Adult soft drinks and fruit drinks are undergoing major changes both through the advent of the sugar tax and the influx of artisan producers presenting opportunities for vegetable as well as fruit suppliers
The sugar tax is one of the most talked about subjects when it comes to soft drinks of any kind. Designed to combat obesity, there will be two bands – one for total sugar content above 5g per 100ml such as Sprite, while the second focuses on drinks with a sugar content of over 8g per 100ml, such as Coca-Cola and Pepsi. Pure fruit juices will be exempt, as will the smallest producers.
Energy drinks have long been one of the worst offenders for sugar content. However, Mintel’s latest report on Sport and Energy Drinks UK 2016 indicates that consumers now seem to be thinking twice about buying high sugar content drinks. The research found that one in three Brits who drink sports and energy drinks would reduce their intake following price increases, while one in five said they would stop drinking sugary variations altogether. Some 48% of those questioned said they would seek alternatives such as fruit juice or smoothies.
And of note for fruit and vegetables growers and suppliers is that considerable interest was expressed in product innovation using healthier ingredients; 28% of participants in the study indicated they would be interested in cold pressed juice, for example. Some 25% expressed interest in products made with mineral water, and 22% in products containing pieces of fruit. Many participants also wanted to know the origin of the fruit ingredients and were prepared to pay more for energy drinks made with superfood ingredients.
Non-alcoholic blur
Amy Price, senior food and drink analyst at Mintel believes innovation in the non-alcoholic drinks market is blurring the lines between different categories. “‘Cold-pressed’ has become an increasingly popular label in the juice sector, with these ‘raw’ fruit juices and smoothies positioned by some operators as more nutritious than standard products due to not having been heat-processed,” she says. “This health halo could be mined by sports and energy drinks brands to capitalise on the trend through products that look to cold-pressing techniques.”
It is a situation that matches the increasing trend towards natural drinks products focusing on health and minimal production. Such drinks are appearing both within the soft drinks and the alcoholic sectors as attention turns to the revival of traditional styles as well as cold pressed methods.
Pilton Cider is one of several West Country artisan producers to have rediscovered the age-old method of keeving which prevents the full fermentation of apple sugars keeping the product sweet- tasting but requiring no added sugar or water. It is a system that utilises low-nutrient apples. “There has been a great upsurge in keeved cider, so we’ve doubled production for 2016, with our cidery now home to nine 6,000l keeving tanks,” says Pilton’s Martin Berkeley.
Cold-pressed setting the pace
Typical of the cold-pressed juice companies is MELLO, with its range of melon juices. These are cold-pressed high-pressure processing (HPP) so as to capture the taste, colour and health benefits of the fruit.
James White has also turned to pressed ginger juice rather than ginger flavourings for its Organic Ginger Zinger Shot, likewise chia-seed based drink Wow uses only cold-pressed fruit and vegetables. Wow is the first company in Europe to be granted FSA approval to produce chia-based drinks. These are now available in four variations: watermelon & pomegranate; orange, mango & carrot; apple, spinach & kiwi; blueberry, pear & lemon. Founded by two entrepreneurs, Oliver Dickinson & Rory Paterson, the business is adopting a bold approach to product innovation.
Stevia is a natural sweetener being used by some companies. Gavin Cox, md of Cracker Drinks says: “Three years ago, we decided we would cease adding sugar to any of our juice drinks in line with consumer demand and since then it has been our mission to create brilliantly blended drinks that still pack a flavour punch with natural sweeteners.” Its latest range is designed to fulfil consumer demand for a lower calorie, vitamin-enriched juice drink. Cracker’s Skinny range has less than 60 calories per 200ml and other ranges include fruit combinations such as Apple, Mint & Lime.
Mocktails and nights out
Mango Girls has taken slightly different approach creating pure tropical juices and purees blended with English apple juice with no added sugar or concentrate. These juices are designed not only to be drunk on their own, but used as mixers in cocktails and mocktails.
