The soft sell

Back from holiday, jet lagged, gippy tummy? Pick up a bottle of Mile High Original. Its blend of fruit juice and anti-oxidants will sort out jet lag, dehydration, nausea, digestive upsets and infections, so its producer, the Mile High Drinks Club, claims.Launched in selected Waitrose stores in the UK on September 22, Mile High Original has been conceived by a naturopathic nutritionist and a former long-haul cabin crew member. But you don't have to be a BMI Baby to drink Mile High Original, they say. Everyone can benefit from its combination of red grape juice, aloe vera and ginger without ever having to leave the ground or lose their luggage at Heathrow's Terminal 5.

Continued growth and increasing market fragmentation are spurring Europe's non-alcoholic beverage producers and ingredients suppliers into a flurry of new product development (NPD). According to UNESDA, the union of European beverage associations, total consumption of non-alcoholic beverages in Europe in 2006 was around 126bn litres compared with 105bn litres in 2000 - a 16% growth. In 2006, the biggest selling category was water, followed by carbonates, 'other' (ie. still, dilutables, iced tea, iced coffee, sports and energy drinks) and fruit juices and nectars.

But drinking patterns vary hugely. Denmark and Finland drink more carbonates than any other category, says UNESDA. 'Other' comes next, followed by fruit juices and nectars, then water. The French drink four times as much water as carbonates and 'other', with juices and nectars coming last.

According to the British Soft Drinks Association (BSDA), carbonates topped the UK's list in 2007 with 41.5% market share, with 'other' in second place, then water, and, lastly, fruit and nectars.

According to BSDA's 2008 UK Soft Drink Report, health and convenience are now the key influences shaping UK beverage consumption patterns with a rise in new products offering functional benefits.

Gary Roethenbaugh, market intelligence director at beverage consultancy Zenith International, says the growth of new types of beverages is leading to confusing sub-segmentation within the traditional soft drinks categories. "You've now got products like Glacéau vitamin water (Coca-Cola's first bottled water following its UK withdrawal of Dasani). Now what is that as a product? It's an enhanced water, yet they've got up to a dozen variants in the US and six or seven in the UK. Where do they fit?"

Added extras​

"Then there are juices with added vitamins and minerals. Are they functional? Arguably yes, yet multi-vitamin is effectively a flavour in many European markets. And you could argue that virtually every product is a flavoured water: tea, beer and coke are all flavoured waters. Full concentrate juice is a flavoured water if you think about it: you concentrate it then you put the water back in."

Dairy is another problem area, says Roethenbaugh. "Holland has a tradition of having a breakfast milk drink which is a blend of juice and milk - often made up at home but increasingly ready-to-drink. Juice and milk products are also popular in Portugal and Spain and in Scandinavia and Benelux. They blur the line between dairy and soft drinks."

So which areas does Roethenbaugh see growing? Weight management and skin health are looking very interesting, he says. But he warns that the credit crunch could affect their development.

"Soft drink products are discretionary purchases. So with cosmeceuticals, for example, you might go either for a cosmetic or a pharmaceutical solution to your diet, weight, or skin health problem. But you may not go for a soft-drink."

Roethenbaugh says water-based drinks are an important growth area: "With juice you've got issues in some markets. Some consumers in Europe buy into juice if it's got added fibre, vitamins, and minerals. Yet products like Tropicana Essential (fortified juices) have had a bit of a difficult ride in the UK and a couple of other markets."

But that's not to say that "juice-plus" type products are not important, says Roethenbaugh. It is just that 'water-plus' is a more straightforward proposition. "Plain water is boring. So the added ingredients in 'water-plus' are more straightforward. You can position the hydration element. You can then take it into sports. You can take it into skin, gut, brain or whatever health applications you want. Water is more useful as a base product from which to build functional ingredients." Roethenbaugh also believes that the new European Regulation on nutrition and health claims will spur NPD. "It helps get consumer buy-in because now you've got to do what it says on the tin." He forsees a shake-out. "It will become clearer which products work."

But the major challenge for ingredients or beverage producers is a technical one: stability and shelf-life. One answer, suggests Roethenbaugh, could be the product where the functional ingredient is stored in the bottle cap. With a push or a 'click-and-go' the functional payload is delivered into the beverage at the moment of consumption and shelf-life issues disappear.

Lacto Tab from Swiss dairy giant Emmi is one example. While consumers did not buy into the product's key ingredient (CoQ10) and it was subsequently withdrawn, the delivery system for its micronutrients - a tablet enclosed in a blister inside the lid of the bottle - was highly innovative.

There are now moves to market just the caps, says Roethenbaugh. In one such innovation, caps are sold containing ingredients ranging from an aphrodisiac to energy, skin health and well-being products, all stored in a concentrate form. "You buy the cap, buy a normal bottle of water. You take the top off the water, put the cap on, shake it and consume."

A smooth road to growth​

Herbert Eickmeier, senior marketing manager at German fruit juice concentrates and ingredients supplier Döhler, sees growth areas for smoothies. There is still tremendous growth in the UK, he says, and in Germany the market has more than tripled in recent years.

The other area of growth is still flavoured water, with a 12% growth in Germany in the past year. Sales of energy drinks in Western Europe have seen a 16% rise. And carbonates are still growing.

Oliver Hehn is head of product development at Plantextrakt in Germany. Plantextrakt supplies ingredients for tea and herbal extracts. He also predicts increasing market segmentation. "Segments become smaller as we all try to produce the tailor-made product for the consumer. If you look at the global brands, you see how much they have widened their portfolios. They all want to tailor their product to the specific needs of the individual - and to the time of day and to whether the sun is shining or whether it is raining! That is where we are heading.

"Cognitive function is definitely a trend.We get ever more older people; supposedly our youngsters have to do more at school than they used to. So they need to perform better from a brain point of view."

On the ingredients side, the consumer wants a product to be as natural as possible, says Hehn. No E-numbers, no artificial colours. "It doesn't need to be Rainforest Alliance all the time or Fairtrade, but the consumer wants to feel that the good stuff has not been taken out."

The problem, he says, is that a number of these newer ingredients pose technical challenges with regard to stability and turbidity. Some tea extracts react with minerals in water, leading to sedimentation. Hehn says Plantextrakt has developed technology whereby the critical ingredients inside the extracts are excluded so that no further reaction can take place.

"However, if you want ever-more natural products, then the producer has to see all ingredients can't be put into every kind of packaging and be stable in all conditions for 12 to 18 months. Its' not possible."

Frank Behnam, head of corporate development at German ingredients supplier Aquanova agrees that turbidity is a challenge. "Functional ingredients tend to be found more and more in transparent, crystal-clear water beverages. So people want clear ingredients." One problematic ingredient is omega-3. But Aquanova now has an omega-3 solution which is water soluble. But omega-3 is not Aquanova's big hope for beverages, says Behnam, because it oxidises easily. The level of oxidation needed to create off flavours is very low. "With any oxidation, you will have a bad taste. We manage to reduce the problems because we accompany omega-3 fatty acids with ascorbic acid. But it is still not the 100% solution."

Another challenge is to get fat-soluble active ingredient like vitamin E and co-enzyme Q10, or CoQ10, into clear water beverages. CoQ10 is used in dietary supplements. It is made in the body and used by cells to produce energy for cell growth. You can use traditional emulsions, says Behnam, but then you have to use very low concentrations to avoid creating turbid solutions.