Product Innovation in Soft Drinks

Delivery

This report comes in PPT.

Key Findings

A disciplined and focused approach to innovation within soft drinks, with a close eye on ROI

The global soft drinks industry is unlikely to see an acceleration in the overall number of new products introduced over the next 12 months, as producers instead streamline portfolios and operations to control costs. With more limited marketing investment available, established beverage brands will primarily focus on safer bets - particularly bolder, flavour sub-brand launches, partnerships and flavour-based LTOs - supported by targeted (largely digital/social) marketing campaigns.

Balanced, incremental innovation - complementing the existing portfolio and long-term whitespace for consumer need states

Successful innovation within the drinks industry must prove to be genuinely incremental to existing beverage occasions and need states rather than investment that cannabilises existing products. Whitespace will include premium functional beverages beyond the established areas of energy, hydration and digestive health. Relaxation drinks and mood-enhancing adult soft drinks are two particularly promising areas of development. 

Low investment, high impact innovations yield outsize impact when amplified through social channels

Not all innovations within soft drinks need to re-invent the category. Brands can have an outsized impact with targeted flavour innovations, limited time offers (LTOs) and promotions that are amplified through social media channels. Evolving and refreshing brands through cost-effective seasonal flavours or creative packaging can still produce strong results, as evidenced by the strong performance of price premium energy drinks brands despite rising costs of living.