Coca-Cola diversifies markets

By 2006, Coca-Cola looked as though it was finally succumbing to the blows of its arch rival PepsiCo, which had attained a similar market value of around $100 billion. Ten years earlier, Coca-Cola had commanded a market share that was three times greater than that of its fiercest rival; but by 2006, the companies were on roughly equal terms. Pepsi was pulling ahead with strong growth achieved by diversification and strategic acquisitions. Meanwhile, Coke was suffering. Its brand image had come under pressure in recent years as consumers looked for healthier products and sought healthier lifestyles. The company’s flagship products, which are loaded with sugar, fitted poorly with this emerging trend. So Coke had no choice but to change tactics. Rather than waging a direct “brand war” with PepsiCo over its cola products, the company focused its attention on the increasingly popular functional-drinks segment. The strategy proved to be a winning one, and the company has begun to exhibit solid growth once again. First quarter 2007 results show a 17 percent increase in net revenues—its highest quarterly-growth rate since 2002.

Coke is regaining its market-leading position, in fact, by mimicking the winning strategies of PepsiCo. In the last decade, PepsiCo’s growth dwarfed Coca-Cola’s, gaining significant ground with a shrewd strategy of acquisitions that centered on alternative beverages and snacks. (Pepsi’s acquisitions included Tropicana and Gatorade, as well as the snack giant Frito-Lay.) Now Coke’s new product focus has similarly switched to healthier drinks in a bid to claim a substantial share of the expanding functional-drinks market. New products and new variations on old products have been introduced. Diet Coke Plus was launched in the US in April 2007, with the company’s marketing focusing on the alleged nutritional value added to the beverage rather than the taste. The launch was deliberately low-key and was summed up by Scott Williamson, group director of marketing and communications for Coca-Cola North America, who said, “The idea of Diet Coke with vitamins and minerals made it a newsworthy announcement in and of itself”. The drink contains vitamins B-6 and B-12, along with magnesium, zinc and niacin. This represents another step towards penetrating the relatively new functional-drinks segment, which was worth $1.9 billion in 2006 in the US alone.

Success has also been achieved through Coke Zero, a drink marketed by Coke as a “male alternative” to Diet Coke. Marketed with the slogan “Great Coke taste, zero sugar”, Coke Zero has proved to be a big success and has led to similar launches with Cherry Coke Zero and the proposed Coke Vanilla Zero—a formerly-discontinued brand that is being revived with a healthier twist.

Energy drinks is another area that Coke is looking to capitalize on with the release of Enviga—the result of a joint venture with Nestlé. Enviga has been marketed in the US as a beverage based on green tea, which the company claims can help burn calories. Coke has also been quick to point out the calcium content in Enviga, which amounts to 20 percent of the required daily amount. Enviga was launched in Europe in June 2007.

Coke has also registered “Coca-Cola Green” as a trademark, and it is believed that the company is developing a new variant, which includes green-tea extracts. Any new product would be marketed separately from the recently-introduced Enviga product.

The UK bottled-water market has continued to show robust growth and represents a lucrative proposition, as shown in Table 1. In 2004, Coca-Cola attempted to enter this market by introducing its Dasani brand of bottled water to the region. This proved to be a disaster for Coke, after consumers learned that Dasani consisted of purified tap water from the company’s Sidcup manufacturing facility. Furthermore, the purification process had left traces of bromate—a carcinogen—in the water. The drink was withdrawn from the UK market and proposed launches in Europe were scrapped.
Coca-Cola is now ready to re-enter this market after its purchase of the Belgian brand, Chaudfontaine, an established spring-water brand, which is to be gradually rolled out across Europe. The bottled water market was worth $1.7 billion in the UK in 2005 and has shown the strongest growth of any segment in the soft-drinks industry over the last five years.

Coca-Cola has also increasingly publicized its efforts to become more health focused. It now refers to its carbonated drinks as “sparkling beverages” rather than the much-maligned “fizzy drinks” or “carbonated drinks”. It also launched its “Make every drop count” campaign online, in which the company promotes the benefits of a healthy lifestyle, particularly for children. The new microsite details Coke’s goal to change with its customers needs, and it actively encourages feedback from its customers. Also detailed on the website is the company’s commitment to supporting physical activity, and a wealth of nutrition information.

