Symrise Meeting Highlights What is Needed in Beverage Innovation

Famous representatives from the industry as well as consumer and trend research gave their interpretations of the term “innovation” and discussed how companies can successfully position themselves with regard to megatrends.

27/10/08 Who are the consumers of tomorrow? What will they want? How will the circumstances in their personal lives affect their beverage preferences, and how should the industry of tomorrow respond? These were some of the questions addressed at the 3rd Beverage Innovation Day held by fragrances and flavorings manufacturer Symrise on September 18, 2008 in Hamburg, Germany. Famous representatives from the industry as well as consumer and trend research gave their interpretations of the term “innovation” and discussed how companies can successfully position themselves with regard to megatrends such as organic products or health & wellness.

Frank von Keutz, Vice President, BU Beverages Europe, Africa, Middle East at Symrise stated that innovations are indispensible for every company. Even the most successful and stable brand can only keep growing if it is constantly modernized, and a company's innovative power has nothing to do with its size. If innovation is to be successful, senior management has to be involved, and companies also have to accept the risk of potential missteps. Classic market-research methods are no longer able to capture consumer needs adequately; instead, today's consumers can best be served by using new research instruments such as “freak groups,” blog scouting or online surveys. Changes among consumers and the market mean that there are still numerous opportunities to find interesting niches.

Sven Gábor Jánszky, head of the forward2business Think Tank offered a perspective of what the future may bring in his presentation entitled “Life and living in 2020: a day in Germany in the year 2020 and its impact on the food industry.” Based on the visions and strategies of some 200 heads of innovation at major leading German corporations, he forecast the three most important trends in the year 2020.

First of all, technology and our everyday lives will merge more and more, and as a result, many different objects — everything from bathroom mirrors and tabletops to bracelets – will have an IP address which will allow them to communicate with electronic devices.

Secondly, identity management will take place by means of personal electronic assistants; for example, a remote control can learn which stations its user likes or a refrigerator can send shopping lists to a mobile phone. The third trend he mentioned was something known as neuro-enhancement, which means optimizing a healthy body using products that were originally designed for the pharmaceutical industry — for example, working with medicine for dementia patients to improve a healthy person's mental performance. In the food industry, this development can be seen in a gradual switch from a health-oriented trend towards a “brain-oriented” trend.

Following that, Volker Laengenfelder of the Volker Laengenfelder Unternehmens- und Umweltkommunikation consulting agency talked about the booming market of organic beverages. In “Organic beverages: profiting from growth markets with carefully targeted PR and innovative communication tools” he outlined the major criteria that organic products have to meet to be a market success. Using the example of a leading brand of organic beer, he outlined how the key buzzwords of flavor, health, fairness and credibility can be effectively used for communication. He placed special emphasis on new forms of communication such as the Web 2.0 or viral marketing; these do not focus on target groups in the classical sense, but rather on lifestyles (like LOHAS) and give consumers a way to assess products and services and offer each other recommendations.

Jens Lönneker, head of the Rheingold Institute for Qualitative Market and Media Research, confirmed that classic target groups as we once knew them no longer exist. His presentation, “Beverages innovations today deal with emotional states rather than target groups” covered a kind of mood-oriented marketing tool called Verfassungsmarketing, which deals with the individual moods of consumers in difference contexts and situations. Verfassungsmarketing is based on the insight that people today no longer demonstrate predictable group-behavior patterns. He named two examples of beverage categories which are tied to certain moods, situations or times of day and are what shape them. Stimulating beverages have carbonation, caffeine or alcohol and are mostly consumed by people on the go or in groups. Their purpose is to make us relax or get away from everyday life a bit. By contrast, nurturing beverages are based on milk or juice and have no carbonation; they are designed to be good for us and are more likely to be consumed alone and in peace, e.g. at the breakfast table.

An established, successful brand can become an even greater success thanks to innovations, as Simone Gravante demonstrated, Senior Brand Manager for Baileys and Innovations for Switzerland, Austria and Germany at Diageo Suisse SA.  As part of her talk on “Line extensions as a profitable tool at Baileys,” she told the success story of the Baileys brand, which was founded in 1974. Its launch created a whole new category of spirits, and in the meantime it is the seventh largest brand of spirits worldwide. With the “Baileys Flavours” it introduced in 2006, the company released two new varieties for the first time: Mint Chocolate and Crème Caramel, and Germany is currently serving as the test market for the new “Baileys Coffee.” In particular, Simone Gravante showed the effective combination of innovations, packaging design and communication tools.

In the final presentation, Oliver Leisse, head of EARSandEYES GmbH, Institute for Market and Trend research, looked at “Paths to new consumers.” He talked about a new type of “child-like consumer” who has lost confidence in brand products, makes decisions based on a gut feeling, and wants to be enthused more than anything. He categorized the wishes of these new consumers into the four fields of “starting fresh,” “building strength,” “assigning value” and “finding balance”. “Starting fresh” was described as the people's desire to re-discover their individuality, be mobile and have fun after difficult years of uncertainty. The thing that makes this possible is products with an exceptional and surprising content and look: one example would be to enhance fitness drinks with oxygen to give them a special “push” “Building strength” is related to the consumers' wish to feel secure, especially when it comes to keeping themselves healthy and in shape. The products which generate the strongest response here have a pharmaceutical benefit, such as beauty from within, stimulating the mind or anti-aging. Functional drinks are particularly important on the beverage market. “Assigning value” expresses a search for meaning in a world where old systems and values such as politics, family or religion no longer hold as they did before. Consequently, consumers create a new meaning in terms of simplicity, design, nature or spiritual kinds of physical activity like yoga. On the beverage market, this longing is met by things such as a very pure style of packaging, “balanced waters” or products which tell an “honest story.” Last but not least, “finding balance” describes a new kind of luxury in which the emphasis is not on material things, but on something special, the experience or enjoyment. People's homes become more and more important, and there is a return to childhood which can be seen in the haptic qualities of beverage products or in premium beverages which “reward” consumers.