will impact consumer markets’ in full please download your free copy here
*The USD 1.5 billion EUDR compliance premium figure is based on GlobalData Agribusiness consultants understanding of current commodity pricing and the likely impact of increased costs of EUDR compliance on the supply chain of these commodities. However, the company recognises that EUDR compliant commodity premiums are still being agreed confidentially between buyers and sellers so some uncertainty remains over the final numbers.
**Eurostat is the statistical office of the European Union.
Consumers today lead more demanding lifestyles that drain their energy levels, fueling the need to relax and rejuvenate. As a result, they are proactive in seeking products that can support mental wellbeing. Brands are, therefore, working to develop ingredients that can ease stress and improve mental health, says GlobalData, a leading data and analytics company.
Meenakshi Haran, Lead Consumer Analyst at GlobalData, comments: “The incidence of poor mental wellbeing is at its highest today with consumers generally feeling more stressed and anxious as they deal with challenging economic and social conditions. Indeed, mental wellbeing is a major concern (extremely/quite concerned) for American consumers as attested by 50 % of respondents in a recent GlobalData survey*”
Conscious of the negative health implications of an imbalanced lifestyle, many concerned consumers are paying greater attention to their emotional wellbeing and quality of life. Ingredient manufacturers have taken notice of this growing consumer pursuit of food and beverages that can help them relax and rejuvenate. In March 2024, Caldic North America announced its collaboration with Celesta Company to expand Caldic’s portfolio with Celesta’s proprietary ingredient blends and technologies, including SlumberMor and RnRMor, designed to improve sleep, mood, and relaxation. These innovative offerings are touted to help with functional innovations in the food and beverage industry.
Haran continues: “Millennials and Generation Y (58 % each) are the most concerned about their mental wellbeing, compared with other generations in the current situation*. This trend is driven by health-conscious consumers who are concerned about the impact of diet on mental health.”
Haran concludes: “This high concern motivates consumers to improve diets, carefully consider what ingredients are inside food & drinks, and seek lifestyle changes. Novonesis, a joint venture between Chr. Hansen and Novozymes unveiled a new ingredient, the MindAble 1714 probiotic designed to manage stress, targeted at the food industry. Food & beverage brands should consider launching products using innovative ingredients to align with consumers expectations.”
*GlobalData 2024 Q1 Consumer Hot Topics Survey – US, published in March 2024, 500 respondents
Since the onset of the COVID-19 pandemic, functional drinks have been gaining momentum, with nootropics, immunomodulators, and botanics becoming household terms. Adaptogens, which claim to address rising concerns of stress, anxiety, and balance restoration, have been gaining ground rapidly. In addition, these ingredients help address the challenge of providing consumers with value for money by maintaining quality at steady prices. Against this backdrop, adaptogens are set to become mainstream ingredients, says GlobalData, a leading data and analytics company.
Bokkala Parthasaradhi Reddy, Lead Consumer Analyst at GlobalData, comments: “Over the last few years, a health-oriented approach to life has gained a new meaning. Globally, an increasing number of consumers are seeking products that will help them address specific aspects of their overall wellness, such as stress management, sufficient rest, anxiety-easing, and embracing sobriety or mindful drinking. As a result, they are reaching out for goods with added functionalities, active ingredients, or clearly stated health benefits. With their neuroprotective, anti-fatigue, and anti-depressive properties, adaptogens provide multiple benefits, such as boosting immunity, easing anxiety, and relieving stress, which are some of the major consumer focus areas following the pandemic.”
Deepak Nautiyal, Consumer and Retail Commercial Director, APAC and Middle East at GlobalData, notes; “Adaptogens are the new functional ingredients that have found a foothold in non-alcoholic drinks. They can be plant-based or synthetic and can be easily added to a multitude of drinks, such as carbonates, juice, and tea/coffee without altering the flavor or taste profile of these drinks. One of the primary advantages of adaptogens is the ease of use, as they can be consumed as dietary supplement capsules, in teas, or added to non-alcoholic drinks such as carbonates and juice. However, adaptogens cannot be termed as exclusive ingredients as many of them provide the benefits of nootropics and immunomodulators and the other way around.”
Reddy adds: “Some of the common plant-based adaptogens include Panax ginseng, Rhodiola crenulata, and Schisandra chinensis, which have been used to control or manage multiple conditions, including blood sugar control, brain health, fatigue, anxiety, depression, stress, liver diseases, and menopause symptoms. Ginseng is the most popular among these adaptogens and is widely used for its immunity-boosting attribute. Meanwhile, synthetic adaptogens, known as “actoprotectors” have similar functions and enhance body stability without increasing oxygen consumption or heat production, boosting mental and physical resistance, and increasing blood flow. However, these attributes, which enhance the appeal of synthetic adaptogens, also make them unsuitable for consumption by athletes.”
Nautiyal continues: “In addition to their health benefits, adaptogens also help in engaging consumer interest. With the majority of consumers reeling from the impact of high inflation, value for money has emerged as a key theme in consumer purchases. With rising input costs, manufacturers are being forced to provide more value to the consumer’s dollar. This is reinforced by a GlobalData consumer survey*, wherein 27 % of consumers perceive low price/cheap good value for money, and an equal number of respondents perceive high-quality products/ingredients as value for money.”
Reddy observes: “The addition of adaptogens will help to attract consumers who prefer high-quality ingredients. Moreover, these consumers will be inclined to pay more for proven health benefits, as evident in 84 % and 80 % of respondents in the same survey who opined “good for physical fitness/health” and “good for mental health” as an essential or nice to have features in their purchase decisions.”
Nautiyal concludes: “The benefits of adaptogens, which include managing stress and anxiety, are among the most sought-after features among consumers. In non-alcoholic drinks, adaptogens are being used in beverages positioned as alcohol substitutes, and natural energy drinks or night-time drinks that are claimed to improve the quality of sleep and rest, and their adoption is expanding. However, adaptogens are new to the market, and the potential impact of long-term use has not been proven. For instance, dosage control and the potential reactions to medications are still being studied. Hence, despite the significant benefits, adaptogens cannot be a universal panacea for addressing stress and anxiety. Manufacturers will have to address these concerns to push more brands to adaptogens.”
*GlobalData 2023 Q4 Consumer Survey – Asia & Australasia, with 6,163 respondents
In recent years, the carbonates industry has undergone a transformation in its product portfolio driven by evolving consumer preferences, changing regulatory measures such as sugar taxes, and increased concerns about health. This transformation trend has been quite visible since the onset of the COVID-19 pandemic, as consumers became more conscious about the impact of sugary drinks on their health. In response to these shifts, companies are investing more in developing new products, with a focus on developing low- or no-calorie carbonates by using sweeteners as alternatives to traditional sugar, says GlobalData, a leading data and analytics company.
Guida Simoes, Consumer Analyst at GlobalData, comments: “One of the prominent categories in the carbonates space is diet sodas, which are popular drinks around the world, especially among people who want to reduce their sugar or calorie intake. Almost every popular sugary drink on the market has a “light” or “diet” version – Diet Coke, Coke Zero, Pepsi Max, Sprite Zero, etc. Despite their appeal to calorie-conscious people, the effects of diet drinks and artificial sweeteners on health are controversial.”
In response to the evolving trend, major players are constantly innovating and creating different flavors for zero-calorie drinks to attract more consumers. For example, in April 2023, Coca-Cola announced a zero-sugar variant that offers “bold and delicate” flavour profiles during the launch of the Coca-Cola Movement in Spain. Stated to be a collaboration between “Coca-Cola – a beverage company and Rosalia – a Spanish singer”, this launch aims to attract more consumers with healthier products, with sugar-free and calorie-free products in mind.
In 2023, in Western European countries, the market share of low/no-calorie drinks is approximately 34 %, with the UK leading at 54 %, followed by Spain at 45 %, Italy at 18 %, France at 25 %, and Germany at 26 %*. This diversification highlights the varied consumer preferences and market dynamics within the region.
Simoes continues: “Moreover, the interesting correlation between the percentages in the market share of low/no-calorie drinks and the levels of health concerns, as shown by the GlobalData 2023 Q4 consumer survey, adds depth to our understanding. Countries with higher market shares, notably the UK and Spain, demonstrate a higher percentage of consumers 38 % and 42 %, respectively, expressing extreme or significant concern about their health. This showcases a relationship between consumer behavior and evolving product preferences, suggesting that health-conscious individuals are more inclined towards adopting low/no-calorie beverages.”
Simoes concludes: “Tailoring approaches to cater to health-conscious demographics, particularly in markets like the UK and Spain, presents a promising opportunity for growth. For businesses, they can adjust their marketing strategies and innovate products that appeal to consumers who are mindful of their health.”
*GlobalData Consumer Intelligence Center – Market Analyzers, accessed in December 2023
**GlobalData Q4 2023 Consumer Survey, published in December 2023, was conducted with 9068 respondents in Europe
Americans are increasingly longing for the “good old days” amid rapid social and economic changes in the aftermath of the COVID-19 pandemic, including the pressures of modern life, inflation, and the current cost-of-living crisis. Brands are looking to cash in on consumer inclination for nostalgia by bringing pack products and packaging from the bygone era to evoke a sense of familiarity, says GlobalData, a leading data and analytics company.
Meenakshi Haran, Lead Consumer Analyst at GlobalData, comments: “Nostalgia is often a sensory experience for consumers who are sentimental about a period or place that they have experienced before. They seek familiar flavours, fragrances, or products that take them back to that time or place. Americans, in particular, are feeling nostalgic about the “good times” and looking for familiarity in the food & drinks products they choose, as affirmed by 67 % of respondents in GlobalData consumer survey*.
“By bringing back old-style flavors and products, brands are hoping to tug at the heartstrings of consumers looking for comfort in fond memories. Olipop, for instance, claims to be a new kind of soda in retro cans, reminiscent of nostalgic packaging designs, while Spindrift a sparkling water brand introduced two new variants inspired by the 1990s when purple grape-flavoured products were popular. Similarly, Oreo debuted its new limited-edition “dirt cake” flavour that claims to be a spin on the classic childhood-favourite, mud-pie dessert.”
Haran continues: “Given the plethora of new product launches that are trying to differentiate themselves and gain a share of the consumer’s wallet, companies should try to differentiate their products and make them stand out on retail shelves. The launch of retro-themed products and packaging reflects an effort to attract consumers. This is corroborated by as many as 29 % of American respondents who claim that new experiences with product purchases are essential, while an additional 24 % state unique/novel features are essential*.”