The company has expanded its green initiatives. In a recent speech to the US Chamber of Commerce, Coke’s CEO Neville Isdell devoted much of his time to speaking about global demographics and a number of ethical initiatives that Coke was involved with. These included schemes to improve water supplies in Africa, cleaner refrigeration quality and recycling. At around the same time, Coke released a statement which outlined its plans to make its own headquarters more environmentally-friendly. Plans included the reduction of CO2 emissions along with scaling-down water and energy
consumption. This is in balance with the growing global trend of consumers demanding that companies become more ethical.

Analysis
• Coca-Cola has taken steps to improve the image of its brand in health and environmental circles. It has sought to reflect this publicly through recent press releases, speeches and statements, as well as marketing campaigns.

• Coca-Cola’s recent product launches have concentrated on healthier drinks and healthier alternatives to older products. The company’s product portfolio has diversified across the soft drinks sector.

• After a marketing disaster in 2004, when Dasani was launched in the UK, Coca-Cola is now in a position to rectify this mistake with the launch of an established spring-water brand across Europe. It has acquired the Chaudfontaine brand, which it expects to roll out later in the year, with the objective of obtaining a foothold in the still-growing bottled water market.

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Sports drinks make 'Treks' in PET bottle

Leading Brands of Vancouver has launched Trek natural sports drinks and Nitro energy drinks in North America in an unusual, 20-ounce Heat-Tek Brick polyethylene terephthalate (PET) bottle from Ball Corporation. The bottle's unique, proprietary design eliminates the need for side vacuum panels, providing a smooth label panel that gives consumers a more comfortable grip and facilitates labeling. Sweetened with pure cane sugar and low-fructose corn syrup, the Trek line is designed to naturally hydrate athletes quickly. Nitro packs the punch of an energy drink and also hydrates the body.

The 20-ounce, patent-pending bottle features the trademark Trek loop cap that allows the bottle to be easily clipped to a backpack, a belt, a bike and other paraphernalia. Trek is initially available in four flavors: Orange; Fruit Punch; Lemon-Lime; and Wildberry. Nitro comes in Grape, Blue Raspberry and Red Berry. Leading Brands chairman and CEO Ralph McRae says the drinks were designed to fill what's perceived as a void in the fast-growing, “gulpable” beverage category. Energy drinks have been increasing in size recently, with larger bottle sizes becoming more popular.

The Heat-Tek technology helps the container to eliminate what Ball calls the “crinkle effect,” created by applying labels over side vacuum panels, says Mike Vaughn, vice president of innovation at Ball. “More importantly, it doesn't require the significant equipment modification required to fill other panel-less bottles in the market, so it is a very cost-effective solution,” he adds. Explains Joanne Saunders, marketing vice president for Leading Brands, “The easy-grip bottle provides a cost-effective way for us to improve consumers' drinking experience with a smoother, easy-to-grip label panel.”

[Our thanks to our sister publication Packaging Digest for this article.]


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Gatorade, Tiger Woods join forces

The Gatorade Company, a division of PepsiCo, and Tiger Woods are collaborating to develop Tiger-inspired sports performance beverages for athletes at all levels. Terms of the licensing deal were not disclosed.

The first product, Gatorade Tiger, is a Gatorade Thirst Quencher sub-line that will be launched in March 2008. The sub-line charts new territory for Gatorade, as it marks the first-ever licensing deal for the $5 billion-brand and Tiger Woods' first-ever endorsed sports beverage.

“This relationship is built on The Gatorade Company's understanding of athlete needs and Tiger's unique position as one of the world's best athletes. By bringing these two leaders together, we feel we have an unprecedented opportunity to provide both Tiger and athletes at all levels the products they need to train and compete at their best,” says Todd Magazine, president of Gatorade. “As a first step in our relationship, Tiger recently underwent sweat-analysis testing with the Gatorade Sports Science Institute (GSSI), which showcases his dedication to this collaboration.”

