Consumers' Hot And Soft Drink Preferences: New Trends & Future Perspectives

Published by: Datamonitor

Published: Jan. 2, 2008 - 75 Pages

Table of Contents

Overview

Catalyst

Summary

Table of Contents

Table of figures

Table of tables

tHE FUTURE DECODED

INTRODUCTION

This report covers bottled water, carbonates, functional drinks, juices, tea, coffee and other hot drinks

TREND: New beverage occasions are emerging as consumers look to satisfy conflicting need states

Per capita frequency of soft drink occasions is higher in the US than Europe

German consumers' drinks choices are driven by the health trend

Increasing temperatures are set to drive soft drink occasion frequencies, especially in the summer months

The growing number of non-alcoholic drinkers in some countries is driving growth in soft drink alternatives

Moderated consumption of alcohol is even being seen among students

Aging populations are shaping the soft drinks industry

Carbonated drink occasions are evolving to different day parts

Children are drinking less carbonated drinks

Hot drink consumption in Western markets is heavily dependent on culture and climate

Coffee is becoming an indulgent drink

Hot drink consumption increases in colder climates

Key take-outs and implications: consumers are choosing beverages that best fit their needs and are willing to forego previous beverage format preferences

TREND: Healthier drinks are gaining 'share of consumer's throat'

Consumers are increasingly opting for 'better-for-you' and 'good-for-you' beverages

There are marked differences between European and US soft drink share of throat

Consumers' propensity to drink tea is growing in the US, while European consumers are drinking more coffee

Consumers' growing propensity to drink tea in the US is being driven by its positive health associations

Key take-outs and implications: health is heavily influencing consumers' hot and soft drink preferences, something which must be recognized in future NPD activity

TREND: The importance of instantaneous and constant hydration to consumers is growing

Consumers are increasingly appreciating the importance of staying hydrated

Women consider hydration to be more important than men

Older consumers find drinking water more important than younger consumers

Children are increasingly appreciating the importance of drinking enough water

Key take-outs and implications: in addition to health, indulgence and convenience needs, physical hydration needs have intensified in recent years

INSIGHT: Bottled water occasions are increasing, taking an increasing 'share of throat'

Bottled water now accounts for half of all soft drink consumption in Europe

There is a correlation between the type of ice or water that consumers prefer to consume at home, and the size of the bottled water market in those countries

There is concern over the nutritional content of flavored water, which may inhibit future growth

Concerns over the environment may encourage greater tap water consumption in the future

Key take-outs and implications: bottled water growth has been extremely strong, although there are barriers facing the category in the future

INSIGHT: The carbonates market is showing little growth as consumers switch to healthier beverages

Consumers in Europe have under half the number of carbonated drink occasions as the US

Growth in the carbonates market is being driven by diet variants

Key take-outs and implications: consumers are switching from carbonated beverages, as it is a category that is generally 'off-trend'

INSIGHT: Juices growth is being driven by the health and indulgence trends

The number of juice occasions is increasing as consumers look to increase their consumption of fresh items and 'good-for-you' nutrients

Consumers believe that juices are a convenient way of providing part of their five-a-day requirement

Consumers feel confused by juice labeling

Key take-outs and implications: as health becomes more important to consumers, the juices market is well placed to benefit

INSIGHT: Functional drink occasions are growing as consumers take a preventative and convenience driven approach to consumption

Europeans account for just a third of the total functional drink occasions accounted for by US consumers

Men are core functional drink consumers but female consumption is increasing

Aging populations are also changing the profile of the functional beverage consumer

Key take-outs and implications: consumers are slowly embracing the healthy science behind functional beverages

INSIGHT: Coffee is overwhelmingly the hot drink preference among Europeans and Americans

The number of coffee occasions is increasing

Tea is gaining share of throat at the expense of coffee in the US

Tea is capitalizing on the health trend

Other hot drinks represent a small but growing part of overall hot drink occasions

Key take-outs and implications: coffee continues to attract consumers requiring a pick-me-up and indulgence

ACTION POINTS

INTRODUCTION

ACTION: Recognize and react to consumers shifting 'share of throat' dynamics

Target alternative beverage occasions by making beverages more versatile

Target the student demographic with greater intensity to capitalize on their desire for sophisticated alternatives to alcoholic beverages

Develop multiple packaging sizes to capture new occasions

ACTION: Inflate the premium credentials of beverage products and services

Promote freshness as a core product attribute

Develop natural or organic products that facilitate premium pricing

Consider glass packaged beverages to capitalize on the demand for superior sensory satisfaction

ACTION: Develop and promote healthier coffee at specific occasions

Challenge the perception that coffee is unhealthy

Explore the possibilities of promoting coffee's antioxidant benefits to help fight back against teas

Consider developing milder strength coffee to target health conscious consumers

Appeal to consumers seeking functional drinks by developing energized coffee, especially by infusing existing variants with natural ingredients

ACTION: Emphasize the benefits that bottled water offers over tap water

Emphasize the origin of bottled waters to differentiate from tap water

Offer a value proposition to attract lower income consumers

Add additional nutrients to bottled water to compete with functional beverages

Lower sugar levels in flavored waters to combat cynicism

Develop recyclable packaging to counter wastage concerns

ACTION: Focus juice marketing efforts on both healthy and indulgent occasions

Promote five a day in promotional literature

Target parents and children with good-for-you juice brands

Consider altering juice formulations

Target different day-parts

Juice marketers should ensure that the origin of their products is clearly marketed

