Opinion from global food and drink experts, Zenith Global

What do smoothies and energy drinks have in common ?

They’re both non-alcoholic drinks. They’re relatively expensive. Portion sizes are often small. Both have benefits.

Yet smoothies are proudly natural, while energy drinks are rarely so. One is thick, the other thin. One is marketed because of taste, the other sometimes despite it. One is consumed earlier in the day, the other later.

Anything else ? Yes. Have you noticed the similarity in their market dynamics ? Energy drinks shot up when one brand led the way and most others copied it. As with Red Bull, so with Innocent. There have been an amazing number of me-toos as well as me-too-leapfrogs in countries where the brand leaders had yet to enter. Most fell, are falling or will fall by the wayside.

Brand leaders need competition, but above all competition that differentiates and takes the market forward. Hansen did that with Monster in the United States. The UK smoothie market has already floored a succession of heavyweights as well as lightweights.

Good luck to the genuine innovators, but beware the slipstream. Consumers want copyright not copycats.

Yes, bottled water again. The anti-bottled water bandwagon seems to be gathering steam. But I genuinely believe the criticisms will turn out to be just hot air.

Which? magazine has made it a front cover story for August. This is a magazine whose product surveys I’ve valued and whose consumer campaigns I’ve supported for some 40 years.

But I feel it has let down its standards and readers on this occasion. I have written quite a lengthy letter to the Editor and the text is set out below.

I earnestly hope his response will rebuild trust.


Dear Mr Fowler


I saw your August issue on my return home from work last night and I was shocked by your article on bottled water because of its numerous inaccuracies and unfounded conclusions.

My reason for writing is partly prompted by your use of my company’s statistics on your front cover and in your opening paragraph without consultation or attribution.

As a subscriber to Which? for 25 years, I have a high regard for your integrity, but on this occasion I feel you should acknowledge that your research was inaccurate and your commentary was seriously lacking in balance.

I would therefore appreciate an early opportunity for a meeting and request that you publish corrections in your next issue.

First, the front cover

On the front cover you make three statements.

  1. Drink worth £1.68 billion. This is accurate but out of date. If you had checked with us, you could have had the information for 2007.
  2. An unnecessary drink. In an increasingly obese world, I would argue that bottled water has a significant role to play because it improves our chances of choosing the best option of calorie free natural hydration.
  3. Time to dispense with bottled water. Can you really justify this? It’s healthier than other beverages. It has a lighter carbon footprint than other packaged beverages. Surely this at least deserves debate? Where is the other side of the argument? Shouldn’t your readers be entitled to make an informed choice? If you did dispense with bottled water, the main choices would involve calories, fat, alcohol, chlorine or dehydration. And what would happen in emergencies like Northampton last month?

Second, the facts

There are so many inaccuracies to correct, but for the moment I shall highlight five.

  1. Sales dropped by 9% last year. Your researchers chose the worst figure published, based on one part of the market. The actual figure was 4%, based on our comprehensive total market assessment, and this has been in public use for over three months.
  2. Two gallons are wasted for every gallon. No water is wasted any more than it is wasted to make fruit juice, milk or meat. Some companies use less than half a litre more than is put in a litre bottle. This compares with 660 litres of embedded water for milk and 850 litres for orange juice. Tap water leaks more in half a day than the UK bottled water industry uses in an entire year.
  3. Water purified to put into a bottle. 97% of UK bottled water is naturally sourced and not purified in any way. It doesn’t have to have safe levels of chlorine, because there is none. Many of your readers might appreciate the benefit of consuming a water whose source is known and naturally replenished, whose catchment area is protected, whose taste is consistent, and whose quality is so good it needs no treatment as well as being further guaranteed by only being released for sale after all tests are clear.
  4. Tap water not recycled from sewage. Thames Water’s own website states the direct opposite. I quote: “80% of London’s tap water comes from the River Thames and the River Lee … it is true that some of the flow in the rivers gets there from sewage treatment works …”
  5. 0.5% of UK drinking water contains lead in unacceptable amounts, while 99.96% of water complies. These two statistics must be incompatible. Moreover, 0.5% failure would represent 35,000 million litres, 15 times total annual UK bottled water consumption.

Third, unfounded opinion

Your team’s analysis seems lazy and self evidently biased. You reference no industry sources. You insinuate rather than substantiate key points.