The in-depth scientific sweat testing, conducted by scientists from GSSI, was designed to shape Woods' own specialized hydration and nutrition strategy. A measurement of sweat rate, sweat electrolyte concentration, fluid and electrolyte balance and energy needs were analyzed during a vigorous round of exercise.

Gatorade Tiger will be available in three new flavors inspired and selected by Woods (cherry blend, citrus blend and grape) and will be packaged in a new 500-milliliter bottle and a 32-ounce bottle. Gatorade Tiger will be the same scientifically-proven formula of Gatorade Thirst Quencher. As with previous Gatorade sub-lines like Gatorade AM (2007) and Gatorade Rain (2006), the Tiger sub-line will provide hydration (fluids and electrolytes) and carbohydrate energy to fuel athletic performance.

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Two-part beverage may reduce energy intake

Preliminary research suggests that a novel, two-part beverage consisting of alginate-pectin and calcium may help overweight and obese women to feel full. Researchers from the University of Buffalo and McNeil Nutritionals conducted a small within-subjects, double-blind, placebo-controlled study where twenty-nine women ingested the drink before breakfast and midafternoon, for seven days.

Three alginate-pectin formulations were tested: 1.0 grams, 2.8 grams, and control (no fiber). Subjective satiety and ad libitum food intake were measured on days one and seven of each one-week treatment period, with a one-week washout between testings.

Researchers said there was a significant reduction in food intake, at dinner for both formulations compared with the control formulation. The effects of the gel beverage differed as a function of rigid dietary restraint status. Women in the lower 50th percentile of rigid restraint consumed 12 percent less energy during the day and 22 percent less for the evening snack in the 2.8-gram condition compared with the control condition. No effect was found for women in the upper 50th percentile of rigid restraint.

This suggests that alginate-pectin and calcium may enhance satiety, and may aid in weight loss; however, more research is needed.


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Improving Protein Powders

by Dr Zhang Dongbai
Manager, Asia Pacific Application Center (Beijing)
Cargill Texturizing Solutions


Sports drinks, which are designed to provide effective rehydration, boost sports performance and aid muscle recovery, have established themselves as a lucrative sector, broadening out in appeal from their core consumer group of professional athletes to encompass recreational exercisers and lifestyle users.

In recent years, the global sports drinks market has seen double-digit growth, according to market analyst Zenith International. Since the concept of “body and mind” stimulating energy drinks originates from Japan and Thailand, it is not surprising that Asia Pacific remains the leading region in terms of global volume.

In 2006, the industry-sponsored Scientific Advisory Board (SAB) on sports nutrition and performance concluded that the addition of protein to carbohydrate-containing sports beverages provides superior benefits in comparison to beverages based on carbohydrates alone. According to the SAB, adding protein to carbohydrate enhances the efficiency of carbohydrate usage, improves muscle-tissue repair and reduces muscle-fiber damage.

Proteins are now widely used in sports drinks. However, the range of powdered-protein products and their different performances in liquids pose real challenge for anyone involved in sports-drink manufacture.

Whey-protein concentrate and whey-protein isolate are the most common sources of proteins used in sports nutrition worldwide. These powders typically contain protein levels of between 60 percent and 90 percent—a concentration which strongly influences their reconstitution characteristics. The higher the protein level, the more hydrophilic or water-attracting the powder becomes, complicating its characteristics during reconstitution. A gelatinous layer forms at the interface of the powder and water and this barrier prevents the water from penetrating the powder particles. Consequently, the powder does not disperse but remains on the surface of the liquid, and lumps form during stirring.

Manufacturers of protein powder products typically use different technologies to facilitate reconstitution with instantized whey-protein powders. Agglomeration, results in an increased particle size and a more porous powder structure that improves the penetration of the liquid. The use of a surface-active agent can also compensate for inconvenient powder-surface behavior.

