Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Asian speciality drinks; Bottled water; Carbonates; Concentrates;
Fruit/vegetable juice; Functional drinks; RTD coffee; RTD tea
Executive summary
Concern for health driving soft drink purchasing
Americans are becoming more aware of obesity and other long-term health
problems, and are increasingly looking to change their diets for the better.
Carbonates and high sugar juices have been singled out in the media as a cause
of this obesity crisis, and health-oriented consumers are turning away from
these drinks in favour of naturally healthy soft drinks. Manufacturers of
bottled water, RTD tea, and RTD coffee continue to expand product offerings
and distribution, and enjoyed continuing double digit volume sales growth in
2007, while carbonates and juices saw volume sales declines.
Functionality becomes widespread strategy
While consumers continue to seek out bottled waters for their low-calorie
hydration and RTD teas for their naturally high antioxidant content, added
functionality has become even more attractive to those looking for energy and
preventative health benefits. Sports drinks and functional waters continue to
expand their reach through the addition of vitamins, minerals and
electrolytes, and the taurine, ginseng and caffeine boost added to most energy
drinks has made them especially attractive to younger Generation Y consumers
looking for a drink their parents would not buy. In 2007, Coca-Cola and Pepsi
also tried to bring functionality to carbonates. Continuing an initiative
started with Cadbury' s 7-Up Plus, Diet Coke Plus and Pepsi Max were launched
in 2007, the first with added vitamins and minerals, and the second with added
caffeine and ginseng. Each tries to reach groups of consumers already disposed
to looking for added benefits in the drinks they purchase.
Coke buys Glaceau
After languishing with struggling carbonates sales and very few successful new
product launches for years, The Coca-Cola Co made its strongest indication yet
that it is serious about building sales in non-carbonates when it spent a
substantial US$4.1 billion to purchase Vitaminwater manufacturer Glaceau in
May 2007. This came on the heels of several moves by the major manufacturers
towards non-carbonates categories, including The Coca-Cola Co' s 2006 purchase
of Fuze Beverage, and PepsiCo Inc' s purchases of IZZE, Airforce Nutrisoda and
Naked Juice, also in 2006. In addition, Cadbury Schweppes has announced plans
to spin off its US beverages division in 2008, with speculation that juice and
RTD tea manufacturer Snapple might be available to interested bidders. All of
these moves signal a recognition on the part of manufacturers that future soft
drinks growth will be derived from categories other than carbonates.
Brands made for children
Just as manufacturers have targeted adults looking for healthier drinks,
traditionally high sugar, low nutritional value children' s drinks are now
being replaced by healthier options. Juice drinks with USDA organic
certification, bottled water in fun shapes, like the spherical Aquapod or
juice box style of Aqua2Go, child-oriented blended vegetable juices, and
smaller 8oz (237ml) carbonates sizes that can be gripped by children' s hands
are all examples of strategies beginning to be employed by manufacturers to
cater specifically to children. As schools around the country switch from full
calorie carbonates, under a 2006 agreement brokered by former president Bill
Clinton, manufacturers continue to create smaller sizes and healthier brands
to take advantage of this opportunity.
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