Beverage manufacturers are under pressure to adapt to influential health movements. Image courtesy of Sarsmis

Soft drinks manufacturers are under increasing pressure to adapt, as rapid social and lifestyle changes drive consumers away from traditionally popular segments. Following continued backlash against sugary beverages and artificial ingredients, health has become a key purchase motivator for many shoppers. With consumers now increasingly aware of the health implications associated with soft drinks categories, concerned drinkers are frequently shunning vilified categories like carbonates and juices in favour of ‘healthier’ choices, such as bottled water, ready-to-drink (RTD) coffee and tea and functional soft drinks.

In order to counter the growing demand for healthier, more beneficial soft drinks, as well as the general boredom associated with traditional beverage options, innovation is key. But while consumers are more willing to experiment with ‘healthy’ or unusual soft drinks, convincing consumers that they are not sacrificing flavour for function is a challenging task for brands.

So how can brands reignite interest in soft drinks and re-engage with consumers? With beverage subscriptions, hyper-targeted waters and aroma-releasing technology predicted to make waves in the sector over the next five years, we take a look at the key trends driving innovation in the category, as identified by senior consumer insight analyst Melanie Felgate in the recent GlobalData report, ‘Top Trends in Soft Drinks 2017’.

Healthy hydration formats

“Health-conscious consumers seek out products that they perceive to be ‘better’ than regular soft drinks.”

For many consumers, health is a driving factor when it comes to purchasing soft drinks. In the wake of the widely publicised backlash against sugar, shoppers are becoming increasingly aware of the benefits and consequences associated with ingredients used in their beverages. This rising health awareness has sparked interest in beverages that are perceived to be ‘good-for-you’ or ‘better-for-you’.

Aligning with the desire for healthy or enhanced offerings is vital for soft drinks manufacturers, particularly in segments such as juice and carbonates, which have been vilified for their sugar content. In pursuit of a ‘cleaner’ lifestyle, health-conscious consumers seek out products that they perceive to be ‘better’ than regular soft drinks, preferring options that offer natural rather than artificial ingredients, as well as low-sugar or sugar-free products. Using naturally sweet ingredients like coconut water and promoting the inherent natural and nutritional benefits of fruit and vegetable ingredients can help brands to counter the sugar backlash and establish a ‘better-for-you’ product image.

Moreover, functional beverages that are specifically marketed as ‘good-for-you’ are gaining popularity among convenience-driven consumers. With functional beverages, manufacturers can use the healthy halo associated with natural, organic and raw ingredients to overcome negative perceptions and target particular consumer health concerns, such as immune support or digestion.

Fermented drinks for gut health

Digestive health is a growing concern for a number of consumers. But, while interest in fermented beverages is growing, with 85% of consumers globally interested in food and drink that improves digestive health according to GlobalData’s 2015 Q4 global consumer survey, only 45% of respondents actively buy such products.

There are opportunities for manufacturers to convert interest among the remaining 40% of consumers into consumption through more targeted innovation. Adding gut-friendly ingredients such as probiotics or dietary fibre can help brands to enhance the digestive benefits of beverages. The appearance of fermented methods and ingredients, such as apple cider vinegar, can also help brands establish a healthier halo around gut-friendly beverages.

Moderation and avoidance driving demand for adultification

Health-conscious consumers are becoming increasingly aware of the negative consequences of drinking alcohol. Combined with the gravitation towards ‘better-for-you’ beverages, this has spurred many to make a conscious effort to reduce their alcohol consumption, with some opting to avoid alcohol completely.

Consequently, as more consumers seek out non-alcoholic options, demand has increased for sophisticated, lower alcohol and ‘alcohol-free’ offerings that address the social, political and economic concerns associated with alcohol consumption, without compromising the taste and enjoyment consumers expect from these drinking occasions.

With interest in ‘adult’ soft drinks on the rise, manufacturers have an opportunity to capitalise on the popularity of a burgeoning movement. Using flavour profiles and sophisticated packaging designs that mimic those of alcoholic beverages, brands can establish adult soft drinks products premium alternatives to alcohol that are suitable for both everyday consumption and special occasions.

