It is undeniable that 2020 has been an unusual year, affecting nearly all aspects of life as we know it — from the way we work to how we interact with others and, especially, how we buy and consume food and beverages, reports Vicky Berry, Business Development Manager, Synergy Flavours.
With shopping habits evolving as a result of the pandemic, it is to be expected that consumers aren’t just changing the way they shop, they’re also taking a closer look at the kinds of products that they’re shopping for.
One area in which we have seen conflicting and changing attitudes is the alcoholic beverage category. At the beginning of the UK’s toughest lockdown in April, one in three consumers claimed to be drinking less.1
Changing attitudes towards alcohol, combined with growing demand for clean label and “better for me” options, are driving innovation in the beverage category towards products with a more functional focus, offering health and wellness benefits and reduced sugar and calorie options.
It is not just consumers driving innovation in this space either. In recent years, we have seen a renewed focus on dietary health around the world, with governing bodies and health organisations paying particular attention to sugar intake and cardiovascular health.
In March 2020, the International Diabetes Foundation (IDF) revealed that of the 463 million diagnosed cases of diabetes around the world, 88 million of these are in the South East Asia region — with this number expected to rise to 153 million in 2045.2
A few months later, in July 2020, the UK Government unveiled its “Better Health” campaign to encourage UK adults to eat better, drink less alcohol and become more active to reduce their COVID-19 risk and improve their overall health.3
With consumer attitudes, health-focused research and government initiatives renewing the focus on the food and beverage industry, manufacturers are looking to develop innovative products to suit a more health-focused audience.
So, what innovation can we expect to see in the beverage market? Synergy Flavours reveals the beverage trends leading the field for 2021.
Nothing “soft” about soft drinks
A 2019 study by Distill Ventures found that 61% of consumers were looking for better choices in low and no alcohol beverages.4 As demand for variety in the alcohol-free category is growing, consumers are looking to enjoy beverages that offer a refreshing complexity instead of the squashes and sodas.
This trend, driven by millennials and generation Z, is seeing options such as mocktails, ready-to-drink (RTD) tea and botanical drinks becoming more readily available and popular.
With hundreds of thousands of job losses globally as a result of the pandemic, many consumers have been tightening the purse strings, so these products (which are typically cheaper than alcoholic options) are set to perform well.
One beverage trend that has seen growth in recent years is hard seltzers, which are proving popular with their lower ABV (alcohol by volume) compared with a glass of wine or spirits.
Their cleaner, low calorie positioning offers a great alternative to alcoholic options for those balancing their alcohol intake and watching their calorie and sugar consumption.
This product first took the USA by storm in 2019, giving consumers a refreshing and health-focused alternative to alcoholic beverages. Total hard seltzer sales for the 52-week period until 13 June 2020 were $2.7 billion in the USA and, in 2020 as the products hit European shelves, hard seltzers went global.5
The category continues to evolve and innovate with new flavours, pushing the boundaries and moving beyond the traditional hard seltzers to wine-based and spirit-based seltzers.
Hold the sugar: recent backlash and tighter restrictions
The ongoing war on sugar has been affecting the food and beverage industry for some time. On 6 April 2018, the UK Government introduced the Soft Drinks Industry Levy, which aimed to tackle the growing issue of obesity within the UK population by adding further tax onto beverages with a high sugar content.
The introduction of the so-called “sugar tax” saw more than 50% of manufacturers reducing the sugar content in their beverage products since the announcement in March 2016.6
Meanwhile, in Thailand, research undertaken in 2019 showed that the nation consumed more than four times the World Health Organization’s recommended sugar intake, despite various campaigns and initiatives to address the issue. This equates to 28 teaspoons of sugar per day as opposed to the recommended six teaspoons.7
There are two ways that manufacturers are tackling the issue: by offering less-sweet flavour profiles across beverages and reformulating their beverage products to deliver a sweet taste without the unnecessary sugar.
To offer a sweeter taste, manufacturers may be looking at using more complex flavour pairings with less common fruits, such as mandarin.
With an inherent sweetness that offers fewer sour notes than traditional citrus fruits, such as lemon and oranges, mandarin is one flavour that has seen increasing use in beverage launches.
Recent innovations include pairing it with orange, lemon, ginger and carrot in Innocent’s “Citrus Shield” beverage or with pineapple in Polish brand Tiger’s energy drinks.
Tea-based beverages and botanical formulations have blossomed in this space, with their natural health halo placing them at the forefront of innovation for the more health-conscious consumer.
RTD tea brands have been attempting to negate a once negative image of high sugar levels with more natural cues, positive health claims and a reduced sugar content. For example, 2019 saw off-trade sales of RTD tea reach £7.86 million in the UK, which is an increase of 25%.
As health and wellness moves even more to the forefront of consumers’ minds, we can expect to see these numbers continue to rise in 2021 and beyond.
