FUTURE INNOVATION IN BEVERAGES FLAVOR

BUILDING THE NEXT GENERATION OF DRINKS & BEYOND

BEVERAGE ASIA FORUM 2012 14 15 JUNE 2102

Phikul Tanskul

FUTURE INNOVATION IN BEVERAGE FLAVOR

BUILDING THE NEXT GENERATION OF DRINKS & BEYOND

TRENDS & FORESIGHT

FROM MEGA TO PRODUCT TREND

BEVERAGES TRENDS 2011 MARKET OVERVIEW

FROM CSD, RTD COFFEE, RTD TEA, FRUIT JUICE TO FUNCTIONAL AND ENERGY DRINKS

NEW PRODUCT DEVELOPMENT STRATEGIES

&KEY SUCCESS FACTOR

NEW FLAVOR
ACCEPTANCE

TRENDS & FORESIGHT FROM MEGA TO PRODUCT TREND

Mega Trends
Changes in the social, cultural, economic and technological sectors

Consumer Trends
Changes at the level of peoples attitudes and behaviour (trends fashions, phenomena)

Product Trends
Offerings from companies in response to the changing environment

CONSUMER TRENDS LIFESTYLE RESEARCH METHODOLOGY

Desk Research
Trend Research: Evaluation and analysis of relevant studies, surveys and market reports as well as topical material on consumer trends. Trend Evolution: Comparison of results with previous reports, identification of changes on the part of consumers and corresponding responses from the market. Trend Definition: Overall trends and influences per country for the beverage market and flavours within the three segments as well as of changing consumer behaviours and needs.

Correspondent Research
Store Checks: Product scouting for current beverage favourites as well as new and interesting product concepts, ingredients and flavours. Interviews with store managers on consumers' buying behaviour. Trend Analysis: Analysis of cultural country specifics regarding drinking habits as well as changing consumer behaviours and needs. Country and flavour trend analysis within the 3 segments. Bar & Caf Checks: Search for new flavour influences as well as for interesting beverage concepts that might also be of interest for the convenience market. Interviews with bartenders about consumers' drinking habits and new needs. 4

RESEARCH APPROACH TRENDSCOUNTING EXPERTS

New York (US) Quinn Editor

Paris (FR) Anika Hair Stylist

Milan (IT) Gabriella Strategic Planner & Blogger

Moscow (RU) Wasilij Event Manager

Shanghai (CN) Nele Blogger

Sao Paolo (BR) Luciana Trendscout

Berlin (DE) Jan-Peter Journalist

Stockholm (SE) Philipp Journalist

Dubai (UAE) Lilla Analytical Chemist

Singapore (SG) Wan Li Journalist

London (UK) Ella Trendspotter

Barcelona (ES) Annette Brand Manager

Johannesburg (ZA) Susan NGO Project Coordinator

New Delhi (IN) Eti Account Executive

Tokyo (JP) Patrick Consultant

Trendscouting by correspondents in 15 relevant markets

BEVERAGE TRENDS 2011 COUNTRY OVERVIEW

SWEDEN Stockholm FRANCE Paris GERMANY Berlin UK London SPAIN Barcelona ITALY Milan RUSSIA Moscow USA New York

CHINA Shanghai

UAE Dubai INDIA New Delhi BRAZIL Sao Paulo

JAPAN Tokyo

SINGAPORE S. AFRICA Johannesburg

TREND UPDATE 2011+ DIFFERENTIATION

NATURE`S PURISM
Degree of Sophistication Seasons Seasons Best Best Local Taste Local Taste Trust Minimalism Trust Minimalism

PREMIUM INDULGENCE
Degree Degree of of Sophistication Sophistication Artisan Tickling Artisan Tickling Upgrade Upgrade Taste Taste Precious Precious Botanicals Botanicals

SMART BENEFIT
Degree of Sophistication Mental Mental PerforPerformance mance Hyper Natural Hyper Natural Power Hydration Power Hydration

EMOTIONAL DISCOVERIES
Degree Degree of of Sophistication Sophistication

Retro Origin

Cosmopolitan Thirst

Hidden Treasures

MEANING OF NATURALNESS CHANGE THROUGH DECADES

1980 - 1990
Ideological term Environmental problems NATURAL = whole foods, healthful, good