ACTION: Encourage everyday tea consumption

Promote tea as a self indulgent treat

ACTION: Challenge perceptions that carbonated drinks are unhealthy

Consider added functionality in carbonated drinks to counter the functional drink threat

Replace artificial flavors and additives with natural ingredients

Target different day-parts

Carbonated drinks are increasingly being consumed at breakfast time in the US

Consider positioning carbonated drinks as an 'indulgent treat'

ACTION: Target specific consumer groups with functional beverage occasions

Target specific health concerns with functional beverages

Communicate the ease that your products offer in maintaining a healthy diet

Ensure that attempts at gender specific functional drink positioning are targeted appropriately

Appendix

Definitions

Methodology

Further reading and references

Ask the analyst

Datamonitor consulting

Disclaimer

List of Tables

Table 1: Overall and per capita consumption of soft drinks (liters, million), Europe & US, by country, 2001-2011

Table 2: Overall and per capita soft drink occasions, Europe & US, by country, 2001-2011 (millions)

Table 3: European and US consumers abstaining from alcohol by country (percentage and overall, millions), by country, 2006

Table 4: Overall expenditure on soft drinks split by age group, Europe & US (% expenditure) 2003-2005

Table 5: US away from home vs at home sales of coffee products (US$m) 2001-2011

Table 6: Overall and per capita consumption of hot drinks (liters, millions), Europe & US, by country, 2001-2011

Table 7: Overall and per capita hot drink occasions, Europe & US, by country, 2001-2011 (millions)

Table 8: Extent to which consumers consider soft drinks healthy, (% respondents), US & Europe, 2007

Table 9: Hot drinks share of throat(%), by beverage format, Europe & US, 2001-2011

Table 10: Proportion of European consumers who drank more water over the past year, (ranking and % of respondents), 2006

Table 11: Proportion of European consumers who drank more water over the past year, (ranking and % of respondents split by gender), 2006

Table 12: Overall and per capita bottled water occasions (millions), Europe & US, by country, 2001-2011

Table 13: Consumer preferences for water type, Europe & US, 2006 (%)

Table 14: Overall and per capita carbonate occasions (millions), Europe & US, by country, 2001-2011

Table 15: Overall and per capita juices occasions (millions), Europe & US, by country, 2001-2011

Table 16: Expenditure on functional drinks, by age group, Europe & US (% overall expenditure) 2003-2005

Table 17: Overall and per capita coffee occasions (millions), Europe & US, by country, 2001-2011

Table 18: Overall and per capita tea occasions (millions), Europe & US, by country, 2001-2011

Table 19: Overall and per capita other hot drink occasions, Europe & US, 2001-2011 (liters, million)

Table 20: Definition of terms

List of Figures

Figure 1: Packaged coffee sales in the US increase as temperatures decline

Figure 2: Soft drinks share of throat (%), by beverage format, Europe & US, 2001-2011

Figure 3: Consumers across Europe and the US increasingly consider drinking water an important factor in maintaining a healthy diet

Figure 4: Diet Cola will account for over 45% of total cola sales in the US by 2011

Figure 5: Coca Cola Zero has achieved global success by tapping into the values and beliefs of global males and giving them their own Coke

Figure 6: Consumers in the US are forecast to have 114 functional drinks per person per year by 2011

Figure 7: Soft and hot drinks share of throat by age, Europe & US, 2005 (% expenditure) - this shows how functional drink expenditure is dominated by younger consumers

Figure 8: The on-trade offers beverage marketers opportunity to target new soft drink occasions

Figure 9: Consider setting up juice bars to capture soft drink occasions away from alcohol

Figure 10: Ensure that you have packaging sizes to cater for different types of occasion needs

Figure 11: Innocent Drinks has achieved considerable success by marketing healthy products in an engaging and fun manner

Figure 12: Develop natural or organic products to generate premium pricing

Figure 13: Focus marketing on antioxidant levels in your coffee to gain consumer share of throat

Figure 14: Tea manufacturers have long emphasized the healthy properties of their products

Figure 15: Folgers Simply Smooth Coffee provides consumers with a milder strength coffee to cater for those consumers who find coffee too acidy

Figure 16: Appeal to consumers seeking functional drinks by developing energy coffee

Figure 17: Emphasize the origin of bottled waters to differentiate from tap

Figure 18: Develop enhanced waters to capture share of throat from functional drinks

Figure 19: Lower sugar levels in flavored waters to combat cynicism

Figure 20: Target fruit and vegetable juices to parents and children

Figure 21: Industry players need to alter juice formulations with 'good-for-you' and 'better-for-you' content

Figure 22: Encouraging 'everyday consumption' in a broad range of occasion scenarios is an effective way of boosting the versatility of beverage formats and maximizing market potential

Figure 23: Manufacturers must avoid category myopia and recognize that a broader range of product formats are now offering similar benefits

Figure 24: Consider added functionality in carbonated drinks to counter the functional drink threat

Figure 25: Targeting the breakfast occasion could provide a welcome boost to carbonate consumption

Figure 26: Consider positioning carbonates as an indulgent treat to capitalize on the desire for 'me-time'

Figure 27: Target specific consumer groups with functional beverage occasions

Figure 28: Embracing functional beverages allows industry players to target specific health concerns

Abstract

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