by Matt Fisher – Oct 20 2014
Much has been made about consumers shifting away from traditional carbonated soft drinks (CSDs) in North America. Concerns about obesity, sugar content and safety of artificial sweeteners have all contributed to consumers seeking alternative options. In response, the largest beverage brands have launched new products like Coke Life and Pepsi True.
Based on our just completed research, the Social Value Index (SVI) for ready to drink (RTD) beverages, these launches are a step in the right direction but don’t likely go far enough.
We looked at RTD beverages expansively, including other options such as juices, teas, flavored and bottled waters. Additionally, we focused well beyond traditional benefits and closely tracked social benefits such as healthy living, environmental progress, community improvement and ethics.
In what is becoming increasingly common across our SVI studies, the role of social benefits is much greater than previously expected. For example, in RTD beverages, social benefits drive 36% of consumer purchase behavior. Even more, the most important social benefits such as having fresh, healthy and natural ingredients were as influential as traditional benefits such as taste and price. With that in mind, it’s not surprising that CSDs were the worst performing beverage type.
So rather than focus on relatively minor changes to traditional formulas, we believe that CSDs must provide truly different options that deliver more fully on fresh, healthy and natural – brands like Pepsi’s Izze with 70% pure fruit juice or Spindrift which uses fresh squeezed fruit or berry purées. Consumer demand in the CSD category is changing. To win, all brands will need to take note of this shift.