Haran concludes: “While the desire for retro products is high among American consumers, brands must strike a balance between nostalgia and sensory expectations of visual and taste experiences to keep consumers coming back and drive sales. They need to ensure that there is a right mix of novelty and nostalgia to entice consumers.”
*GlobalData 2023 Q4 Consumer Survey – US, published in December 2023, 500 respondents
Artificial intelligence is revolutionising the food and beverage industry by translating abstract flavour concepts into tangible realities. Recent advancements in Japan showcase how brands leverage AI to infuse ideas and emotions into product development, creating unique culinary experiences. This innovation not only enhances consumer engagement but also underscores AI’s role in driving sustainable food production and aligning with consumer preferences. However, building trust in AI-assisted choices remains imperative for ongoing industry transformation, says GlobalData, a leading data and analytics company.
Earlier this year, Japanese tech giant NEC Corporation, in partnership with Kimuraya Sohonten Co. and Abema TV, pioneered an innovative approach to food creation, leveraging AI technology to craft bread flavours aimed at captivating new demographics, particularly younger consumers.
By analysing cultural cues from TV and social media, they have created innovative offerings like “First Date” and “Mutual Love,” infusing emotions into culinary experiences. This pioneering endeavor showcases AI’s potential to revolutionise food innovation by bridging the gap between sensory and emotional realms.
Katrina Diamonon, Principal Consumer Analyst at GlobalData, comments: “More brands are taking greater liberties with the concept of flavour, by using intangible elements such as ideas, experiences, and moods to describe flavour. This recent example from Japan takes the consumption experience beyond the sensorial and into the emotional realm. We have already seen this kind of innovation from more progressive beverage companies, but its expansion into bakery suggests that a wider array of food and drink brands will explore more whimsical and abstract flavours.
“It also underscores the wider impact of AI technology on consumer goods innovation. Not only is it making food production smarter and more sustainable; it is also changing how food products are conceived and designed, aligning them even more closely with consumer preferences. Significantly, we are already seeing a degree of confidence in AI-assisted food and drink choices; however, consumer trust in such technologies needs to continue to grow.”
A survey* conducted by GlobalData found that one third (33 %) of global consumers would be very or quite likely to trust recommendations from a virtual assistant (e.g. using AI) to buy food and drinks.
Diamonon concludes: “The notion of translating human emotions into tangible flavours may seem far-fetched but is certainly not beyond the realm of possibility for AI, which has only scratched the surface in terms of its ability to use predictive analytics to transform ideas into reality.
“As more brands make the move into the metaverse, flavour has the potential to become a more abstract term as physical and digital worlds merge. AI will prove invaluable in helping brands develop flavours and scents that bring an emotion to life.”
*GlobalData 2023 Q4 Consumer Survey – Global, published in December 2023, sample size – 21,000
The global energy drinks market has presented itself as one of the most stable in recent times, registering continued growth over the past five-year period while many other drinks industries have stalled. Red Bull, Monster, and Rockstar have maintained their dominant share in the high-performing market at the global level over the past decade, resisting disruptive new entrants for the most part of the period. However, the big exception to this has been HELL Energy, which is now aiming to tap consumers’ growing interest in tech-augmented experiences, says GlobalData, a leading data and analytics company.
Ayoub Khalil, Consumer Analyst at GlobalData, comments: “Since its launch in the early 2000s, HELL Energy has established itself as the market leader in eastern Europe and more significantly found itself as the major player in India recently. It is now looking for continued growth from launches in high growth potential economies. India’s growth, especially in terms of disposable income, remains solid with economic growth being revised upwards to a solid 6.44 % in 20231, while eastern European countries are also showing good signs despite recent stagnation.”
With its distinctive commitment to technology, HELL Energy has now embarked on a new AI drink, which it presents as being entirely made across every part of its value chain by artificial intelligence (AI). This is a unique step to ride the trend of a new fascination with tech-augmented experiences, a trend evidenced by a survey of GlobalData showing how over 86 % of global consumers’ buying choices are shaped by how digitally influenced the product is2.
Khalil adds: “The big question, however, with the release is whether it serves to be more than a marketing ploy or a genuine innovation that draws on AI’s powerful capabilities to produce true value that satisfies nuanced consumer preferences. This question comes in light of the most recent quarter GlobalData survey affirming the general benefits that integrating AI can bring in production with 83 % of surveyed consumers claiming that how much a service is tailored to their preferences and personalities has a positive effect on their purchases2, which is something the new drink states it brings in AI’s ability to analyse vast data to boil down to what consumers exactly want.”
In the broader view of the commercial landscape, the release brings to market an interesting case study for firms in and outside the industry of the benefits that can be brought by involving AI in the production process. Again, such methods are already being leveraged elsewhere without the gimmick of companies naming their products an AI release. The biggest of these examples is how the major player Coca-Cola has moved into this new space with its newly released Y-3000 drink, which it claims to have been developed with the help of AI.
Khalil concludes: “HELL Energy, however, does state that what makes its drink truly AI generated compared to other products is the complete use of AI in everything from packaging to evaluation to marketing elements; where the company needs to be clearer is in how much they’ve been able to completely strip away any subjective human choice in the configuration that every AI system is adjusted with, which still remains undisclosed by the company.”
1GlobalData Database-Economy-Macroeconomic Database updated Jan 2024-India
2GlobalData’s Global Consumer survey published in December 2023 was conducted with 21,000 respondents globally
Over 270 non-alcoholic beverage brands, which include many globally recognised brands, have active sponsorship deals in place with sports properties based mainly across Europe, as of October 2023. Many of these deals are highly lucrative, with seven non-alcoholic beverage brand deals worth over USD 5 million annually. Among these brands, Red Bull is the biggest spending brand in the Europe, the Middle East, and Africa (EMEA) region, with over USD 63.31 million being invested by it in 2023, according to GlobalData, a leading data and analytics company.
GlobalData’s latest report, “EMEA Non- Alcoholic Beverage Sports Sponsorship Landscape,” reveals that Red Bull is estimated to have 10 deals in place that are worth USD 1 million or more annually. Its deals include many esports teams such as OG, Team Spirit, and G2 eSports.
Tom Subak-Sharpe, Sport Analyst at GlobalData, comments: “Red Bull across the EMEA region is the biggest spending non-alcoholic beverage brand thanks to many lucrative deals, which include a primary front-of-shirt agreement with soccer club RB Leipzig. The brand’s investment in Leipzig has contributed massively in allowing the club to be one of the best-performing clubs in German soccer over the last 10 years.”
Red Bull’s biggest spending rival in the sector is Coca-Cola. GlobalData estimates the brand will spend nearly USD 60 million on sponsorship deals across the EMEA region in 2023. The brand’s biggest annual deal in the region is with FC Barcelona. Its one-year deal with the Spanish soccer giants is estimated to be worth USD 5.25 million.
Subak-Sharpe concludes: “In 2023, Coca-Cola continued to be associated with many athletes, with current deals ongoing with Neymar, Blake Griffin, Anthony Davis, Kris Bryant and Justin Barcia. Of these five deals, the one with the Brazilian soccer player Neymar is the most lucrative. Over a long period of time, Red Bull has associated itself with some of the world’s most recognisable athletes. These associations are not expected to decline, with the brand constantly identifying new top talent to partner with.”
Over 110 non-alcoholic beverage brands, which include many globally recognised brands, have active sponsorship deals in place with sports properties based mainly in the US. Many of these deals are title or main sponsorship deals, which allow brands to receive substantial brand exposure opportunities, often from sports properties that have substantial global fanbases. With many of the deals being highly lucrative, eight non-alcoholic beverage deals are worth over USD 10 million annually. PepsiCo is the biggest spending brand in the Americas region, with an estimated expenditure of USD 322.96 million, according to GlobalData, a leading data and analytics company.
GlobalData’s latest report “Americas Non-Alcoholic Beverages Sports Sponsorship Landscape,” estimates that the American multinational food, snack, and beverage corporation PepsiCo has 55 deals in place, which are worth USD 1 million or more annually. In 2023, over USD 100 million is being invested by PepsiCo in team deals, which include many NFL teams such as the New England Patriots, Washington Commanders, and Miami Dolphins.
PepsiCo’s biggest competitor in the sector is Coca-Cola. In 2023, Coca-Cola is estimated to spend close to USD 277 million on sponsorship deals across the Americas region, according to GlobalData. The brand’s biggest annual deal in the region is with US Soccer. The current five-year agreement between the two parties is estimated to be worth USD 100 million.
Tom Subak-Sharpe, Sport Analyst at GlobalData, comments: “It is not surprising that PepsiCo and Coca-Cola dominate the region of all the competing non-alcoholic beverage brands due to the vast amounts of funding that these two powerhouse organisations have to spend on developing their sponsorship portfolios.”
In 2024, it is unlikely that any other non-alcoholic beverage brands will come close to competing with these two brands. However, a brand to keep an eye on who may increase their sponsorship spend and deal volume count is PRIME, the brand that is currently serving as the official sports drink of the Los Angeles Dodgers.
Subak-Sharpe concludes: “The meteoric growth experienced by PRIME in 2023 may allow the brand to invest more finances into securing more sponsorship deals with globally recognised sports properties based in the Americas region.
Food and beverage companies are targeting Asia’s lucrative electronic games (egames) market by rolling out customised functional products and sponsoring esports events in collaboration with leading game developers. Opportunities are rife for such products in China, which by itself is a $ 50 billion-plus market for mobile, personal computer, console, and cloud gaming software, as well as other booming Asian markets, such as Japan, and South Korea, according to GlobalData, a leading data and analytics company.
Tim Hill, Key Account Director at GlobalData Singapore, comments: “During extended gaming sessions, egamers are prone to consume snacks and drinks to quell hunger pangs, stay hydrated, and thereby play uninterrupted. Food and beverage makers are rolling out premium products targeting this high-spending cohort of avid gamers to cash in on the popularity of gaming. Companies are customising the recipes with ingredients that boost stamina and mental alertness to allow egamers to extend their sessions and improve their performance. Additionally, they are personalizing offerings for egamer cohorts of different genders, ages, and geographic regions. This personalisation feature can appeal to 57 % of Asian consumers whose product choices are often or always influenced by how well the product/service is tailored to my needs and personality**.”
