Trends Shaping Drinks (Part II of III):
The Lifestyle of Health and Sustainability

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. In Part II, we highlight the LoHaS trend – Lifestyle of Health and Sustainability. Some successful market launches are also introduced here.

How to identify the Lifestyle of Health and Sustainability
There are various indicators that show how society is changing the direction of the “Lifestyle of Health and Sustainability”.

The second health market is growing

Private expenditure on health in Germany in billions of euros

Between 2003 and 2007 private expenditure on health in Germany grew from EUR 49 to EUR 60 billion, which corresponds to an average annual increase of five percent. A further increase to EUR 75 billion by 2020 is expected, which would mean an annual increase of two percent for private expenditure on health.

From the health food store to the supermarket

The development of the organic food market in Germany, 2000–07

Food is the leading market in the organic segment. The turnover from organic foods has been growing by double-digit figures since 2000: In the period between 2000 and 2007 the average annual growth rate was 14 percent, whereas during the comparable time period overall food turnover rose by only 3.4 percent. The background of this development is a shift of organic products into the large sales areas of the discounters.

Environmental activism gains ground

Worldwide surveys of more than 25,000 interviewees in 25 countries demonstrate that there is a massive interest in the health of our planet. A total of 77 percent of the people interviewed by GfK Roper Consulting considered it important to make an active contribution to environmental protection, and more than a quarter of them (27 percent) said this issue was “especially important”.

I would like to help and do my part to protect the environment and conserve the natural world

Trend Winner “Relaxing Drinks”

Times of crisis are times when people quieten down to reflect on what’s really important to them — and take an “anti-energy drink”. A Canadian product known as “Slow Cow” is, according to its own advertising, a kind of acupuncture session in a bottle. Natural relaxants such as camomile and valerian relieve stress and, by contrast, the anine combines this relaxation with mental alertness. A lazy cow on the label, which serves as an ironic commentary on the aggressive Red Bull, clearly expresses this message. It’s a trend winner with a wink and a smile.

Trend Winner “Spiritual Drinks”

The Indian drink Zrii is made from a rejuvenating superfruit called amalaki, which grows in the Himalayas and is handpicked there. The advertising for Zrii emphasises its 5,000-year-old Ayurvedic tradition. The drink has even received the “seal of approval” of the Chopra Centre for Wellbeing.

Trend Winner “Organic Drinks”

The success of Bionade as a market pioneer in the area of organic soft drinks has attracted competitors — and its competitor claims that its products are even better than the original. It adds no sugar or artificial acid regulators; instead it uses certified organic aromas derived from the organic fruits for which they are named.

Trend Winner “Drinks for a Better World”

When a customer buys the energy drink Live, 50 percent of the proceeds go to a good cause. Depending on the flavour chosen, the consumer is thus donating to initiatives focusing on different areas: youth work, cancer, HIV or global warming. For example, purchasing a can of Live with green tea flavour results in a donation to the non-profit organisation Global Green USA, which supports various projects including “Rebuilding New Orleans”.

The consumption profile of the LoHaS

Health is THE key to the LoHaS markets. On the one hand, Lo- HaS consume according to ethical standards. In other words, these consumers don’t ask what they can afford but what they want to. On the other hand, LoHaS also have completely normal needs resulting from their surroundings, and that’s why taste, convenience and price also play a significant role for them. But in contrast to consumers whose primary interest is the environment, LoHaS respond to creative elements such as wit, irony and good design.

Trend Winner “Green Design”

A standout feature from WB&Co is a stylish and reusable designer bottle. Of course the contents are also quite special: fresh cold-pressed vegetable juice that is 100 percent organic, natural and pure and has up to 40 percent more vitamins, as organic vegetables contain less water than their conventionally raised counterparts.

Trend Winner “Green Charm”

French Kiss is an organic wine from France with a love story in every bottle — the connection is obvious. This declaration of love from France is available from the Weinimport Peter Riegel.

The new anatomy of a target group

The 20th century created a highly individualized society with a broad range of lifestyles. This development was also expressed in the markets, and niche products boomed. The new millennium has brought us the “multigraphy”, which might include overlapping life phases (e.g. children and career), sudden interruptions (e.g. unemployment) or repetitive loops (e.g. a new marriage). In the future, biographies with many twists and turns will bring high volatility to consumer habits. Innovations are the result of a greatly heightened sensitivity to consumers’ living situations. The chilled pure juices called smoothies are a response to the health and convenience trends, and that’s ultimately the basis of their success. Almost two dozens producers are competing today in the small market for smoothies. The explosive growth of the start-up phase has now levelled off. However, the market growth of almost 30 percent in 2008 still remains an impressive figure.

Smoothies are also an instructive model for a new concept of target groups. Independently of their age, all the people who buy smoothies tend to work very hard and have little time to spare and live and work in cities. The next stage of innovation for smoothies involves linking convenience with highly individualised solutions. The particularly inventive suppliers are those who are connecting even more closely with the consumers’ life situations.

Smoothies designed especially for children stand out through their design and package size or the “Three Musketeers for Health”. Vitabio Smoothies focus precisely on the mind-set of the LoHaS. More specifically, they insist on the use of organic fruits from fair trade networks. Vitabio has been available in German retail outlets and restaurants since April 2008.

