Natural Products Insider

MAY-JUN 2018

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naturalproductsinsider . com 37 Function is one of the main value drivers in U.S. soft drinks. Consumers desire beverages that give them an energy boost, provide recovery after a workout or improve general well-being. Functional waters and ultra-premium functional juices are boosting value growth in their respective categories relative to volume. Energy drinks—the established leader in functional appeal—are maturing in the United States, due in part to growing consumer concern about sugar content and ingredients; however, the category overall remains a strong growth area relative to other sparkling beverages, thanks to its functional, caffeinated appeal. Fortifi ed/functional beverages grew by 3 percent in the United States in 2017, according to Euromonitor International, with no signs of slowing, as consumers consistently demand healthier food and beverages. As evidenced at Natural Products Expo West 2018, industry continues to test the limits of functional benefi ts and corresponding claims that can be achieved in beverage innovation. These range from products like Hello Water, containing dietary fi ber for digestive health, to qīī ("chee") herbal teas designed to promote oral health through the inclusion of xylitol. Two of the most promising veins of functional beverage innovation emerge from plant-based hydration and cleaner, natural energy beverages. Hydrating From Plants The main application of fruit juice and vegetable blends in the soft drinks industry is typically as a source of refreshment and nutrition. However, plant waters and light fruit and vegetable blends are now increasingly positioned for hydration, replenishment and fi tness recovery. The innovations include Organicgirl's Clear Greens Water, a plant water featuring cold-pressed romaine lettuce in addition to fruit juices and natural fl avors. Coconut water, easily the fastest-growing category in global juice, has become as much a base ingredient that spans beverage categories as a juice product itself. Coca-Cola launched ZICOCoco-Lixir at this year's Expo West show, a light blend of coconut water and cold-pressed juice that capitalizes on two major beverage formulation trends: plant/root water and cold-pressed production. Electrolyte-rich coconut water appears in the formulation of many natural, functional products hoping to displace mainstream isotonic drinks as the main functional hydration beverage. Berri Pro is a product marketed as a "fi tness beverage," certifi ed both organic and non-genetically modifi ed organism (GMO). The product contains a variety of on-trend "super ingredients," including Manuka honey, maca, ginseng and maqui superberries. Marketed and packaged essentially as a plant-based sports drink, the product contains electrolytes from coconuts, ginseng, maca and sea salt. Similarly, the brand Detoxwater, also certifi ed organic, uses an aloe-water base enhanced with electrolytes and features six fruit combinations including kiwi/cucumber, apple/raspberry and lychee/white grape. As the sports drinks category struggles to achieve growth in the United States, the emergence of natural, plant-based hydration solutions may provide inspiration for the next wave of mainstream, isotonic innovation. Clean Energy Despite scrutiny of the U.S. energy drinks category, it remains a high-value growth area in U.S. soft drinks, with value sales up 2 percent in 2017, according to Euromonitor International. Long-term, the question becomes how the energy drinks category extends its functional appeal to a broader demographic. Cold brew coffee could be one solution. A recent spate of acquisitions and new launches have propelled the segment from the world of natural/specialty stores into mainstream, North American grocery. This year, Blue Bottle introduced "road-trip ready" smaller package sizes in 8 oz cans and 10.66 oz cartons. The next evolution of cold brew may be making brands more unambiguous about functional purpose and benefi t, taking advantage of the beverage's high caffeine content. Cold brew may eventually seize the mantle of the "natural" energy drink. Kombucha is another category in the process of making the leap into mainstream appeal, and a category that could also encroach on the energy-boosting functional occasion. At Expo West, Holy Kombucha introduced a line extension of "Yerbucha" with 51 mg of caffeine per bottle derived from yerba mate, intended as a morning or mid-morning mild energy beverage that combines energy with the digestive benefi ts from symbiotic culture of bacteria and yeast (SCOBY). Tea is a versatile product category that can balance refreshment and function. Sound Tea, an organic tea producer, balances clean, sparkling refreshment by producing noncaffeinated, sparkling chamomile and white tea at one end of the portfolio and then a more intense, sparkling yerba mate beverage with 70 mg of caffeine in a 12 oz serving at the other end—all containing no sugars or sweeteners, but a mild citrus/hibiscus fl avor. Natural ingredients, like coffee and tea, are one approach to a bigger problem in the mainstream energy drinks category: producing functional products and brands that are positioned for all consumers, expanding beyond the traditional consumer segment of young men. UPTIME Energy, one of the fastest-growing energy companies in the United States, represents this new approach, marketing stylish, resealable cans and adding a packaged energy concentrate blend for a new format of energy consumption. Overall, functional appeal is a clear driver in the U.S. soft drinks industry, spurring innovative products across categories to provide consumers with beverages that incorporate added health benefi ts. Howard Telford is head of soft drinks, Euromonitor Inte rnational (euromonitor.com). Food & Beverage: Functional Beverage Innovation Plant-Based Hydration and Clean Energy by Howard Telford

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