Health first: the importance of building immunity
In the midst of a pandemic, it is only natural to expect consumers to look for ways to boost their immunity and improve their overall health.
However, it is important to note that there is limited and conflicting evidence to support the theory that specific ingredients enhance immunity, with many medical and nutrition specialists suggesting that a more balanced diet is the most effective approach.
To address this, some consumers are paying more attention to the kinds of ingredients and products they are consuming. Clean label is proving popular in this field, with consumers seeking shorter ingredients lists; herbal and botanical flavourings are performing well owing to their association with a more natural positioning.
Flavours with perceived health benefits such as ginger, mint and cinnamon have always been popular, but more recently we have been seeing an increase in product launches that contain other health-boosting herbs and spices, such as turmeric, lemongrass and floral flavours such as rose and hibiscus.
To address this demand, beverage manufacturers may consider creating less-sweet products that offer a refreshingly fragrant flavour associated with herbal and botanical ingredients, which could be achieved through innovation in RTD teas and tea-based beverages such as kombucha and smoothies.
Citrus beverages have benefited with their naturally high vitamin C levels and, as sales of citrus fruits increased at the start of the pandemic, consumers are likely to continue to focus on immunity through 2021.
Manufacturers are layering different citrus fruits and pairing the less common yuzu, mandarin, clementine and pink grapefruit with more established citrus profiles (lemon, lime, orange and grapefruit).
In addition to being drawn to flavours with perceived health benefits, consumers may also look at improving their beverage intake through the use of fortified drinks.
Recent innovation from brands such as Innocent, Purdey’s and Tetley has seen the fortification of beverages with vitamin C and other key minerals such as zinc as one way of appealing to health-conscious consumers through beverage products.
Fortified beverages are also targeting areas such as concentration, fatigue, stress and even eyesight with vitamins, minerals and natural ingredients.
The impact of seasonal flavours
This year has shown that consumers need innovation! And although we’ve seen a turn towards established/trusted brands, it’s fundamental that beverage manufacturers continue to innovate. Seasons and occasions offer a great opportunity.
The holiday season saw a number of launches centred around nostalgic festive profiles. Gingerbread featured in several gin brands, with other companies combining warm spices, cinnamon, nutmeg and clove.
Juxtaposing the health-focused beverages, we’ve also seen a wave of indulgent drinks that is likely to continue into 2021 … with consumers needing comfort and a treat.
One key example is Five Guys, who has launched a range of themed milkshakes, including trifle, Christmas pudding and the nutcracker. Indulgent profiles such as these are poised well to work for other occasions, such as white chocolate and caramel for Valentine’s Day.
Summer will see the continued rise in popularity of tropical fruits, with new profiles such as the sweetness of guava beginning to emerge.
This fruity flavour works well in beverages and adds an innovative twist alongside the already popular passionfruit and mango combinations.
Hallowe’en 2021 is likely to capitalise again on the growing popularity of pumpkin spice, or link in with the growing area of fantasy themed foods and beverages with ghost, vampire or dragon inspired drinks, featuring flavours of blood orange, spice, red fruits and smoke.
Looking forward: what can we expect to see dominating the beverage aisle?
Although we can expect the alcohol industry to perform well in spite of government initiatives and a renewed focus on health and wellness, the growth of the alcohol-free beverage space is certainly not something to be overlooked.
This beverage category has seen substantial growth in demand in recent years with on-trade sales in the low- and no- category having grown by 48% in 2019.8
With health and economic factors further shaping consumer habits in 2020, we can expect this number to have risen. As consumers adapt to a new way of life, manufacturers must be able to keep up with their changing shopping habits and purchasing preferences.
By presenting a wide variety of innovative products, which offer benefits to the consumer through taste, price and health-focused ingredients and formulations, manufacturers can continue to meet changing consumer demands and succeed in this ever-evolving market in 2021.
References
- www.theguardian.com/society/2020/apr/16/one-three-drinking-less-lockdown-uk-survey-alcohol.
- https://idf.org/our-network/regions-members/south-east-asia/members/94-india.html.
- www.gov.uk/government/news/major-new-campaign-encourages-millions-to-lose-weight-and-cut-covid-19-risk.
- www.distillventures.com/insights-and-trends/non-alcoholic-drinks-a-growth-story.
- www.nielsen.com/us/en/insights/article/2020/hard-seltzer-defies-categorization-and-limits-as-the-most-resilient-alcohol-segment-in-u-s.
- www.gov.uk/government/news/soft-drinks-industry-levy-comes-into-effect.
- www.bangkokpost.com/life/social-and-lifestyle/1721303/the-problem-of-thailands-sweet-tooth.
- www.cga.co.uk/2019/11/29/moderation-drives-no-and-low-alcohol-drinks-into-the-mainstream.