American beverage marketers released a cumulative total of just 10 new energy drinks in February, according to new data from Mintel – a fraction of the 62 released during the same period in 2008. The segment fared better in March (24 introductions), but Mintel’s data confirmed what we’ve known anecdotally: under pressure from the slipping economy, beverage marketers are reeling back on product innovation.
Firms rolled out just over half as many new beverages in the first quarter of 2009 as they did in 2008. The fall hit nectars hardest, as the niche, premium segment dropped nearly 85 percent, but water (72 percent), iced tea (80 percent) and iced coffee (72 percent) suffered similarly.
Mintel’s data did reveal a couple of bright spots, though. Sports drinks and meal replacements – revitalized by the rise of Muscle Milk and a renewed push on isotonics by both Coca-Cola and PepsiCo – saw more than double the number of new product introductions in the first three months of 2009 as they did in the same period in 2008.
The overall downward trend in innovation may be leveling off. While new beverage introductions were down 48 percent in the first quarter of 2009 compared to the first quarter of 2008, that gap has slimmed as the year has gone on. January 2009 saw 62 percent fewer introductions than January 2008, but March 2009 only saw a 31 percent drop in new products compared to the same month the previous year.
PepsiCo introduced a new “Eco-Fina” bottle for Aquafina that weighs in at half that of its 2002 predecessor. The company boasts that the new package will save 75 million pounds of plastic per year, and it may go a long way toward saving the brand’s image.
Bottled water has been under assault from environmentalists as they seethe about the energy used to deliver something that flows from every faucet in the U.S. One study pegs the energy required to deliver a bottle of water at 2000 times that of tap water, and, where the environmentalists have left off, cash-strapped politicians have picked up. Florida governor Charlie Crist has floated a number of ideas for using bottled water revenues to help fill the state’s budget gap, and New York’s proposed “Bigger Better Bottle Bill,” which would extend a soda-based deposit to include bottled water, has been gaining momentum.
With those forces (and falling sales growth) in mind, bottled water brands have employed a tool belt of marketing tricks to deflect bad press, and Aquafina’s entry is really the next step in a continuing trend. The Eco-Fina bottle weighs in at 10.9 grams, 15 percent less than the bottles Nestlé uses for its regional labels such as Poland Spring, and 0.1 grams less than Nestlé’s Pure Life bottles.
Still, it won’t be long before another brand introduces an even lighter bottle. Nestlé said it’s already planning one. Then the Pepsis and Cokes of the world will have to find a way to carve out even more PET from their shells.