Cristiana Pană – Head of Strategy, Minio Studio

It is difficult to predict the evolution of product categories affected by seasonality, as it depends on several factors: the economic context, consumer behavior, purchasing power, commercial policies of market players, and, last but not least, the weather. However, I have identified a few trends that I think are interesting to follow in the market this year:

1. Uptrading – the hero in FMCG

With the VAT reduction, the phenomenon of uptrading, of switching to a superior product in the same category, is emerging for the first time in the last three years.

Uptrading has also been encouraged by the positive evolution of more expensive product categories and new categories such as coconut water, aloe juices, diversification of niche ranges, expansion of the portfolio of local producers with crafted import products, juices from 100% natural, organic ingredients and so on. A clear first example was the launch late last year of the special edition Bergenbier ALE, a niche, top-fermented beer.

2. “Being healthy” is on trend

 After years of being told that we drink and eat too much, it seems that a significant part of the population is starting to listen, leading to the emergence of a new breed of consumers. Younger generations are increasingly conscious of avoiding the consumption mistakes made by previous generations. A 2015 survey by Newscred found that 76% of consumers expect food and drink brands to provide health content and improve their recipes.

There’s no doubt about it: being healthy is ‘on trend’. A simple glance at the drinks shelf shows how much it has become populated with all kinds of smoothies, juices with more pulp, fewer additives, 100% natural juices, no preservatives, private label freshers. Demand is so high that even large packs of natural juices have appeared, in keg or box packaging. At the same time, the launch of Innocent juices on the Romanian market clearly shows consumer interest in fruit-based products rather than concentrates.

Brands are increasingly aware of this trend towards moderate and healthier consumption. This is why they are adapting to consumers’ needs through changes in recipes (e.g. reducing the amount of sugar), packaging (selling in smaller doses of 0.25 and 0.33ml), or various communication campaigns with aspirational messages (e.g. Pepsi with its 50th-anniversary campaign).

3. Increasingly smaller packs (single serving units)

Although volumes are coming from the sale of large packs, convenience stores and changing consumer behavior have a say in the market. So-called single units (smaller packs from which the drink is consumed in a single serving) have been on the rise recently. The reasons are varied.

Consumers now want to be healthier. They can’t completely deny themselves the pleasures, so they’re turning to smaller doses: less sugar, fewer calories per serving.

In other cases, smaller containers are preferred by consumers for reasons of convenience and ease of transportation. Increased frequency of shopping in convenience stores versus modern retail would be one reason. An example of a beneficiary of this recent trend is Coca-Cola. We all remember the special 0.25ml cans on sale for Valentine’s Day.

4. Increasing category diversification

Strongbow’s success in helping to form a new category, cider, has given impetus to other producers. They are more willing to launch new products in the category, diversify, and counter possible related segments that threaten to compete directly with them.

The series of beer mix launches and the rise of cider, with Strongbow, has paved the way for producers to enter a new niche with increasing growth potential, especially in the summer, especially as the new product launches have managed to “steal” from soft drink consumers. Light products aimed at women are a good example. Last year, Ursus Breweries launched Redd’s Light, a beer with 40% fewer calories than existing Redd’s variants.

Other products shaping movements in the market are due to another related trend of diversification. The rise in consumption of rosé wine, Aperol, and cocktails (mixology) are other disruptors for soft drinks and beer. An example here would be the iconic aperitif Campari, which recently launched the Campari Tonic cocktail.

5. More sophisticated tastes

Consumers are increasingly looking for new tastes, somehow obsessed with the notion of localization and homemade, soft drinks tend to seem generic. We have all sorts of flavors and variants that upscale the products in the range. Since Redd’s, which once opened the door to beer mixes in the Romanian market, there has been so much response to this consumer need that more and more variants have appeared: mojito, cranberry, lemon, and raspberry.

In a market where brands are growing through packaging innovations and range extensions, one can see with the naked eye the growth of bitter or sour flavors, replacing the sweet tastes of the past. Local products, easily recognizable ingredients on the label, and healthier options are increasingly popular with us too.

6. Artisanal and imported products

Lately, we have seen the diversification of the local brewers’ portfolio with increasingly specific craft and imported products. Increasing space in shops has been dedicated to new products (Corona, Leffe, Afflingem), products that respond to consumers’ need for special, imported, or craft beers.

There is also a strong growth of local brewery brands (Nenea Iancu, Zăganu), which, while not jeopardizing volumes for large producers, indicate an increase in consumer preference for craft products and authenticity, responding to trends from abroad.

What else can we expect?

Many international trends have yet to reach us and promise to change the current market landscape even more. A good example can be seen in the change in sports behavior. Although sports activities and sports items are highly demanded in our country, it is very interesting that we still do not see a change in the consumption of sports and energy drinks that even comes close to the results abroad. 

It seems that the protein drinks that are making waves in other countries or organic drinks are still far from our reality. But even so, this summer promises to be exciting.

Source: Revista Piața