By Don Douloff
It’s hard to remember a time so rife with innovation in the non-alcoholic beverage segment as it is today, as manufacturers respond to consumers’ shifting expectations. Drinks aren’t just for slaking thirsts anymore, and increasingly must bring added value.
Function and fun
“Functionality is front and centre, and is almost becoming mainstream,” says Louis Giguère, vice-president, Innovation and Portfolio Strategy, at Enzyme, a Montreal-based food and health marketing agency. “In the old paradigm, beverages were for hydration. In the new paradigm, beverages are for functionality: food replacement and quality of nutrients.”
Falling into this category is the Special K breakfast meal-replacement beverage containing vitamins, minerals and proteins, and the antioxidant-rich Cheribundi line of drinks made from tart cherries. In the U.S., Cheribundi’s sales are growing at “high double digits,” says Giguère.
Protein is also making its entry into the beverage category, notes Giguère, pointing to Bolthouse Farms’ protein-packed smoothies that “are not a meal replacement, but just a good snack.” In addition, nutrient-rich foods such as chia seeds are finding their way into beverages. These types of drinks, combining functionality with pleasure, are growing at “high double digits,” according to Giguère. Popular flavours include mint and ginseng.
Another new paradigm, says Giguère, is drinks featuring soluble fibre from oats, offering consumers a “potent snack.” Products include Oatworks’ fruit smoothies and the Oat Drink line.
Finally, sugar is on the radar big-time, says Giguère, due to the United Nations’ World Health Organization guidelines recommending consumers eat no more than 16 g of the sweetener daily — the equivalent of one can of soda pop. Consequently, beverage manufacturers are striving to lower sugar content “without compromising taste.” Offering a possible workaround is stevia, a sweetener lower on the glycemic index than other types of sugar and now legal in Canada, he notes.
In the raw
Over at Whole Foods Market, “raw is leading the category,” says Rob Luscombe, grocery/whole body buyer for the specialty retailer’s Ontario stores. Sales of raw juices — which either aren’t pasteurized at all or are processed via water-driven high-pressure pasteurization, retaining fruits’ and vegetables’ nutritional properties — have been increasing for several years at Whole Foods’ Ontario stores.
Toronto’s Live Organic Food Bar produces a line of raw juices sold at retail, including Whole Foods. And earlier this year The Good Press and Greenhouse Juice Co. both launched Toronto storefront retail operationsoffering their raw, unpasteurized fruit and vegetable juices made by hydraulic cold-pressing. Meanwhile, Mississauga, Ont.-based Juice Matters launched its own line of cold-pressed fruit and veggie drinks designed for pre- and post-workout and meal replacement.
The raw-juice category is still on an upswing and seems poised to remain strong for some time, says Luscombe. In the category, “anything green is big,” with kale leading the way. “We’re starting to see more functional beverages as demand continues to increase. People want to get nutritional value from their drinks. They want food to do something for them.”
Noteworthy functional beverages include Kona Red, made from Hawaiian coffee berries and very high in antioxidants, and protein drinks, “an up-and-coming category,” says Luscombe, who cites Rumble, a whey milk-based beverage whose ready-to-drink (RTD) format frees consumers from having to make a protein shake from scratch.
The “poster child for functional beverages,” however, is coconut water, an all-natural electrolyte replacer that has “grown by leaps and bounds,” says Luscombe. Coconut waters flavoured with mango, pineapple and chocolate are on the market, but when it comes to sales, plain, pulp-free varieties rule, he adds.
Other growing categories at Whole Foods include organic apple cider vinegar-based drinks, in flavours such as ginger spice and apple cinnamon, from Bragg Live Food Products; the Mamma Chia line; and beverages based on kombucha (fermented tea), some of which also feature chia seeds.
Released earlier this year in the Canadian market were two zero-calorie vitamin waters, Rise Orange, containing vitamin C and calcium, and Squeezed Lemonade, containing vitamin B and zinc. Sweetened with stevia and erythritol, the vitamin waters are sold under the Glacéau label, a Coca-Cola Co. brand.
In all, non-alcoholic beverages represent a significant product segment, with Canadian retail sales in the fourth quarter of 2013 totalling almost $903-million, according to figures provided by Statistics Canada.
Overseas, innovation is rampant in the sector. In June, a line of inventive bubble teas took top spot at DrinkPreneur Live 2014. Held in London, this was the U.K.’s first specialized start-up accelerator for the RTD beverage category.
DrinkPreneur judges awarded best-in-show honours to the OOb line that incorporates nutritional elements into Taiwanese-style bubble tea. Formulated during 14 months of R&D, the line features green tea loaded with tapioca-pearl “bubbles” flavoured with superfruits: apple green tea with lychee pearls; cranberry green tea with acai pearls; and mango green tea with acerola pearls.
Ieva Petkevičiūtė, new product development manager at My Drink Beverages, a beverage development company based in Kaunas, Lithuania, reports a key trend towards natural energy drinks featuring ingredients such as guarana (made from a climbing plant in the maple family), natural-source caffeine and extracts of green coffee bean, green tea and yerba mate (a plant in the holly family).
Herbal elements are common in soft drinks and weight-management beverages, says Petkevičiūtė. Weight-management drinks featuring ingredients such as L-carnitine (biosynthesized from the amino acids lysine and methionine) and green tea extracts are especially strong. Also trending overseas are beauty drinks containing collagen, hyaluronic acid, zinc and antioxidants, notes Petkevičiūtė.
Cecilia Martinez, regional research co-ordinator at Bath, U.K.-based Zenith International food and drink consultancy, says carbonated soft drinks (CSDs) remain the largest and most popular category of non-alcoholic beverages, but “have been losing ground to other categories perceived to be healthier such as juices or flavoured waters. Innovation in categories other than CSDs has also helped shift preference away from CSDs.” As obesity has become a global issue, consumers around the world are looking for beverages with lower sugar/calorie content or those that are healthier, she says.
In the U.S., cold-brew coffees are also gaining traction. These products are either sold “black” in RTD format or mixed with sugar or milk/creamer. “They are aimed at coffee connoisseurs looking for freshly brewed flavour and thus command a premium price over other RTD coffees.” More recently, some cold-brew coffee brands have introduced flavoured concentrates (such as Dave’s Coffee syrups) that allow consumers to customize their coffee, she says.
In June, Nescafé launched the milk-rich Shakissimo line of RTD Latte Espresso, Latte Macchiato and Latte Cappuccino chilled coffees in select European markets. Shakissimo’s cups are designed to be shaken, creating a creamy froth.
Martinez adds that beverages offering a clear benefit or function, and whose benefits can be seen, felt or measured in some way, stand to benefit the most. Juice-cleanse beverages, many of which are vegetable-based, are selling well, and vegetable-fruit juices “have also become popular among moms as a way to ensure children consume more vegetables, but without being aware of doing so.”
This article appeared in the print issue:September 2014 edition, The Beverage Report section