1990 - 2000
Not as idealistic A healthy, tasty way NATURAL = soft, treated with respect, light, rich in vitamins

2000 - 2010
Innovative & healthy Authentic taste Natural = simple, honest, pure, unsophisticated, smart, full taste

FUTURE INNOVATION IN BEVERAGE FLAVOR

BUILDING THE NEXT GENERATION OF DRINKS & BEYOND

TRENDS & FORESIGHT

FROM MEGA TO PRODUCT TREND

BEVERAGES TRENDS 2011 MARKET OVERVIEW

FRUIT JUICE, RTD COFFEE, RTD TEA AND FUNCTIONAL DRINKS

NEW PRODUCT DEVELOPMENT STRATEGIES

&KEY SUCCESS FACTOR

NEW FLAVOR
ACCEPTANCE

RTD tea

MARKET OVERVIEW

RTD coffee Carbonates Sports drinks Energy dri nks Bottled water 100% frui t juice (from concentrate) Frui t dri nk (0-29% jui ce) Nectar (30%-99% jui ce) 100% frui t juice (not from concentrate)
4000

40000

35000

30000

25000

Fruit juices 3500 RTD Coffee 3000 RTD Tea 2500 Drinks Functional
2000 1500

20000

15000

10000

1000

5000

500

0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Market value (MTHB)

Source: Datamonitor, May 12

Market volume (MLiters)

Carbonates
less sweet means sales increase

Top 10 Flavour

Top 10 Claims

Source : GNPD

Carbonates NPD
Low\No New Flavour
Cola & Orange

Kirin Mets Zero Cola Drink is formulated with indigestible fiber dextrin to suppress fat absorption during a meal. Cola Drink with Stevia

Apple & Lime

Strawberry & Kiwi

Caffeine free

Hollinger Bio Organic Cola contains 10% less sugar, natural colour, and features an all natural taste.

Mango & Passionfruit Lemon & Cactus

Fruit & Vegetable juices

Top 10 claims

Top 10 Flavor

Nature Purism

Nature, Smart Benefit, Indulgence

Nature Purism, Indulgence, Smart Benefit

Nature, Indulgence, Emotion

Smart Benefit

Smart Benefit

Emotion, Smart Benefit

Fruit & Vegetable juices NPD

FUNCTIONAL

Innocent Mangoes & Passion Fruits Pure Fruit Smoothie is said to be made with 100% natural ingredients, and is said that each serving provides two portions of fruits. The product contains three and a half apples, a mango, a banana, citrus juice, passion fruit, and peach.

Purdey's Rejuvenate Multivitamin Fruit Drink comprised of a formula of grape and apple juices, sparkling spring water and botanical extracts to give the consumer a claimed gentle lift and help them feel rejuvenated.

Chi Coconut Water is said to rehydrate and revive. The 100% pure product is low in fat and calories and has a natural balance of sodium, potassium, calcium and magnesium which makes it a healthy electrolyte beverage.

Rockstar Relax Tropical Guava Flavored Relaxation Drink is a sugar free, calming herbal blend. caffeine free, containing ultra premium ingredients to deliver an incredible level of relaxation.
It contains extracts of chamomile & passionflower and is said to have been designed for those who need to unwind from their exhaustive lifestyles.

Fruit & Vegetable juices NPD

CROSS CATEGORY NEW EXCITING FLAVOUR

Pascual Bifrutas Tropical Flavoured Drink with Skim Milk is enriched with vitamins A, C and E, and contains no gluten or fat.

Pago World of Nature Africa Juice is a premium 100% juice made of grapes, pineapples and pink guava fruit from South Africa and marula from Africa.