Bobby Verghese, Consumer Analyst at GlobalData, notes: “Among beverage categories, energy drinks presently dominate the gaming world. Recent product launches targeting avid gamers include Coca-Cola’s Thums Up Charged energy drink unveiled in Vietnam and Cambodia, and Beat The World’s G-Beat energy drink and computer manufacturer Acer’s PredatorShot in Thailand. Coca-Cola claims that Thums Up Charged is infused with vitamin B3, caffeine, and zinc to boost energy. According to the manufacturer, G-Beat is made with natural caffeine and without white sugar and fortified with vitamins A and B to support eyesight and brain functioning. Acer claims that PredatorShot is fortified with vitamin A to boost gamers’ eyesight.”
Hill continues: “Companies are also collaborating with top game developers to launch co-branded products and packaging. For instance, Coca-Cola unveiled a limited-edition Coca-Cola Ultimate Zero Sugar with a special flavour inspired by Riot Games’ hit game, League of Legends. Other recent examples include Mister Potato’s special edition pack for the game, Mobile Legends: Bang; and ZUS Coffee’s limited-edition drink, Velvet Crème Poring Latté, with the theme of the popular mobile game, Ragnarok Origin. Within the foodservice sector, notable examples of egames collaborations include Pizza Hut and Domino’s Pizza, Hut which rolled out special campaigns in Malaysia in collaboration with a popular mobile game, Genshin Impact.”
*GlobalData Technology Intelligence Center – Market Analyzers, accessed in September 2023
**GlobalData Q2 2023 Consumer Survey – Asia & Australasia, with 6,438 respondents, published in May 2023
Singapore’s Nutri-Grade nutrient labeling system is proving to be a useful tool in stimulating competition and product innovation in the health and wellness beverages space and curbing sales of unhealthy drinks. Notably, 53 % of Singaporean respondents said that health labeling (information on protein/sugar/fiber/carbohydrate content) displayed on the product packaging often or always influences their product choices*, in a recent survey by GlobalData, a leading data and analytics company.
Tim Hill, Key Account Director at GlobalData Singapore, comments: “Nutrition labeling systems, such as daily intake guidance, warnings, traffic lights, star ratings, and nutrition scores, are intended to help consumers in making informed decisions and transition to healthier foods. These systems grade or rate food and drinks based on the sugar, fat, sodium, and energy content in beverage formulations. The standardised grading systems make use of colours, vectors, and symbols that are easier for consumers to read than the comprehensive back-of-pack ingredient lists.
“Additionally, as these gradings/rankings are defined, they are easier to comprehend than the plethora of health and natural claims that food manufacturers employ. Some of these claims are misleading, for instance, a product with the tag ‘no-added sugar’ can hide the fact that it contains ingredients rich in natural sugars such as fructose.”
Bobby Verghese, Consumer Analyst at GlobalData, notes: “In its war on diabetes, the Singapore Government mandated the “Nutri-Grade” nutritional labeling system for pre-packed beverages and automatic beverage dispensers from December 30, 2022. Moreover, pre-packaged sugar-sweetened beverages with high sugar or fat content are given a low rating and prohibited from being advertised. The authorities plan to extend nutrition labeling to freshly prepared beverages by the end of 2023. Nutri-Grade has reportedly curtailed sales of unhealthy drinks.”
Hill adds: “Nutri-Grade is motivating beverage makers to reformulate existing products and launch new products with less sugar and calories. It fosters competition among brands and labels to step up research and development (R&D) of healthier ingredients and processes, which ultimately provides consumers with a broader choice of better-for-you products. In a recent case, Yakult Singapore’s flagship probiotic drink, Yakult Original, received a low Nutri-Grade D rating due to its high sugar formulation, while a similar product from rival brand Vitagen received a higher Nutri-Grade B rating for its low sugar recipe. Subsequently, in March 2023, Yakult Singapore launched a new variant named Yakult Gold, which it claims contains only up to five grams of sugar per 100 ml, and is fortified with Vitamin D to boost bone and dental health. Yakult Gold thereby received a Nutri-Grade B rating and the Healthier Choice Symbol badge.”
Verghese concludes: “Similar to Singapore’s Nutri-Grade, Malaysia and Thailand have adopted both voluntary Guideline Daily Amount (GDA) labels and the Healthier Choice Logo, while the Philippines has opted for a voluntary GDA system. The Indian food safety agency, FSSAI, has also proposed an Indian Nutrition Rating system akin to Australia’s Health Star Rating system.
“Authorities are striving to plug the loopholes in these rating systems, including the difficulty in comparing different product categories under each system. These diverse nutrient labeling systems across countries will undoubtedly escalate the procurement, R&D, and production expenditure of F&B companies. The adoption of uniform standards across the Asia-Pacific will incentivise F&B manufacturers as they can offset the added costs through economies of scale of selling similar products across borders.”
*GlobalData Q3 2022 Consumer Survey – Singapore with 513 respondents, published in September 2022
As Chinese consumers are more focused on healthier beverages compared to their US counterparts, the country is witnessing a significant rise in consumer low-calorie soft drinks. Low-calorie soft drinks volumes increased at a triple-digit rate in China between 2019-2022, while the volumes grew by only 10 % in the US, finds GlobalData, a leading data and analytics company.
Global Data forecasts that in China, the volumes of low-calorie beverages will record a positive growth rate of 11.3 % in 2023, while in the US, it will be 2.2 %, albeit the US soft drinks market is much more mature and developed. The low-calorie market share in the soft drinks sector was 17 % in the US in 2022, while it was 2.4 % in China.
Dragos Dumitrachi, Consumer Analyst at GlobalData, comments: The carbonates category is the biggest winner regarding the growth of low-calorie beverages. Major brands such as Coca-Cola and Pepsi are continuing to invest in low-calorie variants and the trend is picking up globally. In China, low-calorie volumes are forecast to increase by 13.1 % in 2023, while the US will record a minimal 1.5 % rise in volume. “Since 2019, boosted by the COVID-19 pandemic, the health trend in the soft drinks sector has accelerated across the globe. In 2022, the world saw China and the US clash on multiple fronts. In the soft drinks consumer market, a similar opposing evolution scenario is taking place between the two countries.”
The carbonates category is the biggest winner regarding the growth of low-calorie beverages. Major brands such as Coca-Cola and Pepsi are continuing to invest in low-calorie variants and the trend is picking up globally. In China, low-calorie volumes are forecast to increase by 13.1 % in 2023, while the US will record a minimal 1.5 % rise in volume.
According to a recent GlobalData consumer survey*, when asked which feature consumers are actively looking for when making a purchase, a significantly higher proportion of Chinese consumers (49 %) said it is essential for the product to be good for physical fitness/health, while in the US, only 29 % find it essential.
Dumitrachi concludes: “This data shows that since the outbreak of the pandemic, whilst both markets show a high level of innovation towards low-calorie launches, Chinese consumers are more concerned about making informed health decisions within the beverage space in comparison to US consumers. Manufacturers in China and the US are set to increase the number of launches to capitalise on this trend throughout 2023.”
*GlobalData Q3 2022 Consumer Survey – China consisted of 532 respondents
Despite the brewing geopolitical, economic, and health crises, China’s hot drinks sales are set to increase, as consumers trade up to higher-quality products. The introduction of innovative and customised tea, coffee, and plant-based hot drinks is bolstering the market growth. As a result, the China’s hot drinks market is set to register a compound annual growth rate (CAGR) of 6.1 % from CNY 231.4 billion (USD 36.2 billion) in 2021 to CNY 311 billion (USD 48.6 billion) in 2026, says GlobalData, a leading data and analytics company.
GlobalData’s report, ‘Chinese Hot Drinks – Market Assessment and Forecasts to 2026’, reveals that while tea remains the mainstay, the coffee culture is growing owing to the evolving lifestyles and preferences of urban consumers. The market growth will be primarily driven by the hot coffee category, which is set to register the fastest value CAGR of 6.5 % during 2021-2026. The category will be followed by other hot drinks and hot tea with a CAGR of 6.2 % and 6.0 %, respectively, over the forecast period.
Naveed Khan, Consumer Analyst at GlobalData, says: “The stringent COVID-19 lockdowns in Beijing, Shanghai and in the Hainan province have undermined the on-premise sales of hot drinks. However, consumers are treating themselves to higher quality tea and coffee at home. The growing demand for the new consumption experiences among the urban youth, and the introduction of new brew styles and flavours by international and homegrown companies are powering the growth of the hot coffee category in China.
“Hot tea, the largest category by value sales, continues to expand as new Chinese-style teas, such as yellow tea and scented tea, are gaining traction. The health concerns due to the pandemic are spurring the demand for herbal drinks that are perceived to improve immunity and overall health and wellness.”
According to the report, ‘convenience stores’ was the leading distribution channel in the Chinese hot drinks market in 2021, followed by hypermarkets & supermarkets, and e-retailers. Nestlé, China Tea, and Zhejiang Xiangpiaopiao were the top three companies in the fragmented Chinese hot drinks sector in value terms in 2021, and Nescafe and U.Loveit were the leading brands.
The per capita expenditure (PCE) on hot drinks in China increased from USD 6.5 in 2016 to USD 12.7 in 2021, surpassing the regional average at USD 11.1, but lagging the global level at USD 17.0. China’s PCE on hot drinks will surge to USD 17 in 2026.
Khan concludes: “Multinational and local companies are launching new products with innovative marketing strategies to develop new consumption occasions and expand their base. They are targeting young consumers, who are eager to experiment with innovative brew styles and flavours. However, the strict pandemic control measures, economic slowdown, and political standoff over Taiwan may slowdown the hot drinks sector’s growth momentum in the intermediate term.”
In line with its goal to transition to 100 % recycled and plant-based PET bottles by 2030, the Suntory Group unveiled a prototype PET bottle made from 100 % plant-based materials partnership. The prototype bottle was developed in collaboration with US-based Anellotech for Suntory’s Orangina and Tennensui soft drinks brands in the European and Japanese markets, respectively. Given Suntory’s claims that its plant-based bottle overcomes several issues associated with bioplastics, it represents a step forward for the beverages industry towards the holy grail of biodegradable packaging, says GlobalData, a leading data and analytics company.
Bobby Verghese, Consumer Analyst at GlobalData, comments: “Compostable/biodegradable plastics are presently a lower priority than recyclable packaging for Japanese consumers validated by as GlobalData’s Q3 2021 consumer survey. Only 30 % of Japanese respondents in the survey consider compostable/biodegradable an important factor in a product, when compared with 63 % of respondents who prioritize easy to recycle products*.
