For Old Times’ Sake

Asia, particularly Japan, is often cited by industry observers as the forerunner in beverage innovation. New product developments have placed more emphasis on the use of natural ingredients, and being positioned towards health and wellness. Despite the new trend, the use of ingredients originates from traditional practices, as many of these beverage innovations are targeting either the youth or elderly segments. Whether it is a health or fun product positioning, new product launches usually relate to Asian traditions, core beliefs and values.

Local companies in the carbonated soft drinks category caught on the “zero” calorie trend set by Coke Zero. Calpis for example launched Zero Ginger Soda at the beginning of 2009. Along with lactic acid, ginger is seen to be one of the ingredients that is consumed widely by Asians.

Novelty beverages

Japan continues to be at the forefront of new product development as it has witnessed clever and unusual innovations in the past 12-18 months. Some products relate to childhood memories that evoke a sense of nostalgia or fun.

Coca-Cola Japan for example has launched a series of products under its Fanta brand. Early this year, Fanta’s Furu Furu Shaker was launched in 190ml two-piece metal can, which requires consumers to shake the can before opening. It contains jelly bits and the liquid has light carbonation.

In June, Fanta launched Momi Momi, a 10% juice drink product in 340ml PET bottle. The product requires freezing prior consumption and when frozen, it resembles a slushie drink. This beverage resembles a low cost version that was packaged in a flexible PE packaging and was popular with school children in the 1970s and 1980s.

Local companies in the carbonated soft drinks category caught on the “zero” calorie trend set by Coke Zero. Calpis launched Zero Ginger Soda at the beginning of 2009. Along with lactic acid, ginger is seen to be one of the ingredients that is consumed widely by Asians.

The spice is associated with “yang” or heat as believed by traditional Chinese medicine practitioners. Ginger is claimed to improve blood circulation and regulate body heat, thereby a popular ingredient during winter or when a person has a cold.

Japan has witnessed clever and unusual innovations in the past 12-18 months. Some products relate to childhood memories that evoke a sense of nostalgia or fun.

Hong Kong-style café

Hong Kong-style cafés have been an integral part of the local popular culture since the 1940s in Hong Kong. These traditional cafés often open early in the morning till late in the evening. More are operating at 24 hours.

Whilst the food and beverages offered at such eateries are often affordable and fast, many patrons would see the cafés as a retreat from the hectic urban lifestyle to relax, read, or interact with colleagues, friends and families.

Both hot and cold beverages are served at these outlets – from the classic “silk stocking” milk tea that contains various blends of black tea leaves and evaporated milk to create the smooth texture to tonic beverages such as hot Coca-Cola with fresh lemon or chilled Coca- Cola with salted preserved lemon. To this day, much of the beverages served in the Hong Kong-style cafés were invented by the employees. This popular culinary culture is gaining wide attention as similar cafés are seen mushrooming across mainland China and other parts of Asia such as Singapore and Taiwan.

In 2009, Starbucks collaborated with Goods of Desire (G.O.D) to open a café. G.O.D is a local design company specializing in traditional Hong Kong-designed theme furniture, household and fashion products.

The café features a nostalgic, retro-styled, Hong Kong café interior. It serves coffee and other types of food and beverage that are available at regular Starbucks outlets.

Over the last few years, Hong Kong’s Swire Coca-Cola has embraced the traditional culture by launching a series of Hi-C Café ready-todrink beverages. The products range from café-styled lemon tea to fruit punch and lychee-flavored drink.

Unilever had also attempted to adopt the popular Hong Kong café culture in its products by launching Lipton milk tea in Hong Kong in 2002. However, the product was not well received and was subsequently withdrawn from the market.

Unilever attempted to adopt the popular Hong Kong café culture in its products by launching Lipton milk tea in Hong Kong in 2002. The product was however not well received and was subsequently withdrawn from the market.

Health and wellness

In other parts of Asia, the health and wellness segment continues to grow as the industry innovates and promotes its products and services for a bigger market share. Much of the recent innovations feature the use of traditional Chinese herbal ingredients.

The drinking yogurt category in China for example has witnessed new product launches with red dates as an ingredient. Consumers and Chinese herbal specialists believe that red dates can help to strengthen the functions of the heart and lungs, nourish the stomach and help to maintain a stable blood pressure.

Shanghai Bright Dairy for example has launched a series of drinking and spoonable herbal yogurt that is claimed to help provide “cooling properties” or help to nourish the skin. The product was well received in east China.

In the Philippines, Nestle ventured into the wellness sector by launching a series of Nescafe Body Partner powdered coffee called Fit, Relax and Lingzhi. Fit contains a sugar substitute and Teavigo, an ingredient that aids weight management. Relax is a decaffeinated coffee with chamomile extracts that provide soothing properties and Lingzhi contains natural ganoderma extract that the Chinese believe to possess many health benefits. The products were promoted at Manila beach resorts in April and May this year with complimentary massages, hip-hop classes and sampling of Nescafe Body Partner products.

Conclusion

As consumers lead more demanding, hectic lifestyles and change their consumption preferences from time to time, marketers feel the need to create links between specific health and wellness needs such as eye health, skin health, gut health and heart health, and nostalgia or local culture to attract consumers’ attention.

As the latest innovation often becomes yesterday’s trends quickly, creating tomorrow’s products that evoke a childhood experience or a tradition could sometimes offer the best and brightest ideas for manufacturers.

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Tata Tea hunts for RTD beverage opportunities

Following a relatively calm year in 2008, Tata Tea is once again in acquisitive mood and is looking for investment opportunities in Russia, Asia-Pacific, Africa and South America. It says it is seeking to acquire strong national or regional ready-to-drink (RTD) branded businesses which have functional benefi ts and offer value. The Indian company may then bring the brands to the global arena.

Euromonitor International’s Hope Lee says opportunity exists in Russia with Nidan and Visma as possible targets, while stiff competition in China should not deter Tata Tea from entry.

Russia is forecast to be one of the fastest growing RTD tea markets, achieving absolute growth of 234 million liters over 2009-2013, about 80% more than the net increase expected in Latin America over the same period. It is anticipated that beverage players will instead invest heavilyin RTD tea for short and medium-term revenue growth.

Nidan Holding (Cyprus) Ltd and Visma ZAO could be attractive suitors for Tata Tea. Briefly, Nidan, ranked third in the Russian fruit/vegetable juice category and Visma ZAO is ranked fourth in bottled water.

While Japan is a no-go area in Asia, China is without a doubt the most important market. Although growth of the Chinese RTD tea market is expected to slow over the short to medium term, China will still be the main source of growth and account for over 80% of the regional increase over 2009-2013. It will be crucial for Tata Tea to be present if it intends to improve its position in the Asian-Pacific RTD market. Potential targets could include Guangzhou Pharmaceutical Holding Ltd (flagship herbal brand Wong Lo Kat) or Yangshengtang Co Ltd (Nongfu Spring water).

www.euromonitor.com

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