Today's consumers want more than just a tasty, refreshing drink. They want a health miracle in a bottle.
A REPORT released by Euromonitor International this year identify fruit and vegetable juices as key growth areas in the beverage markets of Saudi Arabia and the UAE over the short term.
A young population and rising health awareness continue to drive demand, with quality products produced by local companies at reasonable prices laying the foundation for a dynamic juice market in the region.
According to Monther Al Harthi, chairman of the Arab Beverages Association and CEO of Al Rabie Saudi Foods Co Ltd, a leading juice and dairy company in Saudi Arabia, market analysis in
the Kingdom reveals that consumers are becoming more aware of the
health benefits of what they eat and drink, a trend the juice industry is actively tapping into with "value-added" juice offerings.
"Fruit juices, which are fat free, nutrient dense and rich in vitamins, minerals and phytonutrients, pack the required nutritional contents needed by both adults and children alike.
"This demand has led to the introduction of products that have the required amount of vitamins, minerals and other essentials needed for a healthy diet, examples of which are the fortified juices being marketed today."
Al Rabie is joined by other regional juice brands such as UAE-based National Food Product Company's Lacnor (Puncho product) in offering juices fortified with calcium, vitamins C, D and E, etc.
Doing it for the kids
"Increasing the awareness of the benefits of fortified juices prompts parents to consider providing these juices to their children instead of the usual soda and energy drinks. Marketing fortified juices successfully and being able to put the message across regarding its benefits can lead to the market growth of these juices," says Al Harthi.
A widely published press release from Al Rabie at the time of the product's launch last year highlighted the fact that the juice contained vitamin D and calcium, required for growing bones and not naturally produced by the body. It positioned the fortified juice as a "preferred alternative" not only to unhealthy soda drinks but even to dairy beverages - the chief calcium and vitamin D suppliers to date - and one that many parents have difficulty getting down their fussy kids' throats. Fortified juices are seen by many as a much easier option.
According to Natascha Edelmann, head of marketing, Masafi, packaging is key to attracting the younger generation.
"Children like to have their own personal packaging with design elements that are attractive and entertaining to them. We also try to simplify their consumption by offering special easy-to-drink tops and telescopic straws," says Edelmann, adding that with a significant proportion of the population being under 12 years, meeting their needs and wants becomes a non-negotiable strategy towards wooing the next generation of consumers.
The kids' market continues to see healthy investment in the category, with several brands such as Masafi and Lacnor (Junior Juice, Kido juice drinks) offering smaller serve packs, and displaying colourful cartoon and animal characters specifically targeting kids.
Superfruits
With regard to global juice trends, "superfruits" such as goji, acai, guava and mangosteen are beginning to appear in more blends, a trend that Edelmann says is starting to be reflected in the regional market, with more consumers looking for fruits promoted as possessing rejuvenating properties - an added value compared to mere refreshment.
"In our own portfolio we experienced a surprise. In spite of the economic slowdown, our most expensive product - the 100 per cent pure juice pomegranate, cranberry, acai blend - became our best seller after launch in January of this year."
Al Harthi agrees that, while traditional flavours continue to dominate, superfruit offerings and blends are gaining in popularity.
"The most popular flavours today are apple, orange, pineapple and mango... Newer mixed flavours like kiwi and lemon, or orange and carrot, have also achieved significant growth in this segment," he says.
Quality vs value
At 34 litres a head, Saudi Arabia has the highest juice consumption in the region. In a 2008 report, Euromonitor predicted that, while juice drinks currently were the most consumed format, 100 per cent pure juice offerings were expected to overtake juice drinks as demand grew for beverages perceived as being more nutritious.
According to Edelmann, in the UAE the three juice categories - 100 per cent pure juice, nectars and juice drinks - are more evenly balanced, with each segment holding about a third of the pie.
"YTD, nectars are flat, pure juices are slightly up and drinks are registering a 2 per cent increase versus the previous year. The implication here is that consumers are still searching for nutritious high-quality juice products, ie, 100 per cent pure juice, but these being economically challenging times they may also be trading down to a juice drink which is priced in the "good value" segment but contains only 10 per cent juice."
Diversification in dairy
A desire to consume products with additional health benefits also extends to the regional dairy sector, which has seen a flurry of activity in recent years in the healthy snack category (yogurts with fruit pieces, flavoured yogurts) and probiotic category (flavoured laban, Activia Smoothies, etc). While the traditional milk and dairy beverage sector is globally in long-term decline, product extensions and value-added products such as yogurt and functional drinks are emerging as one of the fastest-growing sectors in the dairy category.
"The health benefits from consuming dairy drinks have always been a key marketing strategy in selling milk products. However, the recent drop in milk consumption has prompted dairy manufacturers to innovate and be creative in marketing dairy drinks. We have seen this strategy being implemented by way of little bottles or smaller milk containers, and meal substitutes like smoothies, yoghurt and flavoured milks. Packaging is another segment for innovation, as different shapes and designs tend to attract more consumers to buy the product," says Al Harthi.
More convenient packaging formats such as one-shot or "daily dose" functional drink packs and single-serve stand-up tubs are allowing dairy beverages to compete with other on-the-go soft drinks. Specially designed kids' packaging is also used to aggressively market these products among a traditionally relevant target market. (Almarai's Zady Fresh fruit dairy snack in colourful cartoon packaging, Lacnor's Junior Chocolate and Strawberry Milk packs).
"Parents are concerned with what they feed their kids and the nutritional benefit they get from the products. A large percentage of what they deem as healthy and nutritional foods fall under the dairy products segment," says Al Harthi.
Activity in the probiotic sector
But while functional drinks may have been the dairy beverage industry's rising star in recent years, the past few months have seen big global players in the category such as Danone come under pressure in the UK and the US to back the health claims of their probiotic products with firmer scientific evidence, particularly when marketing them to kids.
The Advertising Standards Authority in the UK recently banned an Actimel TVC in the UK for making "misleading claims" that Actimel was "scientifically proven to help support your kids' defences". The ADA said the claim was not backed by sufficient evidence, which Danone denied. The ban came weeks after the EU's European Food Safety Authority rejected a number of health claims related to probiotic products and after Dannon (the American company) was forced to pay $35 million to customers in the US who were allegedly misled by claims on the label of another probiotic brand, Activia, made by parent company Danone.
Digesting the effects
But will this have a detrimental effect on the category as a whole? Industry watchers say the recent upheaval in the probiotics market will prove more useful than harmful in the long run in terms of forcing companies to back their probiotic promises more solidly and advertise more responsibly. The media storm generated by the controversy will help raise public awareness of bacterial strains that do have health benefits, and educate consumers on the proper use of probiotic products.
And while big players like Danone may be bearing the brunt of the witch-hunt at the moment, they are the very companies that are likely to emerge stronger. Having already made a huge investment in building the category, they are not likely to back down now, and are expected to build a convincing case in favour of the efficacy of probiotics backed with stronger, more compelling evidence (where it exists) on the health benefits of these products - something that can only be expected to be met with widespread approval from the category's health-conscious core consumer base.
© Gulf Marketing Review 2009
