Chris Whiting, category manager – beverages at Synergy, explores opportunities to create a point of difference in the beverage market.

Following a period of stagnation, the beverage market has significantly evolved in the past five years to become a hotbed of innovation. No longer viewed as simply a means of hydration, beverages are increasingly perceived as a premium consumption experience.

While differentiators such as functionality, naturalness and eye catching packaging remain important, these individual beverage characteristics are not enough for todays discerning consumers.

Since 2010, the category has seen consistent year on year NPD growth, leading to the market becoming increasingly diverse and complex. From energy drinks and ready to drink (RTD) teas and coffees to craft beers and frozen cocktails, innovation is rife. In fact, development activity during 2015 is already estimated to be around 60 per cent higher than it was in 2010 – and with the year not quite over, this figure is expected to rise further. However, the challenge for manufacturers is harnessing this opportunity.

Flavour innovation has always been, and continues to be, a significant trend in new product development across the entire food and beverage industry. In the beverage market in particular, tropical and exotic flavours are trending in soft drinks, while vegetables are becoming increasingly popular in juices, and savoury flavours are carving out a niche across both the alcoholic and non alcoholic categories.

Identifying the next new and novel flavour trends is therefore vital, as manufacturers look to diversify their offering and capture and maintain consumer interest.

Breaking the norm

For many, beverages are a tool for ritual consumption in everyday life. A fresh pot of tea or coffee, a jug of milk and a carafe of orange juice are commonplace on the breakfast table in many households. However, in todays society, consumers are increasingly looking for new experiences and breaking away from what theyre used to.

Furthermore, as consumers are increasingly well travelled, not only are they exposed to a greater array of tastes, but they begin to demand even more variety when they return home, too. As a result, new taste sensations are key in retaining interest in new food and beverage launches.

New flavours and combinations of flavours are one way beverage manufacturers can target experience seeking consumers. For example, well known brands such as PepsiCo continue to push the boundaries to challenge and excite with new flavour launches. In 2014, the company launched its strawberry milk flavoured Pink Cola to the Japanese market, following previous limited edition flavour combinations, including Ice Cucumber Pepsi, Salty Watermelon Pepsi and Red Bean Pepsi.

In addition, beverage kits are becoming increasingly popular, allowing consumers to tailor and have control over their own beverage experience.

Meanwhile, tropical fruit flavours are an emerging trend in the soft drinks market, with blood orange, pineapple, passion fruit, mango and grapefruit becoming increasingly popular due to their exotic characteristics. This marks a significant shift away from more traditional flavour profiles such as orange, apple and blackcurrant.

Melon is also an up and coming flavour across the beverage category – from spirits to juice based beverages and sparkling waters. With its light and refreshing taste, melon and its various varieties, such as honeydew, watermelon and galia, can offer consumers a fun and exciting alternative without straying too far from the familiar. It can also be easily paired with citrus or cucumber profiles, for example, to create exciting flavour combinations.

Every sip counts

 As the overall move towards health consciousness continues, consumers increasingly have a greater awareness of the effect of sugar and calorie intake in relation to health. This has fuelled a growing demand for convenient health orientated solutions, with a rising number of products displaying healthy claims such as reduced sugar, low calorie and high in antioxidants.

In addition, there is a greater focus on what my drink does for me, as more and more consumers look for products that boast a myriad of nutrients and health benefits.

For centuries, hot tea has been lauded as a healthy beverage due to its antioxidant content, as well as its low fat, sugar and sodium levels. Consequently, the growing preference for healthier beverages has driven demand for RTD tea drinks in recent years.

One of the biggest success stories in the beverage category over the last 12 months, the popularity of tea essences and extracts has soared – especially in iced teas, offering a caffeine- and sugar-free alternative to carbonated drinks. In fact, in 2014, the iced tea category was the fastest growing soft drink category for the fourth consecutive year.

Going beyond traditional black tea profiles to include lemonade and juice blends is just one way manufacturers have attempted to maintain consumer interest in RTD teas. Popular tea flavours include lemon and peach, as well as flavour combinations which have added health connotations, such as blueberry and honey.