  1. For example, the mention of Fiji and New Zealand is used to accentuate concern about food miles. But you know food miles alone are deceptive and anyway water from outside Europe is under 1% of the market.
  2. June’s contamination scare in Northamptonshire cut off supplies to 250,000 people for 10 days and bottled water made a huge difference for residents there. Yet you gloss over the problem and provide no recognition of the solution.
  3. You lash out at plastic water bottles, but plastic has huge advantages in cost and convenience as well as being 100% recyclable. Water represents a very small proportion and recycling improved 68% last year. An altogether better approach would be to show how families and local authorities could increase recycling dramatically by following best practice in this country and abroad.

My conclusion

Which? is renowned for its properly researched plain speaking to inform discerning consumers. I really do feel your team has failed in its research and objectivity in this instance and urge you to redress such damaging criticism of a quality conscious industry providing a healthy product that benefits consumers.

Yours sincerely

Richard Hall

Last night’s BBC Panorama programme was one of the most confused compilations of unrelated stories ever broadcast. War was the main theme, with hospital superbugs and bottled water curiously interspersed.

One moment bottled water was evidently refreshing British troops in Afghanistan, then it was being criticised for its environmental impact. Afterwards, the BBC devoted an hour to the environmental impact of floods in Britain last summer, acknowledging how bottled water had made life bearable for hundreds of thousands whose tap water supplies had become contaminated or cut off.

The BBC had nothing really new to offer in the bottled water debate. Objectivity would have been improved if it had used the latest market statistics. It chose to use weak April figures because of colder weather, when May sales were much higher because of hotter weather. I guess that didn’t suit its argument.

It concluded with the cost savings of a local Council, my own in fact, from no longer buying bottled water. But most Councils and Government departments seem to be paying extra on expensive filters for their tap water. The Houses of Parliament decided to retain bottled water because water jugs and glasses cost far more to serve, replenish and clean.

War and water need more care.


April 30th, 2008 | Posted by Richard Hall in Dairy - (0 Comments)

74 tonnes of yogurt is wasted every year in Sweden because consumers have difficulty reaching the bottom of the pot.

Yes, someone has actually worked this out. And, believe it or not, a local manufacturer is now introducing a flexible pack to overcome the problem.

I wouldn’t want to slip up on my facts.

So it’s happened. As predicted. Monster is now the top US energy drink brand by volume, with a 2007 all channel share of 28%. Red Bull is still way ahead by value, but its volume share is down to 27%.

There’s more activity from others too. Pepsi’s AMP and SoBe are on 9%; Coke’s Full Throttle, Fuze NOS, Tab Energy and Glacéau Vitamin Energy are at 10%; and Coke partner Rockstar has jumped to 19%.

Overall, the market gained 29% to more than 5,000 million servings. I am indebted to Beverage Digest for the figures.

All brand leaders need real competition to keep consumers interested and markets alive. The United States is beginning to produce some serious new energy.

A year ago the media speculated about Cott merging with Cadbury Schweppes’ beverage operations. That never seemed workable to me.

Now, after more financial and managerial turbulence, Cott is reported to be seeking salvation in bottled water and premium soft drinks. This might buy some time with the financial markets, but is not a complete solution.

Cott’s core values are retailer partnerships, with high service and low costs. If these are the basis for new product development, then I accept. If not, then premium soft drinks and bottled water will raise risks and lower margins.


April 21st, 2008 | Posted by Richard Hall in Mergers & Acquisitions - (0 Comments)

Not only is the newly demerged Dr Pepper Snapple Group due to become separately listed on the New York and London stock exchanges.

The huge dairy merger of Campina and Friesland is also due to be finalised.

A date to watch.

There are many reasons for Red Bull’s success. One of them has been its unity of purpose in a single product, a single can, a single message. Its best extensions have stayed close to the core – a sugar free variant, a larger can, but still with the same design and the single message.

However generous one might be about the company’s occasional forays into other market sectors, they certainly distracted management and probably dented energy drinks growth. Carpe Diem, Lunaqua and Sabai have not exactly been crowning glories.

So, what should we make of Red Bull Simply Cola ?

To me, there are just too many contradictions. I like the idea of “natural” cola, but this is not a word that springs to mind for Red Bull. Cola is a big gulp, unsuited to a small can.

In the United States, Monster Energy is closing fast on Red Bull. 20 years ago Pepsi gained momentum when the other guy supposedly blinked. Is Red Bull blinking ? I hope not.