12 April 2022
People Love a bit of DWB!
The world of functional drinks, or ‘drinks with benefits’ (DWB) is a category that has seen huge development.
Despite the pandemic the market has enjoyed record growth in investment with over £200m sloshed into new ventures. Consumers are seeking healthier alternatives to fizzy drinks and energy drinks and desire guidance on health-related issues particularly in the fallout of the pandemic.
When humans endure a major crisis, it alters our way of living and forever changes us. We rethink what’s important and pursue new lifestyles. Behind the scenes competitors develop new products, services, and partnerships. So, the deck gets reshuffled, and a new world begins to take shape, and this creates both risk AND opportunity.
Whilst the soft drinks category is vast it is relatively easily understood and shopped. The emerging segment of functional wellness drinks in the UK are worth £240.2m, totalling 2.7% of the soft drinks market. (NielsenIQ) and the global functional beverage market is projected to grow at a CAGR of 10.49% reaching USD 198.12 billion by 2026. A sizable prize, particularly when shoppers are willing to pay more than double the average price of a normal soft drink for a functional one. So, what opportunities and challenges does this bring?
COVID has left the healthcare system under enormous pressure with a backlog of 14million people awaiting treatment, people are looking for their own solutions. There is little holistic or whole system thinking. Functional health drinks replicate this with products designed to tackle specific niche problems. However, those ‘healthy’ pure smoothies are full of sugar so who do I trust? Research from Iris found that three quarters (77%) of consumers no longer trust brands. So, what if a brand were to adopt an open honest and holistic approach to functional mind and body care in the drinks space? A genuine opportunity to own this space in the minds of consumers could be up for grabs.
Dr Google means people are now more willing to challenge and take control of their healthcare. There is rising demand for nutrition short-cuts and products with benefits. Other emerging ‘magic’ ingredients like nootropics a term derived from ancient Greek which describes substances which improve cognitive function, such as caffeine or L-Theanine. The most popular nootropic substance used today is caffeine, which is proven to boost mental alertness. But other nootropic ingredients such as ginseng or L-Theanine, have the potential to enhance important brain functions such as memory or creativity. With a fifth of German consumers using functional food and drinks to maintain healthy brain there is scope for drinks to explore nootropics to support consumers in a cognitively more demanding world.
Consumers need-states are rapidly changing, ‘The Concerned’ are a huge and significant group of people of all ages and demographics who are talking direct action. The top five concerns across all age, sex, and demographic ranges are consistent.
- Retaining mental sharpness as I age
- Maintaining ability to continue with my normal activities when I age
- Tiredness and lack of energy
Drinks are the obvious conduit for functional ingredients as they can be digested more quickly than food. Consequently, there is growing a demand from shoppers wanting premium drinks with added benefits. 31% of shoppers are now interested in premium soft drinks that contain additional functional benefits.
People find themselves in a more cognitively and physically demanding world. More and more we are looking for help and solutions. Droplet’s mission is ‘to bring joy and nutritional value to your daily self-care routine’. From their packaging design to the intentions behind the flavours, they hope to inspire you to live your healthiest life. A well-intentioned proposition but curiously lacking in empathy and warmth as their use of language like ‘sparkling functional beverage’ demonstrates.
Functional drinks have broadly fallen into the trap of having a functional relationship with consumers (a bit of a Band-Aid solution) and are missing a trick in in behaving and being thought of in such a one-dimensional way.
Source: @ koiosbeveragecorp
One new entrant to nootropic drinks is Koios, (listed in Walmart US) is described as a ‘product that uses natural ingredients, backed by science’ and is ‘designed to support your most important assets: your brain and body’.
The body is a self-healing, self-correcting organism that will restore itself to optimal health if the right balance of interrelated systems is achieved. However, currently people lack the right guidance and support to help them to explore the right solutions for their specific needs and how to control things for their maximum health benefit. The brand that adopts the role of expert guide could have a strong cause that consumers could rally around.
The emotional benefits and positive emotional states that can be attained from achieving balanced mental and physical health should also not be ignored. A more emotionally active ‘feel better be better’ proposition offers an opportunity of higher levels of engagement. We humans are complex beings and our emotions are complex things, but brands are leaving a vast unexplored area untouched and any brand that helps us in the process of achieving our emotional needs could become a true love mark.
Effective communication requires brands to accept and reflect 5 Basic Human Truths in their design and communications approach:
- The brain craves ease & order
- Humans have a limited attention span
- Humans are visual
- Humans respond to emotion
- Humans are attracted to beauty
The greatest lesson to take from these drivers is to be simple to decode. To be effective your brand must answer three simple questions for the consumer, who you are? what you are and why you are relevant. All presented in logical flow or information that is easy to visually decode in seconds.
What do we think?
- Holistic wellness is a big opportunity: Functional drinks will continue to grow in popularity with the average spend on functional wellness drinks now more than twice the average price per litre spent on soft drinks. Drink brands can tap into this huge opportunity by taking a holistic and emotionally engaging approach, adopting and championing guidance and support. If you build it, they will come!
- The market is changing with Covid-19 shifting attitudes to health. The core need for an energy boost is still strong, but health and wellbeing are now playing more of a role in shopping choices. Consumers are open to new solutions and short cuts.
- ‘The Concerned’ are a significant group of people but need educating about why they need to invest their time and money in following a new helpful regime. It is paramount to communicate the evidence for the efficacy of their products to build trust, particularly offering robust scientific evidence for formulas promising cognitive advantages.
- Empathy and emotion are a potent mix: A more emotionally active and holistic platform of ‘feel better be better’ offers an opportunity of higher levels of engagement with consumers.
- Brands that reflect the 5 Basic Human Truths in their design and embrace simplicity will boost their engagement levels particularly if they answer, who they are? what they are and why they are relevant over and above all others when presented in a flow that is easy to visually decode in seconds.
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