Industry analysts have wondered how The Coca-Cola Co.’s two recent large-scale investments — Monster Energy and Green Mountain Coffee Roasters (now Keurig Green Mountain) — will affect the company’s carbonated soft drink business. Yet, as companies like Coke and PepsiCo seek new avenues of profitability, Chicago-based market research group Datassential wonders how the diversification of the cola giants could influence innovation in the market place.
Datassential’s latest report, titled “The Beverage Landscape, What the Current Beverage Market Means for Innovation,” notes a recently-published New York Times article about PepsiCo’s interest in cashew apples, as well as the new U.S. launch of Coca-Cola Life and investments in Zico and Honest Tea. Also mentioned is the push for greater customization and the immersion of technology, as seen with Coca-Cola FreeStyle and Pepsi Spire.
When considering the stance of PepsiCo’s leadership, one could view the company’s non-core endeavors as efforts to offset CSD declines.
“When PepsiCo CEO Indra Nooyi was asked about declining soft drink sales, including consumer ‘self-regulation,’ at a conference last year, she was characteristically forthcoming in her response,” Datassential writes. “If the company didn’t address barrier to consumption — namely, high sugar levels and artificial sweeteners — in three to five years consumers could ‘walk away’ from carbonated soft drinks completely.”
The ripple effects extend beyond Coke and Pepsi, the report notes. Shifting consumer preferences have influenced innovation that ranges from cold-pressed juices to the Starbucks Fizzio line, which features Lemon Ale, Spiced Root Beer and Golden Ginger Ale varieties alongside modifiers such as “handcrafted” and “carbonated fresh.”
The influence can also be felt on the retail side of the industry. Target and Kroger, mass chains with a middle-America focus, have taken on emerging brands such as Chia\Vie and Live Soda Kombucha and launched programs with sunny-sounding names like “Made to Matter” and “Taste of Tomorrow.”
“Both manufacturers and operators clearly see the current beverage market as an opportunity to innovate and test new products, adding excitement to menus and brands,” Datassesntial writes. “It’s a chance to offer premium beverages at premium prices. Premium, customization, uniqueness, health, function — these trends define the current beverage landscape.”
Judge Allows Class Action Suit vs. Coke to Proceed
U.S. district judge Jeffrey White has allowed most claims in a class-action lawsuit against Coke to proceed, despite his disapproval of money-seeking plaintiffs, writes FoodNavigator-USA.
The suit, filed by plaintiffs George Engurasoff and Joshua Ogden in August 2013, argues that Coke misrepresents its flagship product by claiming that it’s free of added preservatives and artificial flavors when it contains phosphoric acid.
“Under federal law, they allege, if Coke is using phosphoric acid to add tartness, it should be classified as an ‘artificial flavor’ because it imparts flavor but is not derived from natural sources,” the article notes.
The plaintiffs state that if the ingredient is intended to prevent spoilage, it should also be classified as a ‘chemical preservative.’ Coke calls the lawsuit “meritless” and counts this as yet another case brought forth by class-action lawyers who want rake it in under a guise of protection.
The skeptical judge said: “The Court will review any request for attorneys’ fees as part of a class action settlement with close scrutiny.”
Canadians Are Berry Proud People
We’ve seen superfruits take center stage in the beverage industry as emerging brands use ingredients like acai and coffee fruit. There’s another one ready for the market, but its name is still up for debate.
A recent story by Time highlights the Saskatoon berry, which is sourced from Saskatoon, Saskatchewan, and supposedly tastes like a mixture of cherries, almonds and grapes. A professor from the University of Saskatchewan said that it could be offered as an alternative to blueberries.
Of course, Americans are struggling with the name of the berry for reasons beyond easy comprehension (illiteracy? laziness? obesity? ambivalence?). With that in mind, stateside marketers want to change the name to “juneberries.” The idea, it seems, doesn’t sit well with the Canucks.
Sandra Purdy, president of the Saskatoon Berry Council of Canada, told Time that she feels slighted by the name-change suggestion.
“That won’t happen,” she said. “Especially given that they got those plants from Saskatchewan and our Canadian-grown berries.”