Fruits Calpis Mango & Calpis Drink consists of a blend of lactic acid bacteria drink and mango juice. The product also contains a splash of orange juice, and is claimed to be perfect for the Spring and the Summer seasons 2012

Santal Active Red Orange and Carrot Drink with Ginseng and Mate is formulated with a refreshing and regenerating cooling blend of ginseng and mat extracts and contains vitamins C, E and pro-vitamin A betacarotene

Sport & Energy drinks

Top 10 Claims

Top 10 Flavour

Sport & Energy drinks NPD

Energy coffee Kids energy drink in yoghurt flv

Burn Coffee Energy Drink is a mocha flavoured energy drink with added milk and coffee extracts. The product contains 35% milk, is said to have a rich and creamy coffee taste

Starbucks Refreshers Orange Melon Sparkling Green Coffee Energy Beverage is a lightly carbonated blend of 25% fruit juice, B vitamins, ginseng and green, unroasted coffee beans without any coffee taste.

Ajinomoto Amino Vital Guts Gear Yogurt Flavoured Energy Drink provides the equivalent energy contained in two bananas. This product also provides 130mg of calcium and 1500mg of amino acids to support children enjoying sports and exercise.

Sport & Energy drinks NPD

Hydration
Also available are the following varieties: Cranberry Citrus Super Drink; Tropical Mandarin Super Drink; Strawberry Banana Guava Super Drink; Orange Mango Black & Green Tea Super Drink; and Pomegranate Acai Green Tea Super Drink.

Tao Hydration (Hydrating Drink) is said to feature the stimulating properties of ginseng, all the vitamin C of acerola, black currant with high levels of antioxidants. It is described as a delicious refreshing non-alcoholic drink with natural blackcurrant, acerola and ginseng praised by the Chinese for centuries for optimizing endurance and mobility. This product is said to help hydrate the body and help recover after sport activity. It has a low glycemic index and is said to contain no preservatives, no artificial colourings and 100% fructose.

BodyArmor Raspberry Blueberry Goji Super Drink is an all natural drink that contains a variety of different blends: hydratation, which contains 620mg of potassium, 60mg of magnesium, and 10mg of zinc; protection, which contains 50mg of polyphenols, 46mg of catechins, 22mg of EGCG, 2g of fiber, and 20mg of bioflavonoids; vitamin, which contains 5000 IU of vitamin A, 48mg of vitamin C, 30mg of vitamin E, and 132mg of B complex; and recovery, which contains 800mcg of folic acid, 20mg of amino acids, and 20mg of L-carnitine. This product is free from artificial flavors, colors or preservatives, it contains 10% coconut water, and retails in a 16-fl.oz. recyclable bottle.

Sport & Energy drinks NPD

Imagination of your own flavour
ThinQ Lifestyle Drink is described as an all natural, multifunction, stress-relieving drink that promotes wellness for health conscious people with a busy, on-the-go style. According to the manufacturer, this is the first beverage on the market that includes SAMe, an all natural mood enhancer from substances naturally found in the body, along with 13 herbs, adaptogens, antioxidants, vitamins, electrolytes and essential minerals. The product does not contain anything artificial.

Natural Ingredients energy

Power Shot Little Miracles Organic Green Tea, Ginseng, Pomegranate & Aai Energy Drink is described as still mineral water energy drink with organic green tea and panax ginseng extracts, fruits juices and agave, said to give a refreshingly healthy natural lift

RTD Coffee: not getting canned

Top 10 Claims
Top 10 Claims Top 10 Flavour

Top 10 Flavour

Macchiato

RTD Coffee NPD

Kirin Fire CharGrilled Ice Coffee is described as a moderately sweet iced black coffee drink. This product is brewed from char-grilled coffee beans

Suntory Boss Summit of Zero Coffee Drink was reformulated and repackaged with a new look. The product contains no calories, sugar or fat just like before, but is less sweet and has a stronger coffee aftertaste than before.

The company has launched a white coffee flavoured drink made with coffee extract and mild milk, targeted primarily at young consumers in their teens to 20s who do not frequently drink coffee, as a gateway to a deeper coffee experience.

Emmi Caff Latte Vanilla Tahiti Edition Coffee Drink is made with arabica coffee and Tahitian vanilla. It contains fresh espresso made from premium coffee beans grown on Rainforest Alliance certified farms.

RTD Coffee NPD

Landliebe Milch Kaffee Latte Macchiato (Latte Macchiato Milk Coffee) is made with arabica coffee and whole milk containing 3.6% fat. The milk is from selected farms and is free of added preservatives.

