Opinion from global food and drink experts, Zenith Global

It seems yes, to some extent, in:

• encouraging product reformulation with less sugar

• increasing price differentiation according to sugar levels

• accentuating consumer behaviour change towards lower sugar products

• raising money for government.

It seems no, to an arguably greater extent, in :

• not materially reducing obesity

• distracting attention from whole diet change

• creating product substitution at extra cost without extra health benefit

• hurting poorer consumers more.

The latest analysis of the Philadelphia tax shows local ‘sugary beverage’ sales fell by 51%, but:

• Local supermarkets also lost out on other food and household sales.

• “Supermarkets bordering Philadelphia, however, had an increase of similar magnitude in combined sales.”

• “The tax has also created a black market” with “white trucks and vans parked all over …”

• This has led to a “zero shift in what people are drinking.”

Ironically, Seattle City Council is expecting its soda tax revenue to increase in 2019. If the tax rate hasn’t risen, that must mean sales have.

Bottle and can designs have always been vital to the branding of their contents.

Yet dispense ‘fountains’ are also a key part of the tradition and these have translated into homes as well as vending.

Free dispense of water has been added in recent trials.

It is almost as if soft drinks have been trying to reinvent themselves beyond their packaging.

Now, the industry has taken a new twist with reusable bottles for PepsiCo’s Tropicana in Paris.

This is a truly radical and inventive approach, using Terracycle’s Loop ‘circular shopping platform’.

The idea is that I can order my orange juice, alongside my Quaker Cruesli, online. The products are delivered in packs specially designed for durability. When I receive my next order, I return my used packs for cleaning and reuse by PepsiCo.

Once scaled up, the logistics would be very demanding, but one can imagine all kinds of synergies with a wider range of products and ultimate environmental benefit despite the delivery factor.

Back in the 1980s, I was the Liquid Milk Director of the Dairy Trade Federation with responsibilities for Britain’s doorstep deliveries of milk, which accounted for more than 80% of national sales using electric vehicles.

Plus ça change …

US organic up except dairy

June 13th, 2019 | Posted by Richard Hall in Richard Hall - (0 Comments)

US organic food sales rose 5.9% to $47.9 billion in 2018 and now account for almost 6% of all food sales, which grew by 2.3%.

Reasons highlighted by the Organic Trade Association include “clean, transparent, fresh, sustainable … environmentally friendly, animal humane, high quality, social activism.”

Fruit and vegetables were the biggest segment at $17.8 billion, up 5.6% compared with a 1.7% increase for all fruit and vegetables.

Dairy and egg sales were $6.5 billion, a rise of 0.8%. Organic eggs jumped 9.3% to $858 million, meaning organic dairy fell back.

The Association emphasised the need for continuing dairy innovation to combat the advance of plant-based products, acknowledging 2018 successes for “milk beverages with increased protein, more full-fat dairy products, new flavours and grass-fed products.”

New analysis from the US-based International Bottled Water Association finds that: “Since 2006, approximately 69% of the growth in bottled water consumption has come from people switching from carbonated soft drinks and fruit drinks.”

An IBWA survey of consumer views shows:

• 93% want bottled water available where other drinks are sold

• 89% drink bottled water on the go

• 82% of employed Americans drink bottled water at work

• 75% drink bottled water at home.

These figures speak volumes.

55 acquisitions in May

June 6th, 2019 | Posted by Richard Hall in Richard Hall - (0 Comments)

55 food and drink transactions were added to the bevblog.net mergers and acquisitions database in May. 4 were over $500 million:

• $1,500 million for the initial public offering of meat-free Beyond Meat in the United States

• $1,000 million for Japan’s SoftBank private equity arm to purchase Colombia’s Rappi food delivery business

• $575 million for Amazon and others to buy into the UK-based Deliveroo food delivery service

• $510 million for Sealed Air to take over Automated Packaging Systems in the United States.

Among the 55 total, 9 were in alcohol, 5 in ingredients and soft drinks, 4 in CBD and packaging, and 3 each in dairy, food delivery and meat-free.

A substantial 13 fell into new categories that had not been significant 5 years ago – 4 in CBD, 3 in food delivery, 3 in meat-free, 2 in plant-based and 1 in meal kits.

An even higher 15 were funding rounds of some kind.

Out of 21 countries affected, the United States had stakes in 25, the United Kingdom in 14, Canada in 7 and France in 4. 33 were inside national borders, 19 of these in the United States, 9 in the United Kingdom and 3 in Canada.

After much debate, the European Union formally adopted its single-use plastic directive on 21 May, with 3 key areas of action mandated:

• 2021 ban on single-use plastic balloon sticks, cotton buds, cutlery, plates and straws

• plastic bottle collection of 77% by 2025 and 90% by 2029

• PET bottle and cap recycled content of 25% by 2025 and 30% by 2030 for sizes up to 3 litres.

Many industry groups and individual companies have already made pledges about collection and recycled content, but these targets will require concerted effort and investment.

It’s unfortunate that PET bottles are included as a single-use item, when they can be re-used as well as fully and repeatedly recycled.

Nevertheless, the European Council’s argument is powerfully put. “Beverage bottles that are single-use plastic products are one of the marine litter items that are found most on beaches … This is due to ineffective separate collection systems and low participation in those systems by consumers.”

Immediately after the UK Soft Drinks Industry Conference, Zenith Global held a day of briefings and discussion on Global Beverage Insights with the theme of ‘Charting the future.’

The delegate polling came to many more fascinating conclusions …

• China and the United States were predicted to have the biggest influence on global beverage market development over the next 5 years, each receiving 47% of votes.

• For the technology development likely to have the biggest impact, 56% replied new ingredients/packaging, compared with 24% for e-commerce and 16% for direct delivery.

• 50% believed established companies will lose 5-9.9% of market share to innovative start-ups, with 30% saying more and 20% saying less.

• For the emerging market with the greatest growth potential, selected because they are the subject of new Zenith Global reports, 57% went for zero alcohol, 18% cannabis, 14% alkaline and 11% fermented.

• By 2030, 65% anticipated more fragmentation, 27% more consolidation and 8% more confusion.

• The biggest difference by 2030 was expected to be in packaging and distribution, scoring 35% each, then products on 26%, with very low scoring for communication, payment and taxation.

• As to who will be held most responsible for beverage impact by 2030, 43% identified consumers, 39% brands, 9% government and 4% retailers.

This year’s UK Soft Drinks Industry Conference, organised by Zenith Global in conjunction with the British Soft Drinks Association, attracted a record number of delegates to focus on its theme of ‘Crafting the future.’ Among a variety of delegate polls …

• 46% expected 2019 UK soft drinks volume growth of 2-3.9%, with 31% saying more than 23% saying less.

• 66% believed plastic/sustainability/waste is the biggest issue facing the industry today, compared with 20% for sugar/obesity/health.

• 47% felt functionality/added benefit is the biggest opportunity, with 27% opting for craft/personal/premium and 20% for wellness/natural.

• On packaging sustainability, 40% selected consumer education as the first priority, followed by 24% for collection consistency and 19% for recycling capacity.

• On the Soft Drinks Industry Levy’s effect, 60% viewed it as positive, 30% negligible and 10% negative.

• For the best future impact on sugar concerns, 33% chose sweetener naturalness, 26% sweetener taste and 15% a wider sugar tax.

• The greatest adult soft drink opportunity was perceived to be alcohol free beer/wine/spirits with 39% support, followed by herbal/botanical with 29% and mixers with 17%.