Verghese continues: “This is partly as consumers are disillusioned by earlier plant-based packaging innovations such as Coca-Cola’s PlantBottle, which failed to take off after the initial hype due to functional and cost challenges. Also, a large section of consumers are unsure how the biodegradable bottles will safeguard its contents.”
While bioplastics are touted as the penultimate solution for the plastic waste problem, most products have hitherto failed to match the performance of conventional oil-based plastics. Additionally, the cost of raw materials and overhauling existing manufacturing lines to accommodate bioplastics remain quite prohibitive. Moreover, bioplastics degrade only under specific ambient conditions, thereby posing an environmental threat. Furthermore, cultivating crops for producing bioplastics locks up agricultural land that could otherwise be used for food production.
Suntory claims its bioplastic material is made from two compounds, namely PTA and MEG, which are made from non-food biomass and non-food-grade feedstock, respectively, which minimizes its impact on the food chain. The plant-based bottle is claimed to be generate far lower carbon emissions than petroleum-derived plastic bottles.
Verghese concludes: “Suntory’s plant-based bottle can attract 39 % of Japanese consumers who consider products with reduced carbon footprint to be quite/extremely important, and 41 % of consumers who say the same for products that are sustainable/made from renewable sources*. However, the pros and cons of the bioplastic will only come to light after the full-fledged market launch.”
*Data taken from GlobalData’s Q3 2021 Consumer Survey – Japan with 527 respondents, published in September 2021
The traditionally popular flavours of cola, lemon-lime and pepper saw a combined 4.3 % volume decrease in 2020, according to GlobalData. While these flavours will remain dominant, one of the leading data and analytics companies says that leading drinks brands are making room to experiment with unique, limited-time-only flavours that entice a young generation that is fuelled by a fear of missing out (FOMO).
George Shaw, Beverages Analyst at GlobalData, comments: “These shock factor, experimental beverages tug on the ‘FOMO’ strings – especially when a lot of buzz is generated across different social platforms. Capturing the attention of online influencers is key as they could share the ‘crazy concoctions’ to their social feeds. Further, curiosity is a powerful drive. According to GlobalData’s Q2 2021 consumer survey, around a third* of US consumers purchase new varieties of soft drinks out of curiosity.”
GlobalData notes that some of the more unusual ingredients that have grown in popularity in the past year include floral flavours, such as rose, violet and elderflower*. Further, the analytics company expects to see brands experiment with spice flavours in the coming colder months. Coca Cola cinnamon is an example of an industry leading company experimenting with unusual ingredients, which sets a good example for other companies to follow suit.
Soft drinks flavours were taken to a new level in August, with PepsiCo’s release of its ‘Flamin Hot Mountain Dew’. The company released the teen gamer’s ‘dream drink’*as it combined the Cheetos flamin hot flavour with energy drink. The product* was released through its online store and used twitter to promote.
Shaw continues: “Flamin Hot Mountain Dew was both a limited edition, as well as limited to two six-can cases per order – creating an air of exclusivity and leveraging FOMO.”
This is not the first time PepsiCo has experimented with ‘unusual’ flavours.
PepsiCo’s collaboration with Peeps in March saw it release a marshmallow soda, which was only available to participants that shared a tweet enjoying springtime activities – tagging Pepsi and using a hashtag. Rather than being a catalyst for sales, this was a fun promotional campaign wherein PepsiCo increased consumer and brand interaction.
Shaw adds: “People spend a lot on fizzy drinks – as admitted by 34 %* of US consumers in GlobalData’s survey. Successful collaborations and innovations from PepsiCo will pave the way for the continuation of innovative flavours across the soft drinks landscape in the future.”
*GlobalData’s Consumer Survey Results – Q2 21 US. 35 % of ‘Often’ and ‘Sometimes’ responses combined
**GlobalData’s 2021 Global Consumer Survey – Ingredients & Flavours
Following PepsiCo’s introduction of Pep+, a policy that aims to improve the company’s agricultural footprint by addressing its packaging processes and greenhouse gas emissions;
Holly Inglis, Beverages Analyst at GlobalData, a leading data and analytics company, offers her view:
“Pep+ will keep PepsiCo ahead of the competition amid consumers’ ever-increasing demand for sustainability. The policy will be popular with the 70 %* of global consumers that stated they prefer ingredients that are sourced sustainably and ethically.
“GlobalData notes that consumers are yearning for drinks that are both better for them and better for the planet. Therefore, focusing on beverages that are thought of as ‘healthy’ and ‘sustainable’ such as dairy alternatives, flavoured waters and iced teas may be a good bet in the long term given their historical popularity in a number of markets across the globe. If PepsiCo continues to utilize these categories like Lipton, in combination with the new policies, the company will be able to get a big leg up on its competitors.
“It is clear that consumers are watching brands’ actions closely, as well as changing their purchasing habits based on how brands respond to the environmental crisis. GlobalData’s Q1 2021 global consumer survey reports that 33 %** of people worldwide like to see news about a brand’s sustainability initiatives.”
*GlobalData’s Q2-21 Consumer Survey – Global – Combined responses: “somewhat appealing” and ‘very appealing” for the question “how appealing do you find the following? Sustainably/ethically sourced ingredients”
**GlobalData’s Q1-21 Consumer Survey – Global
In 2020 and continuing into 2021, COVID-19 has profoundly affected trading in the UK, with the cider market losing 16.3 %* volume in 2020, dropping to 7837.36 thousand hectolitres, according to GlobalData. However, the leading data and analytics company notes that, with restrictions being lifted and most businesses emerging from lockdown, the possibility of a successful trading year for many companies should not be ruled out, especially those heavily involved in beer and cider production.
Chloe Gbadero, Senior Beverages Analyst at GlobalData, comments: “The lifting of restrictions is great news for companies such as C&C Group, a large cider producer in the UK, which saw a 56.1 %** revenue decline during 2020 due to lockdown measures and an overall downturn for the industry. In H2 2021, C&C Group, and many other companies, have potential to see volume uplifts compared to last year, now that bars and pubs have reopened. This, combined with the potential for warm and sunny weather during the summer months, will continue to encourage outdoor dining and companies would do well to take advantage of the remaining summer months to recoup sales losses during lockdown.”
In GlobalData’s most recent survey in the UK, 21 %*** of respondents demonstrated that when it comes to alcoholic beverages, including cider, fruity flavours are the most appealing. This is 4 % more than citrus flavoured alcoholic products, highlighting a gap in the market for unique flavoured fruit ciders – which producers could benefit from through innovation of products for the remainder of 2021, as usually UK consumers are not the most experimental, preferring sweet and fruity flavours over unique/novel.
Gbadero continues: “It would be interesting to see if alcohol companies will consider further promoting their pre-existing flavoured beverages or introduce new variants in order to encourage further growth. For instance, Old Mout has introduced a new watermelon and lime flavoured variant to its range, following the successful launch of its pineapple and raspberry flavor.
“After a less than favourable 2020, which has fueled long-term loss in the forecast period to 2026, there is still light at the end of the tunnel for this well-established and popular category, provided that producers continue to innovate in line with changing consumer behaviors, and collaborate with on-premise locations to promote cider consumption.”
*GlobalData’s Intelligence Centre – Quarterly Beverage Forecast
**C&C Group – Annual Report 2020
***GlobalData’s Consumer Survey – Q2 United Kingdom
The non-alcoholic drinks sector recorded a compound annual growth rate (CAGR) of 0.9 %* between 2015 and 2020. Producers have seen a challenging landscape in recent years, battling rising costs, sugar taxes, packaging legislations and, of course, the COVID-19 pandemic. This resulted in global efforts to reduce calorie and sugar content in product ranges, as well as develop ‘novel’ flavors, to attract consumer attention, writes GlobalData, a leading data and analytics company.
Holly Inglis, Beverages Analyst at GlobalData, comments: “Beverage flavors are arguably the most important factor in determining consumer purchasing decisions, with 29 %** of global consumers stating they would happily try a new drink flavor out of simple curiosity. This highlights huge incentive for producers such as Coca-Cola, Nestlé, Unilever and PepsiCo to launch new product developments – and reinforces soft drinks as a fast paced, innovative industry.”
Inglis highlights the top five flavor launches in 2021 so far that are shaping the global soft drinks landscape:
Going ‘green’ with hemp and CBD
“Hemp and CBD infused drinks are continuing to garner interest, with products such as Trader Joe’s non-dairy hemp beverage in the US and Sonnenstar hemp juice shot in Austria. While hemp and CBD are positively received by a third and fifth of global consumers respectively, GlobalData’s survey indicates that a considerable portion are still unfamiliar with the ingredients – producers must address this to ensure the longevity of their hemp- or CBD-infused launches.”
Mango, let’s go
“Mango flavored drinks have emerged in Romania and Singapore, though a flurry of innovations with flavor combinations that incorporate mango have been observed in the US, UK and France. In the US, PepsiCo’s Bubly Bounce product tags no calories or sweeteners and is a carbonated water brand combining grapefruit, mango orange and passionfruit aromas.”
Isn’t that just peachy
“Peach-based products such as Lipton’s peach tea with honey, and Badoit’s peach flavored sparkling flavored water in France both tag either low calorie or low sugar bases, reinforcing positive brand connotations, and favorable views on peach as a flavor base.”
Ginger spice and everything nice
“Ginger, on the other hand, has been integrated across parts of the globe such as Nigeria, South Korea and Peru, in line with consumers opting for products that promote digestive health and wellness claims. In fact, 78 %** of global consumers believe that ginger has a positive impact on their health, reinforcing those links to health/wellness, and promoting manufacturer opportunity to innovate in line with consumer trends.”
It’s ‘grape’ to be back
“Interestingly, grape-based products have also made an appearance in 2021, which is fighting off current stereotypes of grape flavored beverages being high in sugar and bad for health, especially in parts of West Europe where they have less-than-favorable links to low quality. A notable launch in Brazil from EBBA tackles this narrative via its grape nectar, which is claimed to have no added sugar.”
Inglis concludes: “What can be seen in the soft drinks landscape is the development of several unique flavor launches, all of which apply to varying consumer trends across the globe. Health and wellness attributes are meeting experimental flavors, which then crosses with exotic launches, appealing to a wide array of consumers. These launches will set the tone for the future of the soft drinks market, as one that is highly innovative and prospering.
