Market Insights

Market Insights  Beverage SPRING 2009 Let’s Drink to Health! Everyone knows that obesity is a problem in America—in fact, more than one-third of U.S. adults (more than 72 million people) were obese in 2005/2006, according to the CDC. Soda has been repeatedly criticized for its unhealthy nutritional profile, and is believed to make a significant contribution to the obesity epidemic. A Simmons NCS survey conducted in March 2008 revealed that 64% of consumers are trying to eat healthier foods. Consumers seem to be choosing healthier beverages as well: Regular soda consumption has declined, while diet soda and bottled water consumption have been steadily increasing over the past five years. Bottled water, with its numerous perceived health benefits, was the #1 ready-to-drink (RTD) beverage in spring of 2008. However, in a challenging economic environment, consumers may turn to less expensive alternatives to bottled water, such as tap water or simple home filtration systems. In light of this, many observers question whether bottled water will be able to sustain its share of the ready-to-drink beverage market. Surprisingly, it is men who are driving the growth of the diet beverage business. Although women are still more likely than men to drink low-calorie beverages, according to Mintel, new users of diet soda and bottled water are primarily men, and they are the ones likely to bring growth to the category during 2008-13. In terms of healthfulness, consumers look favorably upon beverages that provide convenient nutrition and healthpromoting benefits, such as enhanced waters, RTD teas and 100% all-natural juices. As foodservice establishments become more transparent about nutritional information, we should start to see healthier options taking on a more important role. According to Mintel, the Growth of “Healthy” Terms on Beverage Menus Healthy Terms Organic/Natural Business Implication: Make sure your beverage program includes fresh, natural and pure products that keep the health­conscious consumer in mind. ! Arm yourself with information % +44% Fresh +18% Diet +21% Source: Datassential MenuTrends DIRECT about health trends and consumer concerns in today’s foodservice marketplace, and the importance of having healthy beverages among your product offerings. ! Explore extensions of existing key “buzzwords” for dining out in 2009 will be fresh, natural and pure. These 80 characteristics are important for both the 70 beverage and culinary away-from-home businesses. According to Mintel, fresh was 60 the #1 marketing claim for beverages on 50 restaurant menus in the fourth quarter of 2008. And Datassential found that 40 operators are using “healthy” buzzwords 30 to describe their beverage offerings more 20 frequently today than they have in the past. For example, compared with 10 2005, 44% more operators are menuing 0 “organic” or “natural” beverages. beverage categories that Regular Soda are relatively easy to add Diet Soda to the menu; if you already Bottled instance, offer iced tea, for Water can you add it toDrinks Sports lemonade to make the popular Energy Drinks combination known as an Iced Tea Arnold Palmer? ! Use such techniques as 2003 2005 suggestive selling, menu mentions and point­of­ purchase materials to boost patron awareness of better­ 2008 for­you beverage options. Trends In Personal Consumption of RTD Beverages 80 70 60 50 40 30 20 10 0 Regular Soda Diet Soda Bottled Water Sports Drinks Energy Drinks Iced Tea 2003 2005 % FS­6168E 2008 Source: Mintel/Experian Simmons NCS/NHCS: Spring 2003 Adult Full Year—POP, Mintel/Experian Simmons NCS: Spring 2008 Adult Full Year—POP Exclusively for foodservice professionals registered with nestleprofessional.com