Harry Ellis, Head of Grocery New Zealand for Frucor Suntory Oceania, revealed that the company had noticed a rapid acceleration in functional beverage popularity with consumers due to growing consciousness and concern over health and well-being.
Historically, functional beverages have not been a standalone category and were represented by energy drinks renowned for their boost and pick-me-up qualities. However, Ellis revealed that functional beverages are now defined more widely, alongside the fast evolution of the function of products and ingredients being demanded by consumers.
"Conscious consumption coupled with the ever-present health and wellness trend has led to major growth in functional beverages."
Ellis shared that energy drinks had been a functional category that catered for a lift in energy for consumers through guarana and caffeine. However, while this category maintains a critical role in the beverages industry, demand for low and no-sugar options is growing in demand.
This demand has promoted internal innovation, with Frucor Suntory's launch of its V Refresh being an example of this.
"We are immensely proud of the growth V Refresh has generated through offering low/no sugar energy drinks to a much wider audience."
Ellis revealed that there had been an uptake of fascination with health and wellness. This is supported by evidence from the Sports category, which led to a 27.8 percent growth as consumers transitioned to enhanced hydration when unwell.
Low to no-sugar options have been increasingly popular among consumers. This will likely propel innovation in products that target specific body parts in functionality, such as bones, joints, teeth, eyes, weight and cholesterol management, and more.
With the increased demand for functional productions, the FMCG (Fast-Moving Consumer Goods) industry has been placing significant interest in research and development teams, assessing global trends and unique ingredients offering various consumer benefits.
Ellis explained that consumer needs and tastes are consistently evolving, driving consistent innovation in the industry.
"V Refresh is a great example of a product developed based on consumer insights in the market."
Ellis revealed that the company had noticed a gap in the market for tasty, low to no-sugar options in Australia and New Zealand, which inspired the creation of the product.
V Refresh is a sugar-free energy drink that is also permissible, which makes it acceptable to consume in certain circumstances or situations, such as at work or during exercise.
Frucor Suntory's local research and development team have committed to searching for new ways to update the company's range of beverages, which can be seen through its recent launch of its BOSS Coffee in Mocha.
The main benefit of functional beverages is convenience. Ellis stated that functional beverages are available market-wide, meaning consumers have easy accessibility to functional drinks throughout the day.
With increased consumer interest in sustainability and well-being, the beverage industry must continue to innovate to maintain or gain success and remain relevant to consumers.
"From innovation in our packaging to reformulation, consumer's taste and preference will continue to evolve, and we take that as a positive step to challenge what products we bring to market and the formats we provide."
Ellis revealed that Frucor Suntory was working towards creating 100 percent recyclable packaging, aiming to hit this goal by 2030. Furthermore, the company aims to continue to bring new flavours for its V Energy and V Refresh ranges.
Challenges for the industry moving forward include the authenticity of product claims and the maintenance of quality standards. Eliss shared that despite consumer acceptance, there had been continued scepticism towards functional beverages. Secondly, Ellis shared that there was a risk of niche dominance, wherein businesses searching for the next innovation could interfere with critical thinking and analysis.
According to Ellis, each of these issues required trust through authenticity, high standards in the supply chain, and careful evaluation of new products to be combatted.
The Head of Grocery New Zealand stated that he hoped that there would be a continued focus on delivering high-quality, reputable products that deliver against clear insights, global trends, and evolving consumer needs.