“Although only five ingredient developments have been highlighted, the future is expected to see a number of developments from flavors such as aloe and berry; we will also see more flavor combinations hit the shelves, combining non-fruit and herbal notes, with unique fruit bases.”
* GlobalData’s Annual Soft Market Analyser – Global
** GlobalData’s Q2-21 Consumer Survey Results – Global
German consumers have been turning away from juices in the last five years* as these drinks are considered to have a high sugar content. Therefore, juice makers are turning towards innovations in wellness drinks that are clear about their ingredient and nutritional benefits. Leading data and analytics company GlobalData says prebiotic juices with ingredients such as banana, garlic, apple and cocoa have the potential to be the next big thing in Germany.
Holly Inglis, Beverages Analyst at GlobalData comments: “The German juice market has seen a compound annual growth rate (CAGR) wane of 1.6 % in terms of volume over the last five years, spelling bad news for manufacturers. However, there is light at the end of the tunnel in the introduction of prebiotic juices.
“While we haven’t (yet!) seen garlic-flavoured drinks on the shelves, German producers have already started to focus their efforts on juices that promote immunity such as private label brand Dirk Rossmann, whose new launch combines prebiotic apple, mango, vegetable extract, shiitake mushroom and coconut juice. There is long-term potential for German juice manufactures to limit the declines witnessed in the category over the last few years, with the potential to capitalise on novel, innovative and trendy flavours – that in all, promote health and wellness.”
As we have seen before, reformulating products to remove sugar doesn’t always cut it. Experimenting with prebiotic ingredients such as ginger and turmeric emphasise unique ‘added benefits’, as well as being new to the market and appealing to experimental consumers.
Inglis continues: “GlobalData’s latest survey tells us that 55 %* of German consumers find ingredients that claim to improve digestive health somewhat or very appealing. That’s a large proportion of the market engaged in improving their digestive health. It is also noteworthy that, since the onset of COVID-19, a number of consumers have increased their focus on how these ingredients can improve their mental and physical wellbeing.”
In 2020, the German juice market witnessed a number of innovations from producers such as Hitchcock turmeric juice shot and Innocent ginger power shot; both of which have an ‘on-the-go’ pack size, which appeals to time-short consumers who are seeking to boost their immune system.
Inglis adds: “In the same survey, 49 %* of consumers highlighted that immunity-boosting ingredients are somewhat or very appealing. Producers could benefit from innovating beverages that boast these claims and sell at premium prices.”
*GlobalData’s Q2-21 Consumer Survey Results – Germany – Combined responses: “Somewhat appealing” and “Very appealing”
Following today’s (16 June 2021) news that Ronaldo’s dismissal of Coca-Cola at a press conference temporarily cost the brand $4bn off its market value;
Khalid Peerbaccus, Senior Consumer Researcher at GlobalData, a leading data and analytics company, offers his view:
“While the power of product placement cannot be denied, Ronaldo’s rejection of Coca-Cola in favour of a bottle of water – and the temporary impact this had on the market value of Coca-Cola – could also be due to the ambiguity that some consumers may have toward carbonated drinks.
“Ronaldo’s decision to shine the spotlight on water rather than Coca-Cola is one that may resonate with *57 % of consumers globally who say that, in the current situation, a product’s health and wellbeing claims has the greatest influence on their purchase choice – as well as a further **28 % who admit that this somewhat affects their decisions. That Ronaldo is a prominent sports figure further adds weight to his promotion of water over the soft drink, as many view and trust him as a symbol of health that is necessary for his athletic accomplishments.
“The temporary drop and subsequent recovery of Coca-Cola’s market value is an important reminder of the power of celebrity endorsement, or lack thereof: particularly when a product has, in recent years, received ‘bad press’ as with high-sugar fizzy drinks.
“The move has already spurred a similar instance where Paul Pogba removed a bottle of Heineken beer from display at a press conference. While these acts may temporarily impact the market value of brands due to impressionable fans of the players, the long-term impact on these well-established brands is yet to be seen. What it does highlight is that the placement of such products at sporting events is at odds with the perception of health that the athletes embody.”
*GlobalData survey asked how the product/service impacts my health and wellbeing. Combined responses: ‘Always’ or ‘Often’ in the current situation
**GlobalData’s 2021 Q1 Global Consumer Survey – Global
Although energy drinks have witnessed steady year-on-year (YOY) growth in the US recently, Coca-Cola has decided to discontinue its Coca-Cola Energy brand after 17 months in the market, in a bid to sharpen its product portfolio – a move that highlights the gap in the market for hybrid innovations, writes GlobalData, a leading data and analytics company.
Holly Inglis, Beverages Analyst at GlobalData comments: “Coca-Cola Energy’s launch in the US was long awaited; despite the US market size, it was one of the latter markets to begin sales after many regions in Europe. At a time where the energy drinks market is flourishing, it is interesting that Coca-Cola has chosen to pause sales of a potential future cash cow.”
According to GlobalData, the US energy drinks market grew by 10 % in 2020* and was buoyed by a flurry of innovations such as Monster Mule ginger flavoured drink or Moonlight Wingman Smart Energy. Despite COVID-19 lockdown restrictions throughout the year, the category remained a key purchase choice for many consumers across the country.
In GlobalData’s latest survey, 73 %** of US consumers stated that energy boosting ingredients are nice to have, or essential to purchasing decisions. Interestingly, this comes at a time where health and wellness trends are prevailing and where energy drinks have, in the past, come under scrutiny for high sugar and unfavourable additive content. Manufacturers have worked to offset this by adding functional claims or unique flavour innovations to their beverages.
Inglis continues: “GlobalData’s survey found that 82 % of US consumers stated that immunity boosting ingredients have a positive influence on their purchasing decisions***, reinforcing that there is opportunity for beverage manufacturers to innovate energy drinks products that combine health and wellness claims with energy-boosting ingredients. The US energy drink market is highly competitive, so it is important that producers stay ahead of the curve in terms of beverage trends. It is plausible that Coca-Cola’s energy drink line risked falling behind in the long-term, due to a lack of flavour dynamics and health-halo claims.”
Despite COVID-19 restrictions across much of 2020, the US energy drinks market grew by a sizeable share and is expected to maintain a similar fate in 2021. Consumption from home is the new norm, and producers will continue to innovate retail offerings that promote this trend. Continued drive towards digestive health will persist, reflecting high potential for hybrid innovations that combine natural energy boosting ingredients with added vitamins and gut health claims.
*Data taken from GlobalData’s Annual Soft Market Analyser – US
**GlobalData’s Q1-21 Consumer Survey Results – North America
***GlobalData’s Q1-21 Consumer Survey Results – North America – Combined responses: “Essential / Key driver of purchase” and “It is nice to have”
Historically the juice and squash category’s growth were hampered by sugar taxes and a negative health image, however, this trend is set to reverse in the coming years. The industry has a forecast growth of 4 % from $ 52.4 bn in 2020 to $ 54.6bn in 2021*, bolstered by health concerns which are seeing consumers prioritise ‘immunity-boosting’ claims over ‘sugar free’, according to GlobalData, a leading data and analytics company.
GlobalData’s survey found that almost two thirds (61 %) of consumers globally spend a mid to high amount on juice**.
Elisabet Gonzalez, Innovation Team Leader at GlobalData, comments: “Due to the pandemic consumers are more worried about their health and this could be the reason behind the juice category’s success at maintaining its appeal during this tough period. Boosting the immune system has become a top priority for shoppers, hence, functional juice drinks and healthy beverages that offer nutrition-rich ingredients are likely to stand out on the shelves and keep strong positioning.”
GlobalData identifies that health & wellness is a popular trend and a key theme in the juice industry. Some examples of innovative product launches include a Morinaga Sunkist super grape juice in Japan, which is said to contain ‘juice-derived polyphenols. Polyphenols are believed to improve the treatment of weight management difficulties, digestion issues, cardiovascular diseases, and diabetes. In the US, Softresco launched a charcoal fruit drink shot, which offers a fruit drink with added vegetable charcoal. The infusion of activated charcoal may resonate with the 35 % of US consumers that think charcoal will have a positive impact on their health***.
Gonzalez continues: “While out-of-home juice consumption has taken a dip due to lockdown restrictions, at-home consumption and expenditure seems to be steady for the category as it is expected to post a compound annual growth rate (CAGR) of 2.6 % over 2021-2025 to reach $ 60.4bn*. Juice drinks might be seen by consumers as the perfect beverage to help them fight the virus, as it can provide the ideal dose of vitamins and nutrients needed to boost the immune system in an easy and convenient format for both children and adults.
“The COVID-19 pandemic could help some brands to strengthen their positioning and to reinvent themselves as a must-have product, rather than a beverage bought only for specific occasions. The health benefits of fruit juices and their many functional positioning possibilities, aligns well with today’s consumers’ needs, hence, there is a huge opportunity for the category to grow in the long-term and maintain its momentum in a post-pandemic era.”
*Data from GlobalData’s Global Market Data: Channel Insights Cube
**Data taken from GlobalData’s 2021 Q1 Consumer Survey.
***Data taken from GlobalData’s 2019 Q3 global consumer survey
Following the news that the Coca-Cola Company is trialling its first paper bottle; Alice Popple, Consumer Analyst at GlobalData, a leading data and analytics company, offers her view:
“Coca-Cola trialling a new paper bottle comes as no surprise as there has been an increase in sustainability initiatives from brands attempting to revamp strategy and ensure longevity post COVID-19. Brand’s sustainability initiatives will be vital in the future as GlobalData’s research reveals that nearly half (48 %)1 of global shoppers view ‘plastic-free packaging’ claims to be more important to them now, than before the COVID-19 pandemic, with 13 %1 claiming that it is a top priority.
“Last year saw a decline in revenue for Coca-Cola as a result of the COVID-19 pandemic2, therefore a strategy switch up is necessary to boost sales and interest in the brand. One in three (31 %)3 of global consumers say that they have stopped or are buying less carbonated soft drinks than before the pandemic – a main reason for this may be the excess of single-use plastic in the sector, aligning to the high degree of importance that plastic free packaging is currently experiencing.
“Joining the zero-waste initiative is vital for consumer satisfaction in 2021, with over a third (36 %)1 of global shoppers being specifically interested in a brand’s new sustainability initiatives following the pandemic. Coca-Cola’s trial of its first paper bottle will stem other market leaders to follow suit.”