Cold brew and cold press beverages

“High-pressure processing has revolutionised the juice category.”

Over recent years, high-pressure processing has revolutionised the juice category. In contrast to products made using traditional heat pasteurising methods, cold-pressed juices retain more nutrients and offer consumers a fresher taste. As a result, consumers now associate the term ‘cold’ with a healthier and more premium image.

From cold-pressed to cold-brewed, the term is forecast to grow in popularity as consumer interest in fresh and raw claims continues. Notably, ‘cold’ beverages have significant potential in RTD coffee and tea. Renowned for its smooth taste and rich caffeine content, cold-brewed coffee has already been touted the next big trend in RTD coffee. In fact, industry heavyweights including Starbucks and Coca-Cola are already on track to expand their cold beverage offerings over coming years to capitalise on the growing popularity of ‘cold’.

Savoury and spicy flavour profiles

As consumers turn away from sugar and artificial sweeteners, soft drinks manufacturers have begun to turn up the heat with unusual flavours profiles that require less sweetening. Spicy ingredients such as chilli, ginger, cinnamon and turmeric can appeal to experience-driven consumers looking for soft drinks that provide unusual or experimental drinking experiences.

According to GlobalData, more than half of consumers worldwide claim to sometimes or often experiment with new or unusual flavours when buying food and drink products. Combined with the impact of rising health concerns driving drinkers away from sugary beverages, this experimental trend opens up new opportunities for brands to stay ahead of changing consumer preferences by introducing more savoury, salty and spicy flavour profiles, using on-trend ingredients that drinkers perceive to be good for their health.

The salty-and-sweet trend has gained significant attention over recent years. Most notably used in the food industry, the combination of sweet and savoury flavours has also started to gain popularity in soft drinks, with products such as Fanta’s salted watermelon offering in Japan, which launched in 2016. While the carbonated beverage is still sweetened, by adding salt the brand was able to offer an unusual sensory experience that stands out from other carbonates without deterring health-conscious drinkers.

Flavour infusions target low-sugar and low-calorie demands

“Plant-based ingredients such as botanicals, herbs and nut milk have been gaining traction.”

While the majority of consumers may be aware of the health advantages of drinking unsweetened beverages, taste remains a crucial part of the overall drinking experience. With more than half of consumers actively choosing to limit or avoid sweeteners, addressing important taste concerns that can deter drinkers from choosing unsweetened beverages is a challenging task for manufacturers.

To entice flavour-focused drinkers, brands have begun to explore the appeal of more subtle flavour infusions in drinks, such as infused waters, to provide a hint of flavour without sugar or sweeteners. These innovative flavour infusions can help to make plain water exciting for health-conscious consumers.

A number of brands, including Hint Water in the US, have already begun to bridge the gap between plain water and other soft drinks. Founded in 2005, Hint was the fastest-growing flavoured water brand in the US in 2015. With its range of naturally flavoured and sugar-free still and sparkling waters and energy beverages, the brand has successfully stayed ahead of the trend through continued innovation that targets the growing demand for drinks that are both flavoursome and low-sugar.

Plant-based ingredients tap into the consumer desire for ‘natural’ drinks

As consumers continue to shun heavily processed and sweetened beverages in favour of offerings that they perceive to be ‘natural’, plant-based ingredients such as botanicals, herbs and nut milk have been gaining traction in the soft drinks market. Keen to tap into the growing popularity of wider trends, such as vegan and flexitarian diets, manufacturers have begun to explore new opportunities with offerings that align with the consumer demand for healthy and ‘natural’ products.

The majority of global consumers view botanical and plant extracts as beneficial ingredients that can have a positive impact on their health when used in FMCG products. While the appearance of such ingredients has helped to drive growth and innovation in plant waters, which have branched out from the coconut trend into tree waters, the use of plant-based water and milk in RTD tea and coffee can also help brands to target consumers who actively try to avoid dairy or animal products.