Starbucks Discoveries Caramel Macchiato has been relaunched on the market with a new caramel macchiato aroma.

Jeong Food Cafe Soya Soy Milk Based Caramel Macchiato is described as a healthier coffee, with a thick rich flavour.

Denmark Milk Danish Cafe D White Chocolate Coffee Drink is said to be a European style premium dessert drink. The premium product contains 0.5% white chocolate

RTD Tea
Top 10 Claims

Top 10 Flavour

LionHeart Kombucha Oregon Strawberry Probiotic Tea has been brewed with organic sencha, green jade oolong tea and organic sugar with Oregon grown strawberries, as well as an ancient lineage of yeast and bacteria (the good kind).

Wonderfarm Tr B Dao (Winter Melon Tea) The tea drink, which is less sweet is claimed to relieve heat.

Kirin Gogo no Kocha Indulgent Cream Latte Espresso Tea features rich black tea espressobrewed under a high temperature and pressure, and matched with milk and fresh cream.

Lipton Exotic Fruit Ice Tea is noncarbonated with tea extracts and exotic fruit.

Suntory BreathFreshening Iced Tea consists of a oolong tea matched with pu erh and jasmine teas. This product is claimed to be ideal when accompanied with rich in fat meals.

Lipton Healthy Tea Off Kiwi & Aloe Tea is a low-calorie drink made from a black tea blend. This product is brewed from selected tea leaves and added with natural healthy kiwi fruit juice and healthy aloe extract with beauty benefits

RTD Tea

Columbia

Indo

Hatsu T Blanco y Mangostino (White Tea and Mangosteen) is said to combine the unmatched subtlety of white tea with the complexity and natural sweetness of mangosteen, a tropical fruit known as the "fruit of the gods" for its mild and delicate flavor.

OT Balancea Rosella Tea with Pomegranate and Barbados Cherry is made from rosella flower extract, pomegranate juice and Barbados cherries. It is rich in antioxidant vitamins A, C and E and is halal certified.

Asahi Jurokucha Premium Black Tea is made with 16 "black" ingredients including: healthy premium five black grains as well as pu erh tea, black tea, black soybeans and black sesame among others. It has a rich taste and a refreshing aftertaste, pu erh tea's mild body and black tea's flamboyant aroma. One pack of 275ml provides 110mg of polyphenol, primarily from the pu erh tea and black tea

Amazon Coconut Water & White Tea is said to combine the hydration benefits of the coconut and the energy provided by tea. According to the manufacturer, coconut water is an isotonic, immune system booster, which detoxifies and is pure and all natural.

Asian specialty drinks

MasterKong Chuan Shi Xin Yin Bing Tang Xue Li Zhi Yin Pin (Rock Sugar Pear Juice Drink)

Vendan Heart of Tea Ju Hua Cha (Chrysanthemum Tea) is made with natural chrysanthemum and honey. This tea is said to cool the body internally, quench thirst and aid in beauty.

Dragon Fruit & Aloe Vera Drink is made from pure natural aloe vera and dragon fruit

FUTURE INNOVATION IN BEVERAGE FLAVOR

BUILDING THE NEXT GENERATION OF DRINKS & BEYOND

TRENDS & FORESIGHT

FROM MEGA TO PRODUCT TREND

BEVERAGES TRENDS 2011 MARKET OVERVIEW

FROM CSD, RTD COFFEE, RTD TEA, FRUIT JUICE TO FUNCTIONAL AND ENERGY DRINKS

NEW PRODUCT DEVELOPMENT STRATEGIES

&KEY SUCCESS FACTOR

NEW FLAVOR
ACCEPTANCE

NEW PRODUCT DEVELOPMENT STRATEGIES & KEY SUCCESS FACTOR

80%

Success is difficult to achieve

of products are classified as failures, highlighting the inherent challenge of new product development (NPD).

What to consider?