1GlobalData’s Coronavirus (COVID-19) Recovery Consumer Survey Results: Week 11 – Global (Published 9th December 2020) – Combined responses: “It is now my top priority”, “It is significantly more important to me”, and “It is slightly more important to me”
2GlobalData’s Coronavirus (COVID-19) Company Impact: Coca-Cola H2 Update
3GlobalData’s Coronavirus (COVID-19) Recovery Consumer Survey Results: Week 11 – Global (Published 9th December 2020) – Combined responses: “I have stopped buying this”, “I am buying significantly lower quantities than before”, and “I am buying slightly lower quantities than before”
Teetotalism trends in the Asia-Pacific region are becoming increasingly prevalent, with approximately *3three out of four (71 %) of consumers drinking less alcohol in August 2020, according to a survey by leading data and analytics company GlobalData. However, the adoption of alternative soft drinks remains low, at only one in five* consumers. In fact, APAC customers surveyed are more attracted by health claims – specifically products noted to help support mental wellbeing – with such products purchased by nearly a third of consumers. Going forward, it will be crucial for drinks brands to blur the lines around traditional alcoholic products and offer ‘better for you’ messaging.
Carmen Bryan, Consumer Analyst at GlobalData, comments: “APAC consumers are turning away from alcohol driven by concerns around physical and mental health. While general health concerns take precedence, backed by *almost half (49 %) of the region’s population, weight management, fitness, physical appearance and emotional wellbeing are all considerable factors driving low or no-alcohol innovations.”
Recognizing this trend, New Zealand-based companies Adashiko and Parker Beverages recently launched a collagen-infused bottled water, marketed as ‘premium’ and ‘sophisticated’. This launch leverages growing demand for alternatives to alcohol that incorporate functional properties, writes GlobalData.
Bryan adds: “By incorporating functional and beneficial ingredient formulations, companies such as Adashiko-Parker Beverages are able to align to personalized health trends and cater to an evolving consumer landscape.”
Looking at alcohol consumption trends more closely, GlobalData’s research reveals that, of the *271 % of consumers drinking less, a sizeable *20 % (one in five) have stopped drinking alcohol altogether. In contrast, when asked a similar question in the US.
Bryan adds: “As pubs and bars closed their doors this year, and tensions regarding public health heightened, consumers were forced to reassess their priorities and lifestyles. Trends are shaping new home-bound leisure and social occasions where consumers seek the same taste and feel of mature drinks without the negative implications.”
Japanese FMCG company, Morinaga, is leveraging these trends with its amazake product range. Most notably, the Morigana Collagen in Haenuki flavour puts a healthy twist on the traditional sweet and low-alcohol Japanese drink by highlighting the high collagen and alcohol-free claims.
Bryan adds: “GlobalData’s research highlights the importance of premium positioning and clear ‘better for you’ messaging. By leveraging wellbeing factors such as natural, immunity-boosting or skin health, brands can create a premium product that blurs consumers’ perceptions around traditional alcoholic products. A rebranding mission, of sorts. Going forward, it will be crucial for brands to blur these lines further, emphasizing the positive health credentials that will help reassure consumers, both mentally and physically, to tap into multiple consumption occasions and justify a potentially higher price mark up.”
*GlobalData’s 2020 market pulse survey – Asia-Pacific – published 1 September 2020
*2Combined responses: “I try to consume a moderate amount” and “I am trying to reduce my intake as much as possible”
*3Combined responses: “I try to consume a moderate amount”, “I am trying to reduce my intake as much as possible”, and “I avoid this entirely”
Despite the initial scare for the beer and cider market, expectation is that new 2022 forecasts, which falls short of the original baseline expectations, could have been much worse, says GlobalData, a leading data and analytics company.
According to the company’s recent (June 5) COVID-19 adjusted forecasts, the global beer and cider market will recover to 2019 value by 2022, reaching US$630.4bn in 2022; this represents a difference of -US$55.4bn against the previous baseline value of that same year*.
Aaron Bryson, Consumer Analyst at GlobalData, comments: “The substantial shrinkage is a reflection of the damage caused by a nonexistent foodservice channel throughout much of the year. In contrast, consumer confidence, which was initially decimated but rebounded relatively quickly, saw consumers retreating to the comfort of their own home with their favorite brands of beer and cider, as opposed to at the local pub.”
According to GlobalData’s Week 10 COVID-19 tracker consumer survey, published on June 3, 43 % of global respondents still expect the situation to get worse over the next month in their respective countries*2. Despite this, consumers purchasing habits in relation to beer and cider have largely been maintained. The same survey found that 45 %*3 of respondents have been purchasing the same amount or more beer, since the outbreak of COVID-19. In contrast, only 28 %*4 of respondents stated that they had reduced or stopped buying beer since the outbreak.
A similar story is seen with cider. The survey found that 33 %*3 of respondents had maintained or increased the volume of cider they purchase, and 28 %*4 had also reduced or stopped purchasing cider, since the outbreak.
Bryson continues: “The original concern displayed at the beginning of the outbreak had limited longer impacts upon beer and cider sales. A key reason being that, at home drinking is part of a routine for certain consumer cohorts in which they derive both pleasure and comfort. Something which most people have been looking for since the outbreak.”
Whilst the outlook for the beer industry is expected to lag behind pre-COVID-19 expectations, the immediate fallout, which posed a challenging landscape for big and small players alike, has largely leveled out. Consumers have shown a preference to fall back on familiar brands which they derive enjoyment from, with a willingness to pay a premium price, instead of switching to cheaper alternatives.
*GlobalData’s COVID-19: COVID-19 Impact Market Model – Consumer Goods – June 5 update – value US$
*2GlobalData’s Coronavirus (COVID-19) Tracker Consumer Survey – Week 10 (June 3) – global – a bit/lot worse responses combined GlobalData’s Coronavirus (COVID-19) Tracker Consumer Survey – Week 10 (June 3) – global –
*3started buying/same/more/significantly more/stockpiling responses combined,
*4 buying slightly lower/significantly lower/stopped altogether responses combined
Data is adjusted weekly following COVID-19 developments, therefore subject to change
The incorporation of sleep-friendly ingredients in food and drinks is expected to have future potential as it closely aligns with many consumers’ want for a better night’s rest through natural methods, according to GlobalData, a leading data and analytics company.
According to the company’s Global 2019 Q3 Consumer Survey, a notably higher proportion of Gen X and Gen Y consumers worldwide (79 %) are concerned about tiredness/fatigue than the retired Silent Generation (58 %). Among Gen Y, the pressure that comes with starting a new career, combined with a typically higher propensity to watch television or stream apps, could play a part in preventing regular sleep, leading to fatigue in day-to-day life.
GlobalData’s report, ‘Foresights: Night-Time Foods and RTD Beverages’, highlights a growing awareness among consumers that their diets can have a major impact on their sleeping patterns.
New health trend opportunity as sleep-friendly ingredients enter beverages and snacking, says GlobalData
The incorporation of sleep-friendly ingredients in food and drinks is expected to have future potential as it closely aligns with many consumers’ want for a better night’s rest through natural methods, according to GlobalData, a leading data and analytics company.
According to the company’s Global 2019 Q3 Consumer Survey, a notably higher proportion of Gen X and Gen Y consumers worldwide (79 %) are concerned about tiredness/fatigue than the retired Silent Generation (58 %). Among Gen Y, the pressure that comes with starting a new career, combined with a typically higher propensity to watch television or stream apps, could play a part in preventing regular sleep, leading to fatigue in day-to-day life.
GlobalData’s report, ‘Foresights: Night-Time Foods and RTD Beverages’, highlights a growing awareness among consumers that their diets can have a major impact on their sleeping patterns.
Ramsey Baghdadi, Consumer Analyst at GlobalData, comments: “As fatigue and tiredness are such a high concern for consumers globally, foods and beverages with ‘sleep-friendly’ claims will perform well in an otherwise highly saturated market, as they create a point of differentiation against traditional energy-boosting counterparts.”
Younger consumers are most vulnerable to feeling sleep deprived due to their hard-working, digital-orientated lifestyle. As a result, manufacturers in the past year such as the sleep-easy ice cream brand Nightfood and sleep-friendly ready-to-drink (RTD) brand Snoooze, have been focusing on foods and beverages specially designed to be consumed shortly before bed to improve sleep patterns.
Baghdadi states: “Such products are also an innovative example of how manufacturers can stand out from the competition by highlighting unique benefits to consumers such as specific lifestyle/health benefits, as product specificity is a key driver in consumer purchasing behavior. Manufacturers should use more natural ingredients in their products as a significant proportion of consumers globally are concerned about chemical/pharmaceutical sleep solutions, following global trends towards simpler and more natural lifestyles.
“The key to these sleep-friendly snacks is that they contain more plant-based ingredients that claim to improve digestion, natural melatonin levels and are low in sugar, leading to a deeper sleep.”
Ramsey Baghdadi, Consumer Analyst at GlobalData, comments: “As fatigue and tiredness are such a high concern for consumers globally, foods and beverages with ‘sleep-friendly’ claims will perform well in an otherwise highly saturated market, as they create a point of differentiation against traditional energy-boosting counterparts.”
Younger consumers are most vulnerable to feeling sleep deprived due to their hard-working, digital-orientated lifestyle. As a result, manufacturers in the past year such as the sleep-easy ice cream brand Nightfood and sleep-friendly ready-to-drink (RTD) brand Snoooze, have been focusing on foods and beverages specially designed to be consumed shortly before bed to improve sleep patterns.
Baghdadi states: “Such products are also an innovative example of how manufacturers can stand out from the competition by highlighting unique benefits to consumers such as specific lifestyle/health benefits, as product specificity is a key driver in consumer purchasing behavior. Manufacturers should use more natural ingredients in their products as a significant proportion of consumers globally are concerned about chemical/pharmaceutical sleep solutions, following global trends towards simpler and more natural lifestyles.
“The key to these sleep-friendly snacks is that they contain more plant-based ingredients that claim to improve digestion, natural melatonin levels and are low in sugar, leading to a deeper sleep.”
Juice has been acknowledged as a rapidly declining soft drinks category, with volumes weakening by 3 % in 2019, compared to the same period in 2018, according to leading data and analytics company GlobalData’s UK Quarterly Beverage Forecast in Q4 2019.
Holly Inglis, Beverages Analyst at GlobalData, comments: “Although the juice category is free from the sugar tax levy in the UK, consumption has still seen a downward turn in recent years, with consumers opting for other soft drinks categories such as iced/ready-to-drink (RTD) teas and enhanced waters, although none of these promote lean tags.
