Building a Better Children’s Beverage

September 2019

This report explores the changing demographics and consumer preferences behind the poor performance of mainstream children’s soft drinks brands and categories globally, introducing the changes that will be needed to build better, more successful children’s beverages to meet the needs of future parents.

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Key Findings

Children’s beverage categories are in a state of terminal decline

Traditional children’s packaged beverage options - meaning low fruit content juice drinks, sugar-sweetened flavoured dairy and concentrates - face long-term decline in both emerging and developed regions. A combination of demographic change and new nutrition priorities is changing the operating environment for the largest global children’s brands.

Global parents are resetting the family beverage routine

The same pattern of sugar reduction that has reshaped non-alcoholic drinks for the past decade is shaping the decisions of millennial parents. Yet in addition to a demand for lower sugar products, recent survey research suggests parent-consumers are even more likely than non-parents to prioritise natural and organic ingredients when selecting food and beverages for the home.

Sugar cannot be the price of nutrition in children’s food and beverage formulation

The days of vitamin C, calcium, protein and potassium from dairy and juice drinks being necessarily packaged with a day’s worth of recommended sugar intake (whether added or naturally occurring) are over. Producers must accelerate innovation in packaged water, smaller package formats of juice and dairy, lower sugar fruits and vegetable blends and clean, plant-based sweetener alternatives.

Can portability and licensing build up the children’s bottled water category?

Bottled water is the largest source of per capita volume growth in packaged drinks, but remains largely underdeveloped in the children’s space. Perhaps the most urgent challenge for producers is using low or zero calorie flavour innovation, pack design, licensing appeal and other strategies to build water brands that can appeal to both the health needs of parents and tastes of younger consumers.

Introduction

Scope (1)
Scope (2)
What is this briefing about? balancing price, nutrition and sugar
Key findings

The Problem: Declining Categories and Stagnant Brands

The largest categories for children’s beverages are all in global decline
Long-term weakness in dairy, juice and concentrates cuts across regions
Largest children’s beverage brands are Minute Maid and Tropicana…
…but all of the major brands in the space are struggling for relevance

Where Did the Category Go Wrong?

Three connected reasons for the poor performance of children’s drinks
The consumer household by 2024: fewer children, smaller families
More dual-incomes and urban households, particularly in the MEA
It’s not just sugar; the price pyramid of children’s drinks shapes demand
Evaluating value in the children’s beverage aisle is a struggle
Powdered concentrates under pressure, despite affordability
Income growth shapes RTD fruit juice options available to parents
Sugar reduction is universally important for all consumer types
Which categories contribute the most to dietary intake of sugar?
Parents are convinced that it is better for children to avoid sugar
1. Creating more value for millennial parents
Focusing on affordability through small formats in low-income markets
Older, smarter, more affluent parents prioritising nutrition
New brands create an even more premium tier of children’s juice
Organic certified brands have had success in appealing to parents
Localisation and traditional ingredients propel premium brands in India
2. Making children’s drinks more than just refreshment
What qualifies as a children’s beverage in 2019? (1)
Making packaged water and hydration appealing to younger consumers
Using both packaging and ingredient factors to build children’s waters
Licensing opportunities and fun convenient packaging for children’s waters
Promoting plant-based and low-calorie hydration drinks for kids
Creating new occasions for children’s beverages in the home
Picky eating habits and unhealthy menus outside the home are barriers
Emerging market parents concerned with food quality in schools
3. Reducing sugar and preserving nutrition
Across regions, a majority of parents believe it is better to avoid sugar…
…but in Asia, sugar reduction through artificial sweeteners is working
Natural ingredients and nutrition can be even more important than sugar
Local sourcing and natural ingredient claims are vital in juice and dairy
Eckes : natural methods of sugar reduction with alternative fruits
Parents also more likely to prioritise vitamins and natural ingredients…
…and parents only buy from companies that they trust completely
To sustain trust, ingredient safety and transparency cannot be overlooked
As more parents avoid dairy, fortification of plant milks will be vital
Creating new, natural children’s beverages for supplemental nutrition
Promoting digestive health is also a growing priority for parents
Could the tonic format be used to create wellness shots for children?
Smaller portions in fruit juice and innovation in ‘wellness shot’ formats
The future of children’s beverages: four strategies for suppliers
Keys to the future of children’s drinks: four closing thoughts

Appendix

About Via Pricing from Euromonitor International
About Euromonitor International’s Health and Nutrition Survey

Soft Drinks

This is the aggregation of the following categories; Carbonates, Fruit/vegetable juice, Bottled water, Functional drinks, Concentrates, RTD tea, RTD coffee and Asian speciality drinks.

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