5 beverage trends you need to know

Beverage Trends

What’s really going on in the beverage market today? Here, we explore the major trends across soft drinks, juice, beer, wine, bottled water and beyond.

  1. Soft drinks slowing down

The Australian soft-drink market needs a shakeup. On the surface, it seems that new companies are entering the scene, but Roy Morgan Research shows that Coca Cola is still the soft drink of choice for Australians and New Zealanders aged 14 and over. In fact, studies show that, in Australia, the five most popular soft drinks are cola flavoured.

That said, growth has been limited in the sector — thanks in part to aggressive pricing and changing consumer trends, according to IBISWorld. Other factors include greater penetration of private label and value products, as well as all-round healthier beverages and packaged water. Canadean predicts worldwide consumption of packaged water to overtake carbonates and reach over 233 billion litres in 2015.

Business takeaways: Beverage businesses need to be quick to adapt to market changes and shifting consumer trends. Tastes change, and it’s only by innovating and launching new products that businesses will be able to take a piece of the pie. For example, Coca-Cola Life was recently launched as an attempt to win over increasingly health-conscious consumers. According to Coca-Cola’s local marketing director, Lisa Winn, this product is for “balance seekers” — that is, those who have concerns around sugar, but don’t like the different tastes of Diet Coke and Coke Zero.

  1. New flavours for bottled water

 The bottled water industry might be growing — and Roy Morgan Research has shown 4.9 million Aussies drink bottled water in an average seven days — but it’s not without its challenges. Increasing competition from private-label brands and the environmental concerns of consumers continue to torment the industry. However, despite the cluttered market, some companies are finding a way to differentiate themselves and raise the bar on innovation.

Thankyou Group is one such company, which uses profits from sales of bottled water (and now other products too) to fund safe water projects in developing countries. And let’s not forget those liquid water enhancers by Schweppes. These handy pocket-sized flavours can be mixed into water on the go, appealing to consumers’ desires for convenience and customisation.

Business takeaways: There’s no denying that bottled water is a cluttered market, yet there are still opportunities for businesses to set themselves apart – whether with new flavours, social enterprise or unique packaging. (See Wet Fix’s approach, or read the case study.)

  1. Turbulent wine times

The wine sector has long been dependent on the Australian dollar. In the mid-1980s, an increase in exports took advantage of the historically low Australian dollar. But this dropped again in the mid-2000s with an appreciated Australian dollar, among other factors, such as drought, high water costs and the infamous GFC. Now the dollar has once again depreciated, the wine sector is looking up. However, at the same time, countries such as Spain, Argentina, and Chile are infiltrating market with low-priced wine, and many Australian producers are struggling to compete. You may find this article looking at five trends disrupting the wine industry — and what that means for producers – interesting.

Business takeaways: To thrive and grow, the wine sector needs to stop relying on the Aussie dollar. Producers need to look at ways to sustainably grow their profits. In addition to some investment in innovation, wine producers should be looking at how to market the USP of their wine offerings. (Bailey’s new organic Shiraz is a good example.)

  1. Juicing the health market

Fluctuating fruit prices, cost pressures and competition from private labels have slowed growth for the juice sector. But as with soft drinks, one of the major issues facing juice makers is sugar. That Sugar Film is one example of the way sugar is being demonised across the food chain – and juice makers especially have come under attack.

Business takeaways: Juice makers need to consider how to appeal to increasingly health-conscious consumers. Nudie is one such brand that has targeted in the health conscious consumer with “no added sugar” and “no concentrate” in their product.

  1. Major shakeup for beer

Beer manufacturing is currently undergoing a major upheaval. Consumption is on the downturn, and imported, premium and craft beers have overtaken big mainstream brands in terms of market share. As with bottled water, beer manufacturers are looking to flavours and fusion products to differentiate their brands.

Meanwhile, in the craft beer corner, there are now 150 smaller breweries in Australia. Yet, while they are flourishing locally, they are struggling to overcome barriers to entry at a national level. Consumer advocacy group Choice says that Australia’s two largest brewers, Lion and Carlton & United Breweries (CUB), are in fact using local contracts to lock local craft brewers out of pubs.

Business takeaways: People are looking for beer with a difference — whether that’s something that tastes a little bit different or a beer with an authentic story. Beer and cider companies of all sizes should look at how to promote their unique brand essence, using marketing, packaging and labelling to build a strong connect with their market. Rebello Wines’ award-winning Cheeky Rascal Methode Traditionelle Cider is a great example.

  1. Coconut Water on the Rise

Coconut water is now a mainstream category, according to Innova Market Insights. That fact in itself shows how the market has grown since Nudie first introduced this exotic beverage in Australia five years ago to meet the growing demands of the health-conscious consumer. Browse the supermarket shelves today, and you’ll find a huge number of coconut water brands. And it’s not just water — beverage manufacturers are looking to coconut in all its forms to boost product sales. According to Innova, coconut flavours and ingredients featuring in over 4% of global soft drink launches in the 12 months ending June 2014 and over 6% of global drink launches in 2014.

Business takeaway: Coconut is big business. It has the endorsement of celebrities (Madonna even invested into Vita Coco). But it’s not only coconut water that we’re talking about here. Thanks to declining sales of soft drinks and fruit juices, there is huge market share opening up in what’s been dubbed as the “better-for-you beverages”. For example, so far in the USA, there’s been buzz around drinks such as aloe juice and maple sap. Whatever the hero ingredient, in this category “no added nasties” is a non-negotiable for consumers. Hence clean labelling, which clearly highlights the natural ingredients, is a must.

There’s no doubt that the beverage industry is undergoing some major shifts and transformations. But with change comes new opportunities for companies of all sizes to innovate and tap into new markets.

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Matt Nichol

Matt Nichol

Key Account Manager at Matthews Australasia
Matt is a laser marking expert and has in-depth knowledge of product ID technologies. He is a regular at international trade shows like Pack Expo and is constantly looking at emerging trends and technologies.
Matt Nichol

by Matt Nichol

Matt is a laser marking expert and has in-depth knowledge of product ID technologies. He is a regular at international trade shows like Pack Expo and is constantly looking at emerging trends and technologies.

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