Trends Shaping Drinks

Matthias Horx, Jeanette Huber, Dr Bettina Reglin

The three key trends for the beverage markets of tomorrow, presented by the Zukunfts Institut at Anuga on October 11, 2009 in Cologne, Germany.

Glocalization

In addition to strengthening regional economic cycles, this trend promotes a renaissance of values such as familiarity, authenticity and a love of one’s home region. However, in the 21st century the term “home” no longer connotes nostalgia for the past or a longing for an endless repetition of the “good old days”. Nowadays familiar elements are combined with exciting, unknown and surprising ones to create a “cultural remix” that enriches familiar things with global inspirations in an exciting way.

LoHaS — Lifestyle of Health and Sustainability

In the coming years there will be a shift in the regulations and consumer preferences on the consumer markets. Consumers will find themselves caught between appetite-driven impulses to buy in the “here and now” and the simultaneous question of what consequences a tasty purchase today will have on the future climate. The markets of sensible, responsible and ethical consumption are developing from this situation.

Ethical Business

The global economic crisis has thrown the target coordinates of business into question. We can no longer regard success and progress only through the tunnel vision of maximising profits, and the one-dimensional logic of Thomas Friedman’s dictum “The business of business is business” no longer gets us very far. Today companies are expected to maintain a balance between the elements “people — profit — planet”. Profits must be compatible with the well being of humanity and our global habitat.

The Key Trend Glocalization

The globalisation process of the 1990s created the biggest worldwide economic boom of all time. Thomas Friedman summed up this development in his best seller The World Is Flat. Today, the global economic and climate crisis is leading to a restructuring of the global economy and the global scale of values. The decreasing gap between incomes in the industrialised countries and the emerging markets, as well as increasing raw materials prices and transport costs are making the world round once again — and locality is celebrating a comeback.

Even the loudest “Yes, we can!” can’t hide the fact that we are drifting into a multi-polar world. The traditional centres of power, the US and Europe, are getting some competition, and the new middle classes in the emerging economies are creating gigantic markets with unusual demands. As a result, both the economic and also the cultural hegemony of the West are being replaced by a fusion culture that spans the globe. And that’s exactly what the term “glocalization” means. It refers to the fact that the world is growing together, as well as the strengthening of regional economic cycles and thus a renaissance of values such as familiarity, authenticity and a love of one’s home region.

This renaissance of local values is symbiotically related to the megatrend of health. That’s because an increasingly popular health-oriented lifestyle and the strengthening of regional food brands and distribution channels are mutually influencing and enriching each other.

The region is the winner

What regional thinking regarding food means in %

Consumers primarily associate regional food with the qualities “healthy” and “environmentally friendly”. In addition, there’s also a political and economic dimension, because buying regional food also strengthens Germany as a business location.

How to identify the key trend of glocalization

One important indicator of glocalization is the number and increase of local brands. There are over 80 regional marketing programmes for food in Germany alone. “Gutes aus der Nähe” (Good things from nearby) has become a successful overarching brand. In a time of food scandals and skepticism regarding globalization, regional thinking has crystallised to become an impressive unique selling point. In view of REPORTthe shortages in the procurement market, the motto in the growing organic food segment is also “The new organic is local”.

Even if sourcing from the local region necessarily mean slower unit numbers, it is becoming a successful strategy for smaller and mid-sized suppliers in particular. But “glocalization” also refers to the cultural remix — the combination of familiar things with ones that are exciting, unknown and surprising. Just as in “East meets West” fusion cooking, Swabian-Hall pork is combined with soy and sesame seeds, wheat beer and cactus figs or lassi (the Indian yoghurt drink) are combined with strawberries and raspberries.

Trend Winner “Global Inspiration”

The Bitburger brewery offers various exotic flavours in its “Bit world” product line. For example, “Bit Copa” offers a Brazilian, “Bit Cola libre” a Cuban and “Bit Passion” a Caribbean taste experience: www.bit-world.de. Schöfferhofer mixes its wheat beer with grapefruit or cactus figs and promises the consumer perfect combinations of flavours: www.schöfferhofer.de.

