BY NIKKI AUSTEN HEAD OF STRATEGY, WEBB DE VLAM
It seems a little ironic, when discussing the drinks business, to talk about market saturation – but there’s no denying that a lot of alcohol brands are jostling for space that’s very limited. After all, there’s only so much 40% proof booze that anyone can consume, and the hard liquor category is awash with instantly recognisable names, with strong brands backed up by big marketing budgets.
It’s a challenging time, nobody can deny it. But consider this: neither of these two disadvantages – limited consumption and a packed market – is true of carbonated soft drinks (CSDs). Of course, there’s Coca-Cola and Schweppes. Other big brands have soda offerings. And there are starting to be small players, with interesting offerings, who appeal to the craft end of the market. But compared to alcohol, where the craft movement has risen so high it seems poised and teetering for a fall, CSDs are as old-fashioned as a 1950s American soda fountain.
And, like those marble counters, with their wholesome feel of a fun place for young people to congregate safely, CSDs have a clear connection to the healthful lifestyle that’s such a preoccupation these days – particularly for young people. American soda fountains served sugary drinks and ice creams – but they mostly shared space with a pharmacy. That may have been simple convenience, back then – but no marketer today can afford to ignore the advantages of an implied association with good health and wellbeing, and that’s something that alcohol-free drinks have to offer – and at just the moment when drinking alcohol is less popular than it has ever been. The opportunities are huge; but the window is limited. This is anything but a static market.
The route to good health
If, as studies show, over three quarters (77%) of UK adults drink carbonated soft drinks, it is partly because we all know they are better for you than an alcoholic drink. Even mixers are perceived as the healthful dilution to the naughty-but-nice alcohol. Fever Tree, the hugely successful craft soft drink company, takes care in its advertising to emphasise how much of their non-alcoholic tonic goes into the glass along with your gin. And their point is undeniable: you may have hundreds of craft gins to choose from, but for every measure you’re likely to add three of tonic, and if craft is your thing, that tonic is most likely to be Fever Tree.
Yet craft can mean any number of things: handmade, additive-free products; carefully-sourced, natural ingredients, such as herbs or ancient remedies; revived production techniques; old-fashioned flavours; passionate creators; and anti-corporate, small-business credentials all come under the heading of craft. There is space under that heading for several brands – if they are committed, passionate, and clever.
A spoonful of sugar
If the corporate world, and the evils it is believed to contain and perpetrate, has an edible equivalent in the public mind, it is surely sugar. We are bombarded with warnings about the dangers of sugar, and its prevalence in almost everything we eat. In That Sugar Film, Australian actor-director Damon Gameau makes himself sick and fat by eating only products with hidden sugars, so reminding us both of how bad sugar is and how hard it is to avoid. Today’s young people are reading the message loud and clear, turning their backs on alcohol, in favour of soft drinks, health drinks and natural additives with proven health benefits.
And the government is reinforcing this message about the evils of sugar, via a dedicated sugar tax that will raise prices on sugary beverages from April 2018. As the biggest sugary drinks manufacturers scramble to alter their recipes and their marketing to circumvent both the tax and the increasing hostility to brands perceived as harmful, particularly for children, there is an opportunity for brands with healthier beverages to nip into that space before those big players can do so.
A double opportunity
So far, Fever Tree is almost the only CSD manufacturer to take full advantage of the market’s desire to go natural and stay sober. Their products taste good – but they look good too, with packaging and messaging that plays up their natural ingredients and artisan production methods. Nobody would be ashamed to prop up a bar holding a Fever Tree lemonade, with its smart label and waft of Sicily. And, thus propped, the consumer can drink these drinks until their money or time runs out – no alcohol means no caution over quantities required. What’s more, they taste so good that drinking them is no “dry January” hardship.
As people’s health concerns increase, and the shift from drunk in the pub to sober in the restaurant, bar or café continues, CSD manufacturers and marketers have a land of opportunity before them that resembles El Dorado. This is an almost untouched market. There are waters, flavoured or sparkling, on the one hand, and their market share is growing. Sugary drinks, meanwhile, had seen their market share decline for nine years straight in the US, according to the 2014 Beverage Digest Fact Book.
Nonetheless, according to Euromonitor in 2014, the US soda market is worth approximately $39 billion, while the market for unflavoured or flavoured sparkling water, energy drinks and functional water is just $4 billion.
So, between the two established – but wildly uneven – pillars of the market, is a wide-open space for brands to fill with intelligent, elegant, and innovative substitutes for alcohol – ones that have a story to tell about their creation, in the best craft-market style, but ones that are also able to differentiate themselves from craft alcohol brands by talking about what’s best for the planet, your tastebuds and your health.
© FoodBev Media Ltd 2024