Functional beverages in the hot drinks sector are rejuvenating a crowded market

New hot drink creations target specific areas of concern for busy consumers. Photo courtesy of Peter Bernik

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According to research from Canadean, the hot drinks market is set to increase by 15% in value and 22% in volume across 50 countries between 2014 and 19, creating ample opportunity for manufacturers to create innovative and exciting products to broaden their appeal to a wider range of consumers. While the need for relaxation drives the market globally as consumers turn to hot drinks to accompany their moments of escapism, the abundance of products on shelves has led to shoppers become fatigued with choice, and looking for something new and different.

In order to retain current customers and appeal to new ones, hot drinks manufacturers can take inspiration from other categories such as ready-to-drink products – a sector which has seen a number of developments in ingredients, taste and functional benefits – and create products that are tailored to the needs of today’s busy consumers. Exciting innovations in the hot drinks sector, which feature ingredients that target key consumer concerns, such as weight, beauty and health, are enhancing the appeal of hot drinks, while also maximising taste sensations and providing consumers with new experiences.

Soup-style drinks tap into snacking occasions

The impact of time-scarcity when it comes to hot beverage consumption is wide-ranging. As meal times become shorter and more fragmented, consumers often turn to drinks as a means of snacking. Some 19% of global consumers say that they often have to skip a meal, but opt for a soft drink to help them keep going or reduce their hunger levels.

This gap in the market presents clear potential for hot ‘snack-beverages’. Soup-style drinks are well placed to fill this gap, due to the perception of soup ingredients being ‘better for you’, as well as being rich in fibre and proteins – ensuring longer satiety – and lower in sugars than fruit drinks.

Healthy vegetable and broth drinks might be considered bland and boring by some. However, nutritious soup-style drinks have a ‘good for you’ halo that manufacturers can capitalise on, targeting consumers with convenient on-the-go snacking solutions.

To appeal to an increasingly health-conscious young-adult market, manufacturers need to ensure the drink features new, exciting flavours, as experience seeking is a key trend among young adults. Bold, spicy flavours add an edge to soup-style drinks, making them more fun and trendy. Fashionable ingredients, such as kale, spinach, exotic vegetables and herbs will make the product more popular among young adults. Those ingredients are often richer in nutrients, such as protein, responsible for satiety and slower energy release. Indications of ‘good-for-you’ nutrients, such as fibre, protein, and vitamins will enhance this perception further.

To differentiate new products from existing ready-to-eat soups, manufacturers should highlight the convenience of the products, emphasising minimal preparation and easiness of consumption, as well as well as the ability to consume on-the-go, requiring only a microwave, hot water, or a self-heating can.  

Snacking drinks cater to functional and nutritional needs

Young adults are snacking a lot more than the generations before them, due to busy schedules and a lack of time or desire to cook proper sit-down meals. According to Canadean, 43% of global consumers say they often do not have as much time as they would like to spend on preparing meals and cooking food and 28% of consumers admitted to skipping meals, choosing to drink soft drinks instead for an energy boost.

For young adults, snacking has become ever more sophisticated and decadent, providing relaxation during busy days. Hot drink manufacturers who want to tap into the snack-drink category can take tap into this trend by positioning their products as being more than just fit for purpose and also providing premium taste experience.

One avenue manufacturers can take is to target the space between drinks and meal occasions, by developing beverages which bridge this gap, such as hot drinks with oats for breakfast occasions. One example in this category is the Glorious Blend Coffee Mix with Brown Rice developed by Glorious Industrial & Development Corporation, which serves as an on-the-go healthy breakfast choice for Filipino consumers. The drink combines several healthy staples from local cuisine: malunggay, stevia and rice, which has been used traditionally in the Philippines in the form of a healthy drink that can relieve digestive pain.

To effectively target snacking occasions, hot beverage manufacturers need to ensure the product features ingredients that satisfy hunger cravings, such as fibre-rich grains or high protein nuts or milk. Protein claims have recently gained popularity in the fast moving consumer goods market, due as consumers consider them a healthier option. Similarly, using nuts can increase the perception of functional benefits in the end product, including high protein levels, calcium and vitamin B, nutritional properties, such as delayed hunger, as well as adding a twist to the taste and the texture of the drink.

