Is 2016 the year the soft drinks’ market grows up?

By Joanna Davies, Managing Partner, ZAK

After years of being told we drink and eat too much, it seems a significant portion of the population is starting to listen as we see the rise of a new breed of consumer. The younger generations coming through the ranks are an increasingly health conscious demographic looking to avoid the mistakes of their predecessors. A 2015 study by Newscred revealed that 76% of consumers expect food and drink brands to provide healthy content. By deliberately choosing to cut down on the levels of sugar and alcohol they consume – no doctors note necessary – it seems there is no doubt about it, being healthy is ‘in’. And as more people opt to lead this lifestyle there is one market that is ripe for the picking – soft drinks.

The launch of Tenzing earlier this week (an energy drink made up of natural ingredients and less than a fifth the amount of sugar of its competitors) marks the start of a change within the industry. The likes of Coca Cola and Red Bull are struggling to maintain the mass domination they once had and a big hole is emerging to swallow them up. 2016 will be a big year for brands looking to tap into this audience, but how do they break into this niche market and engage a consumer base that is primarily driven by health factors?

 

Making me a better ‘me’

Soft drinks have traditionally been seen as the secondary option for those unable to drink alcohol; now, they are the drink of choice. Gone are the days of sugar-laden soft drinks, these consumers want more. What health benefits can this soft drink offer, and how does it make them a better version of themselves?

This is a market looking beyond a drink to a more viable, quality alternative – this audience values their bodies, and the products they are putting in them need to enhance how they feel. A drink is no longer enough, this is an exclusive experience, and this audience wants something that no one else can give them: limited edition flavours, mood enhancement as opposed to energy enhancement, the supplements missing from their diets. Brands that focus first on the functional benefits will capture the interest of what is already a sceptical market.

 

The restless palate

As the world becomes increasingly connected, we become gripped with innovative flavours. With consumers always looking for the next taste – obsessed with the notion of hyper local- soft drinks can no longer be generic. We can see this first-hand in the rise of bitter flavours, replacing the sweet tastes of the past. Brands need to use what we call the ‘restless palate’.

Local products, recognisable ingredients and healthier options that have functional benefits are hugely popular. This indicates a distinct move away from the sugary drinks of the past towards a premium, benefit-delivering future for soft drinks. Already we’ve seen the likes of coconut water, kombucha, flavoured water and iced tea take the industry by storm. Each product represents a piece of the modern jigsaw.

 

A Credible Story

Behind any successful product there is a story, and as the old adage goes, the more compelling the better. The origin of sources, ingredients and recipes all contribute to the mystique behind the rise of healthy alternative soft-drinks. These stories align well with shifts in consumer thinking, particularly as we move away from sugar-laden drinks towards healthy alternatives. Big corporate brands like Coca-Cola can seem faceless, while new soft drinks – with appealing packaging and a clever brand story – tap into ideas of honesty, personalisation and authenticity. Personalisation, in particular, has become an expectation among today’s younger generations. Soft drinks need to recognise that experience is everything, as consumers actively look for products that speak to their likes and interests.

Huib van Bockel’s Tenzing promotes itself as an all-natural alternative to typical energy drinks. It paints an authentic story as an amalgamation of natural ingredients: guarana berries sourced directly from the Amazon basin, Himalayan rock minerals that have been a staple of Tibetan mountain guides for generations, green tea leaves sourced from the Rift Valley in Kenya. It’s hard not to feel interested in a drink that contains ingredients from three different continents, especially as the story is rooted in the ingredients’ health benefits, natural properties and historical significance.

Nielsen’s 2015 Global Health and Wellness Report supports these environmental and socioeconomic concerns. 35% of consumers say sustainably sourced and organic ingredients motivate their purchasing decisions, a sharp increase from past decades.

 

Time to grow up

2016 is the year to make a move and for those brands that find a unique way to tap into the market, there will be significant room for growth. How a brand tells its story is crucial. When a brand’s story, package and product align, displaying values such as honesty, transparency and authenticity, there is real potential for success in a soft drinks market that is officially open for business.

To view the full article in Foodbev Media click here.