Trend Winner “Home Region”

Tannenzäpfle, the cult beer brand from Baden, is popular among people in the know: www.rothaus.de. In Austria people are drinking Mundl, the beer from the popular TV series “Echte Wiener — die Sackbauer Saga”. Just in time for the premiere of the movie, Mundl beer from the Egger brewery became available in the Austrian target markets. And of course there are also videos on YouTube and at www.mundl.net.

Private brewery Dinkelacker-Schwaben Bräu brought the oldest beer brand in Stuttgart, Wulle, back into the market in 2008, after a defunctness of more than 37 years.T he producer has announced that it will procure all of its raw materials from Baden-Württemberg: www.wulle-bier.de.

Härle beer is positioning itself as a “hard-core localist”, because it’s available only in a 50-kilometre radius around the Härle brewery in Leutkirch: www.haerle.de.

Trend Winner “Health”

“Stampede Light+” is a light beer from the US that courts customers with an extra dose of health: Since alcohol removes vitamins from the body, this beer is enriched with additional vitamins:www.stampedebeer.com.

Differentiation between beer brands has increased

Brand Parity Ranking 2009 vs. 2004

Basis: n=1,034, Germany as a whole
Source: February 2009 / BBDP Consulting – Brand Parity Study 2009

The glocalization potential of German beer

Expected development of sales according to sales regions for the years 2007 to 2012

Beer — The Glocalization Drink

In Germany, brand awareness regarding beer is developing positively. The Brand Parity Index graphic on the left shows that breweries have achieved relatively strong differentiation between beer brands since 2004. Today only 54% of the people surveyed believe that the beer brands are not particularly different — i.e. 46% of Germans have a clear brand awareness regarding beer. This is due to positioningthe following development: The number of people surveyed who did not have brand awareness has fallen significantly by seven percentage points from 61% to 54% since 2004. Conversely, the percentage of people surveyed who have brand awareness has risen from 39% to 46%. There are about 800 local breweries in Germany producing a total of 5,000 brands and types of beer, according to the April 2009 issue of the food magazine Lebensmittelzeitung.

German beer enjoys international renown, and that — together with a high degree of brand awareness — is the best prerequisite for market expansion. This is emphasised by the graphic on the left, which shows a positive prognosis regarding the development of beer exports until 2012. In other words, German beer has tremendous potential for glocalization.

Facets of “glocal” positioning

“Glocal positioning” implies local sourcing, i.e. procurement and production within the region. The product itself has regional associations, whether it’s through the recipe or other associations with the home region. At the POS the message of “authentic producers” is conveyed, and communication concerning the product makes “point of origin” and “rootedness” into quality characteristics. Nonetheless, the product is marketed beyond the local region.

Trend Insights

Glocalization also provides momentum for expanding the sales market. A critical success factor is the need to adjust the entire value chain along the lines of glocalization, because that’s the only way to achieve credibility.
Source: Zukunftsinstitut 2009

In the 21st century the term “home” no longer connotes nostalgia for the past or a longing for an endless repetition of the “good old days”. Instead, nostalgia for one’s home region is staged as an ironic game, for example through a stag’s head made of plush from a designer boutique (seen at Rove. design, www.rove.de). Another example is the Tannenzäpfle logo with the old-fashioned girl from the Black Forest on the bottle label. The success story of the Tannenzäpfle beer brand from Baden-Württemberg started back in the beginning of the 21st century when this local brand suddenly turned up in the popular bars of Hamburg and Berlin. Today it’s available in 120 bars in major cities.

The Internet as a medium of glocalization

The Internet, which many people denounce as the outgrowth of an ice-cold, thoroughly globalised and alienated communication process, is gradually becoming a local medium. Those who assume that the Internet limits or damages regional communication and business processes are underestimating its potential. One quarter of all Google searches are related to the searcher’s local environment.

Trend Insights

The reason why the Internet is such a key lever in the communication and distribution of glocal products is that it offers several advantages: It makes it possible to address users in an extremely individual way while at the same time playing the “community card”; it’s independent of specific locations and therefore enables a whole spectrum of approaches, ranging from narrowly limited local campaigns to global communication; and it evens out differences in size, which makes it an outstanding springboard for small and midsized suppliers.

Source: Zukunftsinstitut 2009
Part II, detailing the second key trend, LoHaS — Lifestyle of Health and Sustainability, will be published in the February-March 2010 issue.