Another finding from GlobalData’s surveys include that a total *43 % of UK consumers claim they pay a high to very high amount of attention to the ingredients used in the food and drinks they consume.
An attempted turnaround in 2020 is Tropicana Lean – a new juice variant that indicates a movement towards better-for-you beverages in line with current consumer beverage trends.This poses the question whether Tropicana is taking a leap of faith with promoting a lean juice, or in fact we will welcome a new entry into the soft drinks market that combines hydration with health.
Inglis noted: “Tropicana’s innovation comes soon after the brand’s release of Tropicana Whole Fruit in May 2019, which attempted to impact the market with its high-fibre claims.”
*GlobalData’s Q3 2019 Consumer Survey
Following the news that PepsiCo is set to buy Rockstar Energy Beverages; Andy Morton, Drinks Deputy Editor at GlobalData, a leading data and analytics company, offers his view:
“This agreement will fill a gaping hole in PepsiCo’s beverage portfolio just as The Coca-Cola Co looked to have the drop over its historic rival in global energy drinks.
“In recent years, Coca-Cola has taken a minority stake in Monster Energy owner Monster Beverage Corp and launched its own energy drink under the Coca-Cola brand. The moves targeted fast growth in energy that has stolen share from carbonated sodas such as Coke and Pepsi and threatened the traditional business strategies of the larger beverage multinationals.
“As Coca-Cola cosied up to Monster, PepsiCo’s lack of action in energy became more apparent. Energy offerings from PepsiCo so far have largely been from its Mountain Dew soft drinks brand, with niche consumers such as gamers served with the likes of Amp Game Fuel and athletes with a caffeinated version of Gatorade called Bolt24.
“The Rockstar acquisition hands PepsiCo an off-the-peg solution to its lack of a bespoke energy brand while offering new angles for those already in its portfolio. According to GlobalData, Rockstar accounts for just 4 % of the global energy drinks market by value, but the company offers a platform to bigger things.
“The purchase also sounds the starting gun for a new frontier in PepsiCo and Coca-Cola’s beverage war as the world’s biggest soda companies finally get serious in energy.
“For years, the global energy drinks market was dominated by the upstart Red Bull. Recently, however, Monster – buoyed by a sea of cash from domination in the US – has closed the gap by stretching its tentacles beyond the country, with exports boosted by a distribution agreement with Coca-Cola. With Rockstar now set to join PepsiCo, it too could become a global player and expand beyond its current few dozen export markets.
“There’s much to play for – according to GlobalData, the global energy drinks market grew by 8.9 % in 2018, making it the fastest-growing category in non-alcoholic beverages. That growth was driven by Asia (+18.7 %), Eastern Europe (+16.9 %) and Africa (+14.0 %). China, meanwhile, became the world’s biggest energy drinks market after overtaking the US, signalling that the real action in the category lies beyond PepsiCo and Coca-Cola’s developed markets.
“Prepare to be buzzed – the energy drinks showdown is going global.”
The UK non-alcoholic spirits category has grown to be worth £37m in 2019, up 506 % versus 2014, and is forecast to more than double in size again over the next five years, according to GlobalData, a leading data and analytics company.
David Harris, Consumer Analyst at GlobalData, says: “Younger generations are drinking less, with Gen-Z only strengthening this trend as they reach legal drinking age. This is hardly ground-breaking news. Adult soft drinks, premium juices and a growing range of high-quality non-alcoholic beers are all targeted at this demographic, in addition to older consumers who simply want to moderate their alcohol consumption.”
So what about consumers who don’t want a non-alcoholic beer, but still want an ‘alcohol-alike’ beverage? This may be at a party, on a night out, or at home when everyone else is enjoying their gin and tonics. This is the specific opportunity non-alcoholic spirits are targeting. Where craft beers targeted consumers turned off by mainstream German and US lager brands, non-alcoholic spirits aim to engage consumers who want to feel part of the party, but who don’t want a sore head in the morning.
Harris adds: “Talking of craft beer, what is notable is how the rise of non-alcoholic spirits mirrors the rise of craft beer, arguably the beverage trend of the last decade. With laser targeting of a specific need, from a specific demographic, there are clear similarities between non-alcoholic spirits and craft beer.
“Both target younger legal age consumers. Both target consumers who are either tired of, or have no interest in, the mainstream variant of the offering, and both use flashy, stylized and no-nonsense packaging to engage with their audience.”
Excited with the prospect, major players in spirits are increasingly looking to get involved, with William Grant and Sons launching their Atopia range, Pernod-Ricard launching Celtic Soul, as well as the Diageo-funded Seedlip, which has now expanded out of the UK and into overseas markets.
Retailers also seem to agree that this is a category to watch too, with Tesco, Lidl, Asda, and more major UK retailers all stocking at least one non-alcoholic spirit.
Harris concludes: “While this may not be the next craft beer, the opportunity is certainly there, and both brands and retailers agree that this in an opportunity which is too big to miss.
2020 will be a period of ground-breaking innovations in the food and beverage (F&B) sector, with a focus on health and sustainability, says GlobalData, a leading data and analytics company.
Hakan Demirci, Consumer Analyst at GlobalData, comments: “Over the last couple of years, we have seen vast strides in the development of technology for the F&B sector. This year is set to become a watershed year as these technological innovations experience an expansion in their application across the industry.”
With the year promising a flurry of innovations in the industry – from personalized nutrition to alternative proteins, GlobalData lists five of the top F&B trends to watch out for in 2020, ranked:
5) Personalized Nutrition:
“Personalized nutrition will aim to revolutionize consumption habits among health-conscious consumers using nutrigenomics. The future will see targeted nutrition accounting for both genetic and environmental factors, to maximize the nutritional value of certain diets for consumers.
“One example of this is a company called Sun Genomics, who are currently testing tailored probiotics by sequencing the human gut and analyzing the distribution of the different types of microbes.”
4) 3D Printed Food:
“While 3D-printed food has been around for quite some time, it is an expensive and time-intensive method of producing food. Nevertheless, in 2019, 3D printing of plant-based meat received heavy investment due to its efficiency in comparison to current methods of extrusion, and for its ability to replicate the texture of meat.
“Innovations in 3D-printing technology throughout 2020 will see an increase in speed to delivery, a reduction in costs and an expansion of the types of products that can be created using 3D printing.”
3) Alternative Proteins:
“As veganism continues to become mainstream, so too will efforts in replicating certain animal proteins. This will range from the development of egg white cell cultures to lab grown cultured meat – bypassing the impact on sentient animals.
“Throughout the year, we will see these methods replicating a more diverse and niche variety of meats. For example, Impossible Burgers released their first vegan pork in early January 2020.
“Moreover, investment in this sector will flourish in 2020 as a growing coterie of fast-food conglomerates pour funds into the research and development (R&D) of vegan alternatives to their own meat-based products.”
2) Traceability:
“The next decade will see the transparent documentation of a product’s life cycle. This will improve food safety, as potential bacteria-related hazards can be pinpointed for detection and eliminated with ease and speed. This will be achieved as technological innovations such as the Internet of Things (IoT) and blockchain improves in application and efficiency.
“For example, blockchain can map a products lifespan on the chain, providing a transparent chain of ownership for a particular asset. These records cannot be erased or altered, ensuring accountability throughout the whole process, an important aspect of transparency.”
1) Biotechnology:
“The advent of biomolecular sciences and improvements in genetic editing and sequencing will aid in the development of highly nutritious crops, with extended expiration dates and improving resistance against genetic and environmental diseases and infections.
“For example, a current innovation underway aims to improve the shelf life of melons with a non-GMO molecular breeding technique, seeking to halt the ripening process after cultivation whilst simultaneously preventing this from negatively impacting upon the taste of the final product.”
For many consumers, the desire to nurture and protect the environment has motivated the decision to follow a vegan diet. However, the ‘low carbon’ diet could potentially attract a greater following than veganism due its relatively more flexible approach to reducing the greenhouse gas emissions associated with our diets, says GlobalData, a leading data and analytics company.
In fact, when asked what they find to be an appealing food and drink claim, 60 %* of global consumers answered ‘low carbon footprint’, compared with 39 %* of global consumers who answered ‘vegan’.
Lia Neophytou, Consumer Analyst at GlobalData, says: “Whereas veganism does not permit the consumption of any animal or animal-derived products, the low carbon diet allows for the consumption of any food/drink items as long as they align with the broader goal of reducing the carbon emissions of one’s overall diet. This could include reducing meat and dairy consumption, increasing one’s intake of local foods, and reducing food and packaging waste.”
This diet also recognizes that not all vegan foods have a low carbon footprint. For example, exotic fruits which require importation from abroad. It is for this reason that Lele’s vegan café in London recently announced that it will no longer include avocado in its dishes to avoid ‘indirectly fuelling illegal deforestation and environmental degradation’.
The appeal of a low carbon diet therefore spans consumers who are already vegan and those who simply want to reduce their carbon footprint, hence its broader appeal.
Neophytou concludes: “In future, ‘low carbon’ certifications could become mainstream and serve as a way of verifying the environmental impact of food and drink. This goes beyond simply indicating the absence of animal or animal-derived products which vegan certifications signal.”
*GlobalData’s 2019 Q3 global consumer survey
As this year saw the rise of the sober-curiousness trend, non-alcoholic drinks such as wine waters have a great market potential, due to their natural antioxidants content and their functionality. Wine water, either still or sparkling, is promoted as healthy and naturally functional, with a distinctive wine taste. According to GlobalData’s Q3 2019 global consumer survey, 92 % of surveyed consumers consider that eating healthily creates a feeling of wellness and 60 % say they believe antioxidants have a positive impact on their health.
Ana-Maria Iscru, Consumer Analyst at GlobalData, explains: “A new water concept, wine water is different from alcoholic seltzers, non-alcoholic wine and fruit flavored waters, in that it does not contain alcohol but does have a wine-infused flavor, for a more sophisticated taste. The wine essence water from Wine Water Ltd., for instance, was released last year and has already sparked interest. The brand taps into a few consumer trends, namely the absence of alcohol, low sugar content, low calories and an elegant glass bottle packaging instead of plastic.”