Company History Current Preferences Environment factor Resources Distinctive competence

SUCCESS
NO CAFFEINE COLA DRINK TARGETTTED AT B - C CONSUMER
First launch up-country at cheaper price offer Pricing to right target group to gain economy of scale

Example 1

Promotional campaign right to target group of consumer Offer points that market leader doesnt provide Less sweet than market leader No Caffeine as another strong differentiation

CONSUMERS ARE DRAWN TOWARDS BEVERAGES THAT ARE BOTH RESPONSE TO ECONOMIC SITUATION AND HEALTHY

KEY

Company History Current Preference Resources

SUCCESS
TRUE TRUE ACTIVE INGREDIENT AT LEVEL THAT FUNCTION AND FOCUS ON RIGHT GROUP OF CONSUMERS
Functional product that taste functional and just right Clear message and consistency Proven result

EXAMPLE 2

CONSUMERS ARE DRAWN TOWARDS FUNCTIONAL BEVERAGES THAT ARE REAL

KEY

Company History Resources Distinctive competence

FUTURE INNOVATION IN BEVERAGE FLAVOR

BUILDING THE NEXT GENERATION OF DRINKS & BEYOND

TRENDS & FORESIGHT

FROM MEGA TO PRODUCT TREND

BEVERAGES TRENDS 2011 MARKET OVERVIEW

FROM CSD, RTD COFFEE, RTD TEA, FRUIT JUICE TO FUNCTIONAL AND ENERGY DRINKS

NEW PRODUCT DEVELOPMENT STRATEGIES

&KEY SUCCESS FACTOR

NEW FLAVOR
ACCEPTANCE

FLAVOR FOCUS: JUICE

ORANGE! THE NO. 1 CHOICE OF CITRUS FRUIT

Orange

Orange is the preferred choice for Citrus fruit across all Drinks category.
Peely
Freshly Squeezed /100% Juice Still Citrus Flavored/Juice Drinks Carbonated Citrus Flavored Drinks
0%

73%

21%

6%

52%

29%

9%

White Rind

48%
25% 50%

42%
75%

10%
100%

Terpenic
Orange Lemon/Lime Grapefruit

FLAVOR FOCUS: COFFEE

COFFEE FLAVOR ROASTED NUTTY SMOKY MILKY

ASIA

Chicory

2%
EUROPE
Chicory

1%

3%

2%

1%

USA

6%

3%

2% North Asia Coffee Base: Arabica direction Profile: Roasted. Phenolic. Burnt. Creamy. Bitter (Brix:11.2. pH: 6.4)

South Asia Coffee Base: Robusta direction Profile: Creamy. Milky. Roasted. Sweet. (Brix: 12.5. pH: 6.4)

Tea Drinks Trend 2004

Flavoured Tea Drinks

Ice Green Tea
Citrus Light Berries Tropical Blends

Green Tea

Jasmine Tea Super Green Tea

Catechin

Ice Tea Black Tea Milk Tea

Citrus Milk

Berries Spices

Tropical Honey

Blends

TREND UPDATE 2011+ DIFFERENTIATION

GLE N I S IT U R F

NATURE`S PURISM
Degree of Sophistication Seasons Seasons Best Best Local Taste Local Taste Trust Trust Minimalism Minimalism

Coconut

LUS P IT U R F
Yuzu Orange + Apple Lemon

Yuzu + Honey

Acerola

Lemon + Tea

Super Fruit Mix (Blueberry, Cranberry, Raspberry, Pomegranate)

42

TREND UPDATE 2011+ DIFFERENTIATION US

PREMIUM INDULGENCE
Degree Degree of of Sophistication Sophistication Artisan Tickling Artisan Tickling Upgrade Upgrade Taste Taste Precious Precious Degree of Sophistication Botanicals Botanicals

IT P U FR

Peach Melba (peach + raspberry + vanilla)

Strawberry Chocolate

Strawberry + Milk/Yogurt

LE G SIN

IT U R F
Strawberry

Tropical Indulgence ( mango + passionfruit)

Mango

Apple Pie (apple + cinnamon + brown sugar)

Passionfruit

Melon from Hokkaido

43

TREND UPDATE 2011+ DIFFERENTIATION US

EMOTIONAL DISCOVERIES
Degree Degree of of Sophistication Sophistication

IT P U FR

Lemon peel + Black pepper + Clove

Mojito (mint, lime, tequila)