NIX&KIX are also targeting adults seeking innovative soft drinks while out and about in the evenings. Entrepreneurs Kerstin Robinson and Julia Kessler wanted to show that people could go out, enjoy a soft drink and have a good time. Instead of sugar, they use Cayenne chilli to give the drinks such as Cool Cucumber & Fresh Mint or Peach & Vanilla a special kick. As with Mango Girls, these drinks can be used on their own or as mixers.
Mocktails are a growth area within the evening out category as they provide an interesting option for non-drinkers. These drinks replace the alcohol content of cocktails with other combinations of vegetable, fruit and even tea-based drinks.
Another new type of soft drink is Ugly Drinks, cans of sparkling water infused with essences and oils of different fruits and without any sugar or sweeteners. Set up by two entrepreneurs who formerly worked for Vita Coco Coconut water, the duo wanted to create something healthy and fun yet without the sugar of traditional fizzy drinks. From the beginning Ugly Drinks has aimed at being a disruptive brand; standing out from the traditional drinks industry. “The name – Ugly Drinks – is a bit of a statement on the drinks industry,” says the company’s Hugh Thomas. “A lot of drinks over promise on the name and under deliver in the liquid, so we decided not to promise anything. It’s just sparkling water on the inside but not on the out. Hence the Ugly brand name.”
Smoothing the way
The smoothie craze shows no sign of abating and the drinks continue to grow in popularity and can be found in most catering outlets either as bottles or freshly made to order. Long-time market leader, The Coca Cola Company brand Innocent, now sells more than 2million 100% pure fruit and vegetable smoothies each week while newer players are exciting the market with much more complex mixes such as Itsu’s Raw Veg Cleanse smoothie which involves spinach, coriander, apple juice, ginger, avocado, cucumber all blended with ice.
Retro style
Adding to the variety of soft drinks is the revival in retro-style drinks. Northumbria-based Fentimans has been making natural botanical drinks for more than 100 years and many of its distinctive products have been in the company’s portfolio throughout that long history. Boasting natural ingredients and refreshing tastes, they sell for a premium in outlets such as National Trust cafés and farm shops and more recently have found wider appeal in restaurants, bars, supermarkets and other retail stores worldwide.
Fentimans uses botanical brewing; a very specific technique involving infusion, blending and fermentation of natural ingredients. It is an approach that has remained unchanged since the company’s formation. The ranges are equally distinctive such as Rose Lemonade, Wild English Elderflower, Dandelion & Burdock, Cherry Cola and Victorian Lemonade.
Growth prospects
Euromonitor’s Soft Drinks New Product Development: Innovation in a New Growth Environment study stresses that consumers are seeking out healthier drinks such as flavoured waters and vegetable juices to reduce calorie and sugar intake. The rise of vegetarian, vegan and flexitarian (semi-vegetarian) diets has resulted in an increase of green juices made with kale and spinach, the research finds andt points out that by incorporating more vegetables, juice makers can increase consumer perception of the health benefits of a drink.
Local flavours and ingredients are important to consumers seeking nostalgia, social responsibility and transparency in soft drinks, while younger customers in their twenties are keen on complex flavours such as bitter, sour and spicy. As with Mintel’s Sports & Energy drink report, Euromonitor points to the extent to which blurring of categories with drinks that cross different sectors and styles has become the norm, especially water-like drinks such as flavoured water and coconut-derived water.
The rise of Vita Coco and Cocofina reflect this trend. The scale of the potential interest in coconut-derived water was shown by the way Cocofina received offers from all five dragons when founder Jacob Thundil appeared on Dragons Den in 2016.
The combination of health benefits, the sugar tax, socialising and don’t-drink-and-drive messages mean that the amount of adult soft drinks sold annually will increase especially around traditional celebration periods such as Christmas.
For producers, the message is clear; consumers are keen on fruit and vegetable based drinks, while looking for innovation and style so the potential for growth, especially for artisanal products, is considerable.