Another slightly similar brand is Napa Hills, flavored water ‘with red wine’s natural antioxidants’, but without a wine flavour. PepsiCo also gave the trend a try, releasing a limited-edition rosé-flavored sparkling cola, which was served at the first edition of the BravoCon in November. Moreover, Walmart recently introduced a rosé wine drink enhancer, but it is not expected to come too close to the wine taste.
Iscru adds: “Wine waters are seen as much lower in calories and sugar than actual wine, enough to respond to the growing health & wellness demands. All of this while not ditching the classic wine taste that a lot of people love.
“The category is yet to grow, as there is not a large variety of wine waters, but it has potential in the way it is presenting itself: natural, sustainable and tasty. However, until wine water as a category grows globally, for now consumers are just left wanting more.”
Enhanced beverages are gaining a strong market position, especially since consumers are seeking out products that benefit their health. According to GlobalData, a leading data and analytics company, 59 %* of consumers in North America say they purchase products that help save them time and effort – but high sugar content is the price to pay.
Holly Inglis, Consumer Analyst at GlobalData, says: “With less time in the working day to exercise, beverages that support an on-the-go lifestyle are therefore likely to prove popular. Healthy lifestyle trends have boosted the industry, with frequent adoption of healthier beverages dominating social media channels and supermarket promotions.”
Research conducted by the National Health and Nutrition Examination Survey found that plain water should be the optimal beverage choice in weight loss. This suggests that consuming vitamin and mineral enriched beverages does not actually aid dieting.
Inglis adds: “Typically drinks that claim they have added vitamins, electrolytes, potassium, antioxidants and fibres often have more sugars than other beverage types. In some cases, these benefits can be obtained by plain water.”
According to GlobalData’s Q2 2019 USA Quarterly Beverage Forecast, a 5.1 % growth in 2019 is forecast for enhanced water, despite awareness of high sugar content. This supports Minesota State University findings that although individuals know that sugar sweetened beverages are detrimental to health, two per week (average) are still consumed per person. This indicates the bridged gap between intention and indulgence.
Inglis concludes: “If you are looking to hydrate after exercise, or are substituting carbonated soft drinks that are high in sugar, then yes, but if you are consuming it as a food supplement, or are seeking weight loss, enhanced beverages are unlikely to provide an all-encompassing benefit.”
*GlobalData’s 2019 Q3 consumer survey
Premiumization has developed as an excellent way forward for the brands to make consumers feel valued and special in the Asia-Pacific (APAC) region as the consumers are preferring and consuming high value products, says GlobalData, a leading data and analytics company.
Across the FMCG sector, be it food, or beverages, the brands are releasing new premium products along with exclusive offerings that elevate them above the national mass brands and compete as recognized premium products.
With the socio-eco diversification, the purchasing behavior of consumer has totally altered in different countries of the same continent. For instance, 76 % of consumers in China typically relish the opportunity to consume the highest-quality food & drink, often justifying a higher price point.
Shagun Sachdeva, Consumer Insights Analyst at GlobalData, says: “Asia-Pacific region has huge potential for growth due to population growth, rapid urbanization and rising disposable incomes in its emerging economies. High on the list of consumer preferences are high quality products with a luxurious feel and the products that offer greater convenience. The consumers also prefer to have products that pass stringent safety standards and are produced with environmentally sustainable practices.
Adapting to the changing demands and values of today’s modern shoppers, brands have realized the need to upgrade to premium offerings. Manufacturers have their eyes set on the premium market and targeting the middle-to-high income segment through host of value-adds to lure people to upgrade.”
Total drinks industry merger and acquisition (M&A) deals in Q2 2019 worth $2.11bn were announced globally, according to GlobalData, a leading data and analytics company.
The value marked an increase of 74.6 % over the previous quarter and a drop of 44.1 % when compared with the last four-quarter average, which stood at $3.78bn.
Comparing deals value in different regions of the globe, North America held the top position, with total announced deals in the period worth $2.01bn. At the country level, the US topped the list in terms of deal value at $2bn.
In terms of volumes, Europe emerged as the top region for drinks industry M&A deals globally, followed by North America and then Asia-Pacific.
The top country in terms of M&A deals activity in Q2 2019 was the US with 18 deals, followed by the UK with seven and Spain with four.
At the end of Q2 2019, drinks M&A deals worth $3.32bn were announced globally, marking a decrease of 87.2% year on year.
Drinks industry M&A deals in Q2 2019: Top deals
The top five drinks industry M&A deals accounted for 98.2% of the overall value during Q2 2019.
The combined value of the top five drinks industry M&A deals stood at $2.08bn, against the overall value of $2.11bn recorded for the quarter. The top announced drinks industry M&A deal tracked by GlobalData in Q2 2019 was E. & J. Gallo Winery’s $1.7bn asset transaction with Constellation Brands.
In second place was the $300m acquisition of Dogfish Head Brewery by The Boston Beer and in third place was Cafento Coffee Factory S.L’s $33.58m acquisition of Java Republic.
The $21.62m asset transaction with McLeod Russel India by Luxmi TeaLimited and Lalique Group’s asset transaction with The Glenturret for $20.39m held fourth and fifth positions, respectively.
GlobalData’s Q4-2018 Quarterly Beverage Forecast reported a remarkable 6 % volume increase in consumption for UK Squash and Syrups in 2018*, the first time the category has seen growth since 2011.
Roisin Vulcheva, UK & Ireland Research Manager for Consumer at GlobalData, says, “This was an impressive result, particularly as Squash and Syrups have experienced several years of consecutive decline. The strong performance was driven by an array of factors including good weather, growth in adult soft drinks and new product development. Throughout 2018, there was a raft of premium launches helping Squash and Syrups to stage a turnaround and inject value growth back into the category.”
Throughout the year, growth was positive across all quarters, however summer was the key period of trading for the category, with the UK recording one of the hottest summers on record which helped to boost consumption.
Britvic was also instrumental in driving growth throughout the year. It invested heavily in Squash and Syrups, expanding its offering to appeal to a more mature demographic, in what is typically a category largely geared towards children. Britvic launched several new products targeted towards the adult segment under its Robinsons brand in 2018.
Interestingly, still ready-to-drink drinks, which include brands such as Capri Sun and Robinsons Fruit Shoot that also cater to the children’s demographic, declined by 10 % in volume terms for the year*, largely impacted by concerns around sugar and artificial sweeteners.
Vulcheva concludes, “Clearly the introduction of new flavours, packaging and more premium propositions helped to drive growth in the category which was further boosted by a hot summer. Looking ahead to 2019, the Squash and Syrups category is one to watch as it ticks the box in relation to several current key trends in the UK soft drinks market. More innovation is expected from branded players throughout 2019, with private label brands expected to emulate the efforts of branded players.”
*UK Quarterly Beverage Forecast Q4-18
The PET bottle has emerged as the preferred packaging for drinks among Japanese millennials due to its ease of use and eco-friendly nature. Against this backdrop, beverage giant Suntory Beverage & Food Limited (SBF) is looking to capitalize on the growing popularity of this packaging format to drive ready-to-drink (RTD) coffee sales amid a shrinking RTD market in Japan, says GlobalData, a leading data and analytics company.
According to the company’s report: Success Case Study: Suntory Craft Boss – Craft-style ready-to-drink coffee resonates with Japan’s Millennials, Japan is the largest RTD coffee market in the world, selling 3,574 million liters in 2017. However, the market volume growth in Japan has been slow in recent years and is expected to decline at a compound annual growth rate of -0.89 % between 2017 and 2022. On the other hand, GlobalData’s Market Analyzer reveals that the percentage of sales of PET bottled RTD tea & coffee has increased by 2.81 % from 6,659.30 million liters in 2017 to 6,851.58 million liters in 2018.
Suntory launched Craft Boss, a new range of RTD coffee under the Suntory Boss brand, in April 2017. The Craft Boss range is sold in PET bottles rather than metal cans to offer new consumption experience to millennial consumers.
Shagun Sachdeva, Consumer Insights Analyst at GlobalData, says: “The company’s move to launch craft-style coffee drinks in a PET bottle format is part of strategic product positioning to tap new consumer groups, particularly millennials. This clearly demonstrates that it has understood the importance of innovation in terms of appeal and packaging format, in line with the demographic changes in Japan.”
Craft Boss PET bottled coffee series crossed 27 million cases in 2018. It was the biggest driver of Boss coffee sales, which crossed 100 million cases last year. The success of this series helped Suntory compensate decline in other products, with a very strong growth of 8 million cases in 2018 compared to the previous year.
Sachdeva concludes: “Suntory is one of the first major manufacturers to react to the slow market growth of RTD coffee in Japan. The company has quickly identified the market gap and is catering to the evolving demands of the white-collar millennials to take advantage of the appealing market segment. Simply put, the company used incremental innovation and customer-centric strategy to gain a clear, competitive edge over rivals.”
The craft beer boom, which is primarily driven by younger consumers, is having spill-over effects on other industries, including the coffee sector. Within the sector, cold-brew coffee is gaining popularity. However, given its unique taste profile and perceived health benefits, opportunities exist for cold-brew producers to appeal to young as well as older age group consumers, finds leading data and analytics company GlobalData.
Since the brewing process does not require heat, the resulting cold-brew coffee drink has a smoother taste which often reduces the need for creamers, sugar or sweeteners. As a result, several consumers perceive cold-brew coffee to be a healthier alternative to traditional coffee.
GlobalData found that health and fitness is a high priority for younger consumers, hence the potential health benefits of cold-brew coffee are likely to be a key motivator for purchase among this cohort. This reflects in its 2017 Q4 global consumer survey, which shows that 21 % of consumers are interested and already purchasing beverages with cold-brew claims, while a further 27 % are interested but not yet actively buying such products.
Matthew Perry, Consumer Analyst at GlobalData, explains: “A number of consumers are now looking for more premium and indulgent soft drinks which demonstrate quality, authenticity and artisanal production methods. The fact that cold-brew coffee has been around for hundreds of years may heighten the appeal of the beverage among younger consumers driving the craft movement.”
In particular, younger consumers aged between 18 and 34 are more interested in cold-brew, with 28 % globally interested and actively buying such beverages, reveals the survey. This is 11 percentage points higher than those aged 35 and over.
Perry concludes: “Given the popularity of cold-brew among younger age groups, producers may wish to target these consumers with their offerings. However, it is important to understand that while the unique processing methods and sensory aspect of cold-brew may encourage younger consumers to experiment with the beverage, cold-brew coffee’s smoother, less acidic taste may resonate with older consumers who may prefer milder flavors and products which require less sugar.”