Retro Origin

Cosmopolitan Thirst

Hidden Treasures

Apple + Soda

LE G SIN

IT U R F
Lychee Carrot + Orange + Apple

Degree of Sophistication

Pink Guava

44

TREND UPDATE 2011+ DIFFERENTIATION

LE G SIN IT U R F
tongue

influence on signal processing/ coding influencing neurotransmitters

SMART BENEFIT
Degree of Sophistication Mental Mental PerforPerformance mance Hyper Natural Hyper Natural Power Hydration Power Hydration

Orange
taste papillae
ATP release
Na + H+

TRPM5

modulators

Lemon

taste buds

Ca 2+ stores ? IP 3 R3 Ca 2+ +

depolarization = signal

IP 3

DAG

Grapefruit

molecular scavengers complexation / transport inhibitors

PLC 2

-gus tduc in

OH HO HO O O OH

OH

e.g. hT2R16

IT U R F
TAS2R binding site agonists/antagonists receptor molulators

S U L P
Bitter Orange + Guarana

Lemon/Lime + Cola
45

FLAVOUR TRENDS
FUTURE INNOVATION IN BEVERAGE FLAVOUR RED FRUIT CITRUS TROPICAL

TRADITIONAL; Citrus, Strawberry, Apple, Grape

Berries;Superfruits; cranberry, Gooseberry, Goji, Pomegranate, Acai More variety; Blood Orange, Valencia, Honey Tangerine, Pink Grapefruit, Calamansi, Lime, Lemon-lime Coconut, Mangosteen, Mango, Pineapple, Passion fruit, Lemongrass, Rosella

More mixed and complicated flavours

SENSATES, FLAVOR REPLACEMENT AND FLAVOR ENHANCEMENT

TASTE CHALLENGES
Low carbohydrates anti-obesity products Low sodium heart health, blood pressure Soy products cholesterol lowering, bone health Fibers gut health, low glycaemic index Proteins, peptides blood pressure lowering, fitness Polyphenols antioxidants / cancer Fortification vitamins, minerals, omega-3 Low trans fat/omega-3 acids healthier fat high intensity sweeteners show bitter off-tastes substitutes like KCl show strong (bitter) off-tastes beany off-flavor, bitterness, astringency sometimes off-flavors, flavor retention bitter and/or astringent taste, flavor retention off-tastes: bitterness, astringency/color problems metallic off-taste, astringency, altered taste rancid or fishy off-flavors

MASKING SOLUTIONS

Low fat anti-obesity products

off-flavors, reduced mouth feel, astringency

Enzyme & Reaction Technology Flavour Technology Controlled Flavor Release

Creation Innovations

Formula & Raw Material Management

New Molecules Regulatory Flavour Analysis Food Science & Nutrition

SYMRISE DEVELOPMENT

FLAVOR MODIFICATION
OH HO O O O OH OH O OH O OH O

SWEETNESS ENHANCEM.

UMAMI ENHANCEM. Protein hydrolysates

OH NH N H O NH2

HO O HO

Neohesperidin

O N O N N N

FLAVOR MODIFICATION

Caffein

H-L-Leu-L-Trp-OH

OFF-NOTE MASKING

CREAM/FAT ENHANCEM.

OH OH OH O O HO O OH OH OH OH

OH

cis-Isohumolone

Epigallocatechin gallate

Consumers are demanding healthier options, but they wont compromise on taste, and neither will we.
lighten up
Creating full-flavored, . irresistible foods that are lower in sugar, salt and fat

be natural
The widest range of natural flavors, for authentic natural tastes and clean labels

get active
For functional foods, masking isnt just hiding tastes. It also means standing out with vital new flavors

Mouth feel > Sweetness solutions > SymLife taste boosters

>

>INSIGHT

Natural flavour options > Reaction flavors > Extracts & Distillates > Fruit, veg, herbs, spices &meat >INNOVATION >Clean label solutions
>

Masking agents > Encapsulation and stabilization > Screening for added functionality
>

Food Pairing