A number of grains, including ‘superfoods’ such as quinoa, also present an opportunity for brands to experiment with unique tastes, textures and functional benefits that can increase the appeal of on-the-go hot drinks. However, to keep in line with the indulgent appeal of snack foods and hot drinks, manufacturers should focus on highlighting the indulgent attributes of healthy ingredients, such as ‘crunchy’, or ‘grainy texture’, leaving claims such as ‘keeps you full for longer’ as a secondary point.

Demand for beauty-enhancing drinks grows

Research from Canadean has found that consumers feel under constant pressure to look good and conform to a certain image, with 63% of consumers globally believing that better looking people have better opportunities in life – both personally and professionally.

While some consumers are sceptical of beauty-enhancing beverages, according to Canadean, the interest of over a third (34%) of global consumers in beverages with image-enhancing properties will drive the demand for appearance-improving hot drinks. The variety of ingredients associated with improving the physical image, as well as growing awareness of connection between health and beauty, offers ample room for product development catering to this demand.  

In addition to traditional ingredients associated with beauty, using novel ingredients that are unusual for hot drinks, such as superfoods rich in vitamins, minerals, antioxidants, and proteins that provide consumers with multiple benefits, will increase the product’s appeal. For example, Acai and Goji berries are rich in vitamin C and antioxidants, which are associated with counteracting free radicals that damage skin cells; flaxseed is rich in omega 3, which is crucial for skin health; almonds are packed with nutrients such as biotin and vitamin E, which are important for hair health and beauty.

Additionally, enriching regular day-to-day hot drinks such as tea, coffee and cocoa with ingredients consumers strongly associate with the beauty industry, such as collagen, coenzyme Q10 and Aloe Vera, will strengthen the consumer perception of beauty-enhancing benefits and can help products to stand out from other hot beverages. Sappe in Thailand, for instance, has taken this approach with the launch of its Preaw Coffee Instant Coffee, which combines collagen and French pine bark in an on-the-go instant coffee drink.

Brain health drinks gain popularity

The trend for beverages which target cognitive health is growing as consumers look to improve their concentration and brain function. Canadean’s research found that 37% of consumers globally are interested in beverages that support brain development, presenting a new opportunity for hot drink development.

Interest in brain health varies across age groups. Parents of the youngest consumers seek products promoting cognitive development, young adults are on the lookout for products to boost mental sharpness, while the older generation is looking for products that maintain a healthy brain and prevent cognitive decline.

When it comes to children’s cognitive health, it is important for manufacturers to ensure the products promote a holistic approach, such as being free from caffeine or excessive sugars, to avoid being seen as unhealthy. At 29%, consumers aged 55 and over are the age group that is the least interested in brain health drinks; however, aging populations will re-shape demand as the proportion of consumers concerned about certain issues linked with the age, such as maintaining mental sharpness and memory, will grow. Manufacturers need to be careful in how they target the older generation to ensure they develop inclusive products rather than positioning older consumers as fragile.

Fortifying beverages with docosahexaenoic acid (DHA) is a popular solution for brands promoting brain activity, due to the strong link between DHA and cognitive health. This presents opportunities for manufacturers to co-brand products with established DHA-enriched dairy brands. Other ingredients considered to be invigorating, such as ginseng and guarana, are also becoming increasingly popular in hot drinks. In addition, manufacturers are using ingredients such as nuts, seeds and whole grains to capitalise on their high content of DHA and vitamin B.

In the EU, in addition to DHA, brain-health approved ingredients include biotin, iron, magnesium, niacin, panthotenic acid, thiamine, vitamin B12, calcium, vitamin B6, vitamin C and zinc. Working with ingredients providing a proven benefit can help manufacturers develop new ideas for drinks formulations while also ensuring they develop products that live up to their health claims.

To read the full report, Hot Drinks: Identifying the latest trends for beverage manufacturers in the hot drinks industry, please click here.