3 in 5 Americans agree soft drinks made with natural ingredients healthier
By Canadian Vending
By Canadian Vending
Chicago – While the carbonated soft drink category is facing consumer perception challenges, opportunities exist to strengthen brand trust, authenticity and experience through trending natural and craft segments, suggests a report from research firm Mintel.
With carbonated soft drinks facing mounting negative health perceptions from Americans, craft and natural options are showing promise among the most active soft drink consumers. While natural and craft comprise small, relatively new segments of the carbonated soft drink category, “Mintel’s new Carbonated Soft Drinks: Spotlight on Natural/Craft US 2015” report suggests nearly three in five (57 per cent) U.S. adults agree that carbonated soft drinks made with natural ingredients are healthier than those made with artificial ingredients. What’s more, 34 per cent are interested in seeing carbonated soft drinks with added benefits.
Despite being in its early stages, the craft and natural segments are poised to grow. While Mintel’s research shows that two thirds (66 per cent) of U.S. adults do not currently drink craft sodas, 44 per cent of non-craft drinkers are interested in trying craft products.
A similar trend is seen with natural soft drinks, of which 40 per cent of consumers currently drink, with usage highest among parents (60 per cent) and millennials (58 per cent).
Natural shows potential to sweeten the market
Concerns surrounding artificial sweeteners, such as aspartame, strengthen natural and naturally sweetened carbonated soft drinks’ positioning as a better-for-you alternative to regular and diet sodas, Mintel said in a news release. These challenges have contributed to years of sales declines in the carbonated soft drink industry, with sales dropping 3.6 per cent between 2011-2014. Of Americans who currently consume or are interested in craft soda, 54 per cent indicate that natural or real ingredients are important to them, including 50 per cent of parents, highlighting natural soda’s potential in the market. Another third (34 per cent) of U.S. adults are interested in seeing carbonated soft drinks with added benefits, such as protein, vitamins or minerals.
“The definition of health is changing from desiring low/no-fat and -sugar, to ‘real’ or unadulterated ingredients. Natural and craft brands tend to feature ingredients in more natural forms, to position products as a better-for-you option,” said Elizabeth Sisel, beverage analyst at Mintel, in the release. “Craft and natural sodas also provide new flavour experiences, including blends of fruits, spices and herbs, while hitting naturally sweetened and premium ingredient trends. However, the segments are still too small to generate a huge impact on category sales, although interest in natural/naturally sweetened and craft options is promising. Positive health perceptions are on the side of craft and natural soda, but manufacturers need to justify high prices and build awareness to grow sales.”
Appreciation for craft flavours and perceived healthier ingredients
U.S. parents (55 per cent) are more than twice as likely as non-parents (23 per cent) to consume craft sodas.
Consumer sugar concerns have not halted consumption of craft sodas, which has increased this year (34 per cent) compared to 2014 (30 percent), propelled by millennials and parents. Increased craft consumption is not only driven by its appeal to consumers turning away from regular carbonated soft drinks, but also from those looking for alternatives to alcoholic beverages. Nearly three in five (57 per cent) consumers agree that craft sodas allow them to enjoy a unique type of non-alcoholic beverage, with two thirds (66 per cent) of millennials in agreement. Furthermore, half of craft soda drinkers (49 per cent) are interested in craft sodas that pair with meals and 42 per cent are interested in creative flavours.
Mintel research indicates that U.S. parents (55 per cent) are more than twice as likely as non-parents (23 per cent) to be craft soda consumers. As consumers start families, many look for non-alcoholic alternatives, including 70 per cent of parents that overwhelmingly agree craft sodas allow them to enjoy a unique type of non-alcoholic beverage (versus 50 per cent of non-parents). Additionally, more than half (53 per cent) of non-craft drinking parents report that they are interested in trying craft sodas, compared to 42 per cent of non-parents.
“Craft carbonated soft drinks have the potential to peak interests similar to the craft beer segment, offering consumers artisanal beverages that often support local communities and provide a complete taste experience through premium ingredients, unique flavours and small-batch quality. Similar to the progression of craft beer, consumers are veering away from big brands and seeking smaller brewers that are perceived as more authentic,” Sisel said.
Unlike regular carbonated soft drinks, which are facing negative perceptions of health-associated risks and artificial ingredients, primary lack of consumer interest in natural and craft sodas is driven by product unfamiliarity and premium pricing. Among non-craft drinkers, one quarter (26 per cent) said that they are unfamiliar with craft soda brands, craft soda flavours (23 per cent) or just do not know what craft soda is (22 per cent). Additionally, more than half of all consumers (55 per cent) agree that natural and craft options are too expensive to purchase on a regular basis.
Comparisons to regular carbonated soda also hinders U.S. consumers from embracing craft and natural options. In fact, 42 per cent of consumers worry that natural versions of their favourite soda brands will not taste the same, with 18 per cent of non-craft drinkers not interested in craft products because they prefer the taste of regular soda.
“While the carbonated soft drink category is facing consumer perception challenges, opportunities exist to strengthen brand trust, authenticity and experience through trending natural and craft segments. However, natural and craft manufactures are tasked with justifying higher prices and increasing familiarity through better exposure. The predominant negative attributes of craft soda could be curbed in time as more products enter the market and pricing evens out,” Sisel said.