Building a national food strategy: Consumer trends and the beverage division
Gary Fread continues his look at consumer trends and their influence on a national food strategy, this time with an eye on the beverage sector
In the past several articles, I have been looking at the consumer food trends that are affecting the food industry and need to be considered as key drivers of the national food strategy. Having looked at several of the sectors, I want to look at one of my favourites this time, the beverage sector, including both non-alcoholic and alcoholic products. And perhaps you can guess why it’s one of my favourites. It includes carbonated soft drinks, bottled waters, bottled juices, teas and coffee, plus breweries, wineries, and distilleries. It’s a complex sector. I speak here a lot from personal experience.
On the non-alcoholic side, the consumer group having the biggest influence is probably the Healthies. So what have we seen, and what will we be seeing? Well, I would say that carbonated soft drinks have been affected by the Healthies’ concerns about sugar and its health effects, leading to many people drinking less soda pop. And we’ve seen pop products introduced that are lower in sugar content as a result. But it is still a key part of the beverage sector and will likely remain so.
But the Healthies are also looking elsewhere more and more. For example, exotic fruit juices and juice mixes are becoming more standard than years ago, when about all you could get was orange, grapefruit or apple juice. One of my favourites for a long time has been an orange, peach, mango blend. As a Foodie, I also like the variety and innovation that goes along with that blend and others available at the supermarket.
The Healthies have also contributed to the increase in the consumption of bottled waters – spring water, mineral water, artesian water, carbonated water, and on and on. One now sees people out for a walk or driving their car with a bottle of water in their hands. “Coffee breaks” are now sometimes “water breaks.” People sit in their offices with a bottle of water within reach much of the day.
And of course, we’ve seen the evolution of sports drinks (again, the Healthies, but from a different aspect because they need the drink to get them through their workout) and energy drinks because we are so stressed much of the time. I know I will have an energy drink with lunch after a hard morning’s work, just to help me get through the afternoon.
And then there’s the tea and coffee issue. I would say that tea, both hot teas and cold teas in bottles, have taken off. I think that is partly because of the Newbies in the market who come from cultures where tea is the most popular drink, but also the Foodies who like to try different things. I know I now have a green tea/herbal blend as my normal “first drink” of the day. I tried it because of my Foodie tendency, and I liked it.
So has coffee taken a hit because of the Healthies? I would say have a look at the prevalence of Starbucks, Tim Horton’s, and Second Cup and I think you would agree the answer is no (are you really a Canadian if you don’t know what a “large double double and a maple dip” is?). Partly it is the Speedies and the Cheapies keeping coffee going, but it is, again, also the Foodies who go to Starbucks and order the special flavoured cappuccinos and lattes. At the local Starbucks where I go, as soon as I walk in the door the staff start making a Tall Vanilla Latte.
The alcohol market
So what about the alcoholic beverages? Well, again, several trends seem to be clear. The Healthies are probably not a major factor here for some reasons most of us would understand. They are trying to decrease their consumption of alcohol.
In the brewing sector, the craft beers certainly appeal to the Foodies. There are a lot of very successful craft breweries all over Canada. Some are being bought up by foreign multi-national companies because they have been so successful. But the small craft brewers remain a major force in the brewing sector. And, of course, that helps the barley and malt segments of the agri-food industry. Who does craft beer appeal to? Often it’s the Foodies, but the Greenies, who are looking for local foods, also contribute to the craft brewery success. But what a variety of beers we produce in this craft brewing business!
And of course, the Canadian wine sector has developed significantly on a global basis over the past decade. It now operates in at least six provinces across Canada, and each has unique characteristics. The Niagara region is probably the best known internationally, and has reached a global level of excellence due to the upgrading of the types of grapes grown as a result of a conscious effort on the part of the sector to globalize. But other provinces are also doing well. The whole “terroir” issue starts to come into play, as it has existed in the wine sector globally virtually forever. Again, as a Foodie, I often buy Canadian wines, not because they are less costly than imports, but because they are interesting from a taste perspective. The Greenies who are interested in local products are also big buyers of Canadian wines.
And how about the distilling segment of the beverage sector? Well, as someone who lived in Kentucky for a few years when I was younger, I became a big fan of bourbon. And Scotch or Irish whiskies were leading selections for many years as well. But now, what do I drink? Well, Canadian rye has certainly become a frequent choice. Canadian whisky is now recognized as one of the great types of whisky. So who is drinking it? I would say the Foodies are a key factor, as well as the Greenies (the local food trend again).
So are there opportunities for the Canadian beverage division? I would say yes. In the non-alcoholic segment, the Healthies are the key drivers. In the alcoholic segment, it is probably the Foodies. Are there export opportunities? Well, as we gain global quality status in virtually all of the segments, the “Canada brand” will help to carry us into the export market more and more. Yes, the opportunities are there.
Gary Fread is president of Fread & Associates Ltd., consultants to the food industry. He has spent 25 years in management positions in the food processing industry, with a background in sales, logistics, purchasing and technical areas. He has worked with Procter & Gamble, Campbell Soup and Morrison Lamothe, and is the past president and CEO of the Guelph Food Technology Centre. He is active in many food industry associations and organizations, serving on the boards of several. Contact him at firstname.lastname@example.org