Natural Beverages Focus Reaches Carbonates – Innova Market Insights

This trend has been particularly apparent in the US carbonates market, where Innova Market Insights has recorded interest not only in the use of all natural flavours, but also in a return to the use of natural sugar rather than artificial sweeteners or HFCS (high fructose corn syrup).

21/05/09 The natural trend in beverages appears to be continuing unabated, with the Innova Database www.innovadatabase.com recording that over 11% of global soft drinks launches over the April 2008 to March 2009 period were positioned on a ‘natural’ platform, equivalent to over 1,000 products. While activity is dominated by bottled water and fruit drinks, both of which have the benefit of an inherently natural image, perhaps of most interest is the rising level of interest in natural carbonates, which is moving away from more specialist products and into the realms of the brand leaders.

This trend has been particularly apparent in the US carbonates market, where Innova Market Insights has recorded interest not only in the use of all natural flavours, but also in a return to the use of natural sugar rather than artificial sweeteners or HFCS (high fructose corn syrup).

In April 2009, Coca-Cola announced that its Fanta Orange had been reformulated with 100% natural flavours in the US, following the path set by the company’s Coca-Cola and Sprite brands, both of which have already moved to 100% natural flavours. The company also plans to make Fanta Apple and Fanta Grapefruit all natural by the end of the summer.

Rival PepsiCo, meanwhile, has been active in the all-natural arena with its Pepsi Natural, Pepsi Throwback and Mountain Dew Throwback brands. Pepsi Natural is an all-natural premium cola made with sparkling water, natural sugar and cola nut extract, coloured with caramel and apple extract. It was first launched in the UK under the Pepsi Raw name in 2008, but carried the Pepsi Natural name in the US for its March 2009 launch. More recently, in April, Pepsi Throwback and Mountain Dew Throwback were launched for a limited period with a retro image inspired by the 1960s and 1970s, also sweetened with natural sugar. They also offer an option for consumers seeking to avoid HFCS, which has had some adverse publicity in recent years about the possible association between its consumption and levels of obesity.

This perceived problem with HFCS is having the effect of returning sugar to the soft drinks ingredients list with a new respectability on the basis of its naturalness and its taste benefits.  Products already on the market and benefiting from this HFCS-free image include the Jones Pure Cane Soda range and Hansen’s Natural Cane Sodas, both of which come in a variety of flavours, as well as Trader’s Joe’s Refreshers, marketed as all natural and HFCS free. All three have seen further new product activity in recent months.

Another new approach is that of Zevia Natural Stevia supplement drink, which is marketed as sugar- and caffeine-free and ‘naturally’ sweetened with stevia, offering a natural alternative to diet sodas. Coca Cola also announced the launch of its first stevia sweetened drink under the Sprite Green branding at the end of 2008, presenting it as the first mainstream sparkling, naturally sweetened, reduced- calorie beverage in the US to use the Truvia branded sweetener.

Global energy drinks market leader Red Bull also entered the natural carbonates market in 2008 with its Red Bull Simply Cola, initially launched in 7 countries, including the US. It is marketed under a ‘strong and natural’ strapline and is made with sugar, plant extracts and natural caffeine, claiming to be the only cola made with both coca leaf and kola nut.

The move back to sugar is now also apparently spreading to major brands in the US iced tea market with Snapple’s recent launch of an all natural version of its iced tea made with sugar. This was despite Snapple winning a 2008 lawsuit allowing it to use the term ‘all natural’ while sweetening its products with HFCS. The new formula is claimed to heighten the flavour derived from the tea leaves, uses sugar as the sweetener and reduces calories by up to 20%. The company claims that taste was the key factor driving the new formulation, rather then the trend to natural ingredients or the controversy over HFCS, however.

Innova Market Insights’ Head of Research Lu Ann Williams reports “It will be interesting to see how this development pans out for the carbonated soft drinks market in the US. The situation in Europe, where HFCS is not widely used, is rather different, with consumers expecting to see sugar used in their non-diet carbonated drinks, and interest in naturalness tending to focus on the use of natural flavourings, colourings and so forth. As a result, there currently appears to be less interest in the concept in the carbonates market, although there are still relatively high levels of product activity focusing on naturalness in other sectors of the market such as bottled waters and fruit drinks.”

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