The “target group” of ththe future is unclear and temporary

When values become rules

The triumphant progress of health and sustainability has not been limited to a trend toward more organic products. It has also meant an increase of regulations in all areas related to eating and drinking. The spectrum ranges from labelling and the disclosure of ingredients to the seamless traceability of a food product’s origins and “transparent” production processes.

Trend Winner “Transparency”

The pressure to make food products traceable raises the question of how to communicate all the information that consumers want to have. The Internet can provide valuable assistance in this regard. Labels such as Dole Organic combine the online and off-line worlds. Every banana bearing this label is marked with an individual product code. If the consumer types this code in on the web site, information about the farm that produced this product is displayed.

Regulation on the increase

For producers, more regulation means that transparency is essential to success. The standards for product information are more stringent than they used to be. Food safety is mandatory, but seamless transparency is essential for gaining customers’ trust.

Main Drivers of Further Development in the Food and Beverage Industry (excerpts)

Are today’s drinkers of bottled water tomorrow’s smokers?

For NGOs such as the WWF and Brot für die Welt, bottled water is bad for three reasons: it generates too much carbon dioxide, pollutes the environment and wastes money. In other countries both nearby and around the world, city governments that are especially environmentally oriented, have all already started to ban mineral water. In city government buildings in Liverpool, Göteborg, New York and San Francisco, the only drinking water available is tap water. “If you’re drinking bottled mineral water, you’ll have to stand outside, together with the smokers,” writes the author of an article in the Geo issue titled “Green Consciousness”.

The “Tapit” (derived from “tap water”) initiative founded in New York in 2008 aims to reduce the waste generated by discarded PET bottles. “Tapit” is a network of cafés, restaurants and shops that have declared their willingness to fill the water bottles of passersby with tap water for free. This results in new customer contacts for the shop and restaurant owners and more convenience for the passersby. Information about the network can now even be received via an iPhone app.

Trend Insights

When the water tap at home is seen as an alternative to bottled water, the only way for bottled water producers to develop is through their products’ additional benefits: more taste, more health, more beauty, more “cool”. And in areas where the global players in the bottled water business are coming under pressure, exciting market opportunities are opening up for regional suppliers who can impress customers with their local image and thus a smaller carbon footprint.

Shopping is Voting

The extent to which moral values have changed the public’s sense of responsibility and its styles of living and consuming can be seen in consumers’ attitudes toward fair trade products. Fair trade is a success story that has evolved into a global consumer trend.

Trend Winner “Fair Trade”

LemonAid promises a “liquid revolution” with its message that drinking this product will help the people who produced it. LemonAid is organic lemonade from a fair trade network that tastes like homemade lemonade. It consists of fresh pure limejuice, cane sugar, water and a touch of mint

Healthy eating via “more” and “less”

In a society that’s aging but becoming increasingly fit, health is a precious good and a crisis resistant market. Today many consumer decisions, from salt to summer vacation and from house building to kitchen appliances, are made with an eye to the consumer’s physical wellbeing. This can be felt in all segments of the beverage market in two ways. On the one hand, we can see a kind of “culture of reduction” that looks for lower alcohol content or none at all, less sugar or none at all, and no food additives. On the other hand, there’s also an “add-on strategy” that looks for health-oriented added value through the addition of fruits or herbs, enrichment with functional ingredients such as the wine grape antioxidants in First Blush, an extra dose of vitamins or additional oxygen as in Active O2. And because water-soluble vitamins gradually lose their effectiveness, products such as the drinks from Activate have a patented bottle cap that ensures that the vitamins are added to the beverage just before it’s consumed.

Consuming with a clear conscience

Consumer attitudes toward fair trade products in Germany

Trend Winner “Drink plus Beauty”

Glowelle from Nestlé is a line of nutricosmetics — foods that are also beauty care products. They claim to counteract the aging process of the skin through antioxidants, plant ingredients and fruit extracts. For modern “business nomads”, the drink is also available as a water-soluble powder that can be used when you’re on the go.

Trend Winner “Drink plus Toy”

Ywater is a vitamin-enriched water for children that claims to enhance mental performance, muscles, bones or the immune system, depending on the type of water that is selected. The empty water containers can be used as building blocks to play with or sent back to the producer for recycling.

Trend Winner “Drink plus Coolness”

Metromint is a water product that offers a cooling effect thanks to various mint aromas. The “chill factor” of each variant is measured with the special thermometer. The drink contains no additives or calories and is therefore very popular in the US, especially with figure-conscious women customers.

The Zukunftsinstitut was founded in 1998 by journalist and publicist Matthias
Horx. His vision was to create a Think Tank to further develop prognostic
techniques whose resulting knowledge and potential could be used both in the field of business and politics.

Zukunftsinstitut GmbH today sees itself as a platform for future themes and knowledge in the widest sense. The main emphasis is on German-speaking countries, but it sees as Europeans with a global outlook.

Part II, detailing the second key trend of “Ethical Business”, will be published in the April-May 2010 issue.