Rabobank: Combination of Soft Drinks and Dairy Beverages Will Emerge as a “Megatrend” in 2012

In a new report on the global beverage market, Rabobank, an international financial services firm, states that greater consumer demand for health and wellness beverages, rising commodity costs, and growing demand from emerging markets will be key influencers of trends and innovation in 2012, according to an article in nutraingredients.com. Rabobank, which holds close ties to the global food and beverage industries, also noted that over the past two years a number of major beverage companies have attempted to establish stronger positions in health and wellness through the acquisition of and joint ventures with international juice and dairy companies.

Rabobank’s report, titled “Best of Times, Worst of Times: Global Beverage Outlook 2012,” asserts that “the world’s thirst for protein drinks, prebiotics and other functional drinks has led to a burst in new product creations,” and that a combination of soft drinks and dairy beverages will emerge as a “megatrend” in the coming year.

The report cited PepsiCo’s purchase of Lebedyansky, Russia’s leading juice company, as well as Wimm-Bill-Dan, the country’s top dairy provider.  Additionally, the cola giant acquired Beyti, an Egyptian juice and dairy manufacturer, and entered a joint venture with Saudi Arabia’s Almarai Dairy and another with Müller, a dairy company in Germany.  Moreover, Rabobank noted recent comments by Sam Lteif, PepsiCo’s general manager for global nutrition, who said that dairy had “tremendous potential” within PepsiCo’s global growth strategy, and suited the nutritional needs of all consumer groups.

Rabobank also noted Coca-Cola’s current position in the convergence of soft drinks and dairy and pointed to Super Milky Pulpy Juice, a popular beverage brand in China, which has become Coke’s most recent billion-dollar brand. The report also posited that Coke’s stated goal of doubling revenues by 2020 means that the company will need to explore newer beverage categories including hot drinks, dairy, and soy-based beverages.

The report also expects rapid growth in fruit drinks and nectars and sees global consumption reaching 70 billion liters this year, with China, Russia and India at the forefront of growth. Rabobank analysts predict that greater use of fruit juices and nectars in beverage products, however, fruit farmers were unlikely to benefit from the growth considering that most would occur in products with a sub-25 percent juice content.