In addition, there has been a global trend toward health claims on RTD teas, with approximately 62 per cent of all iced tea launches making at least one health claim.

At the same time, the health and wellness trend is also creating new opportunities in the RTD cocktail category. Following the growth in concern about what we put in our bodies, consumers are increasingly looking to moderate their alcohol intake. As a result, top bartenders have predicted lower alcohol cocktails will take off in the next 12 months – out with the long island ice teas and in with the espresso martinis.

As such, manufacturers are looking to top mixologists for inspiration to create no/low alcoholic options with additional health connotations. Herbs, vegetables, botanicals and teas are expected to be big flavours in the future, with existing examples including sweet potato bellinis and matcha green tea based cocktails.

Flavours from nature

 In line with the overall trend towards healthfulness, consumers are looking for clean labels that are easy to understand – they want to know wher the ingredients are from and they want their drink to taste and look like what is being communicated.

Theyre also looking for simple, authentic ingredients that provide a unique offering. Ginger is one such ingredient, which is seeing major growth in the beverages arena.

Known for relieving digestive problems such as nausea, loss of appetite, motion sickness and pain, ginger has historically been used in carbonated soft drinks in the form of non alcoholic ginger beer or as a flavour in hot tea beverages. However, it is gradually becoming prevalent across wider beverage formats.

Inspired by the trend for juicing fruits and vegetables, ginger is now a common flavour in juice drinks, as well as being hugely popular in hot drinks, iced teas and flavoured waters.

Similarly, new flavours such as coconut, hibiscus, maple and botanicals are experiencing comparable popularity and growth thanks to their strong appeal among those seeking natural ingredients.

Dare to indulge

For busy consumers, especially parents, meal times can provide a rare moment of guilt-free indulgence. In line with wider market trends, consumers seeking to indulge are looking to exciting flavours that offer a real treat, with rich, indulgent and sophisticated adult flavours growing in popularity.

Most recently, ingredient suppliers are noticing growing interest in coffee essences and extracts across the beverage market. From RTD coffees to craft beers, coffee is a versatile flavour that works well with other brown flavours, such as vanilla, nuts, chocolate and caramel, to create a rich, indulgent profile.

Manufacturers are also increasingly taking inspiration from other product categories to create novel and indulgent beverage experiences. Crossover with the dessert category, for example, is particularly prominent, with recent product launches including salted caramel, peachberry cobbler and red liquorice dessert flavoured vodkas.

At the same time, cake flavours such as caramel coffee, chocolate brownie and birthday cake are being incorporated into everything from vodkas to smoothies and nutritional products to create added indulgence.

Adults only

 Consumers looking to make the most of rare free time are seeking food and beverages that allow them to relax, away from the stresses of everyday life. For many, relaxing with a cold alcoholic drink after a long and busy day is the ultimate indulgence.

And, as consumers taste buds become more adventurous and the demand for premium quality products grows, indulgence seekers are demanding beverage options which allow them to bring the bar experience into the comfort of their own living room. As a result, retailers are increasingly offering dine in options with an indulgent twist, often incorporating premium ingredients with an added element of luxury.

One of the smaller categories in the alcoholic beverage segment, but also one currently experiencing significant growth in the UK, is the RTD cocktail category. Barely on consumers radars five years ago, changing market trends have brought forth an opportunity for brands to innovate with exciting new flavour combinations and formats. In addition, products featuring a premium label claim have almost doubled since 2010. This has led to the advent of frozen, flavoured alcoholic beverages – an emerging category in the beverage market.

With premium flavour combinations including lychee, mint, vodka and lime; and gin, Campari and lychee chieu, blended with orange, green tea and aloe vera sorbet, consumers are able to enjoy the luxury of a frozen cocktail in their own home.

Creating appeal

 Flavour can offer a crucial point of difference in a competitive beverage market. As a result, monitoring and tracking upcoming flavour trends is a sure fire way for manufacturers to make their products stand out and excite consumers discerning palates.

Meanwhile, authenticity remains the deciding factor in the success of any new product launch. Consumers want drinks which look and taste like what is being communicated on the packaging.

Working with an expert in flavouring provides formulators with the insight and expertise they need to create unique, flavourful and authentic products with real consumer appeal.