In nature, lecithins are key emulsifying agents. For decades, the dairy industry has used lecithin as a traditional emulsifier for instantizing whole-milk powder.
While there are many different types, they all have phosolipids in common. These have hydrophobic long-chain fatty acids counterbalanced with polar, hydrophilic phosphates. A concentration of these phospholipids at the oil-water interface lowers surface tension and makes it possible for emulsions to form. Once this occurs, the phospholipids at the surface of the oil or water droplets form barriers to prevent the droplets from coalescing.

Consequently, the rising demand for instantized protein powders in sports drinks has prompted Cargill Texturizing Solutions to develop a high-performance lecithin, specifically for this purpose. Metarin EWD NGM is an enzymatically-hydrolyzed, liquid soybean lecithin of guaranteed non-GMO origin which has been designed for use with highly-concentrated protein products.

Metarin EWD NGM is improves the wettability and dispersibility of powdered protein products in liquid, since it provides a combination of both agglomeration and surface-active properties, resulting in a fast and effective instantization of protein powder.

Thanks to its hydrophilicity, Metarin EWD NGM enables protein powder to disperse very quickly. It is easily dispersible in water, and soluble in oil, which allows it to be used in two main ways: Firstly, if the spray-drying technology already provides an appropriate particle size, particle structure and particle density, this product can easily create an instant effect just by spraying it onto the powder. As a result of this process, it is possible to instantize proteins like whey proteins or soy proteins. Secondly, if If after spray-drying the powder is still fine and dusty, an additional agglomeration step is required. Metarin EWD NGM can then easily be dispersed in water, and sprayed over the powder in a combined one-step agglomeration and lecithination process. Typical applications of this process are calcium caseinate and powder mixtures like sport drinks, which contain different ingredients having dissimilar reconstitution behaviors.

Due to the fact that lecithin is typically applied to the powder at the latest stage of instantization processes with no additional downstream preservation stage, it must fulfill the highest quality standards.


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Whey to Go

By Ulrik Soendergaard
Communications & PR, Chr Hansen

The demand for functional dairy drinks is rising fast. Combine the markets of Western Europe, the United States and Japan, and functional dairy drink consumption in 2006 rose 12 percent to 999 million liters. Western Europe alone accounts for more than a 55-percent share. The US has had blistering year-on-year growth of around 50 percent (although it did start from a low base). Despite Japan’s eroding numbers, food and drink consultancy Zenith International, projects that the three markets will reach 1.6 million liters by 2011, translating into $9.1 million.

Probiotics for life
Despite these opportunities for growth, functional-drink producers are facing two equally compelling and opposite demands. Consumers are unwilling to compromise on convenience, health and taste. At the same time, milk-solid and powder prices have soared. The challenge is to develop solutions that are attractive to both groups.

One concept that is turning heads is Chr Hansen’s ‘My Whey’ drinkable whey shots. Launched at Food Ingredients Europe in October 2007, these turnkey solutions contain the probiotic strains BB-12 and LA-5, which have documented health benefits; the enzyme Ha-Lactase for reduced sugar content in the final drink; and natural colors with phytonutrient properties. The solution comes in three flavor profiles: neutral, mango/orange, and exotic (which features a pineapple note). More are scheduled to follow.

“We worked to combine the best of both worlds,” says Ingrid Klinth Holm, marketing manager, Probiotics, Chr Hansen. “The end-product is high in nutritional value, has a naturally-fresh yoghurt note, and is convenient to enjoy on-the-go. To our knowledge this is the first concept for small probiotic whey shots on the market.”

Nutritious, naturally
Whey by itself is healthy. As the byproduct of cheese production, it already contains protein, lactose, minerals, vitamins and whey protein fractions (which are low in fat and easily digested). Because of its byproduct status, many consumers are simply unaware of it or may have a slightly negative perception of it, partly because of its salty taste. But in the case of the “My Whey” shot, this is overcome by pairing a specially-treated whey protein with correct culture. The result was a fresh and palatable beverage.

In terms of appearance, whey drinks have a high color intensity, due to their semi-transparency. This means that whey drinks can be marketed as soft drinks; they can be easily carbonated due to their low viscosity. This makes it possible for beverage producers to release new products without eating into their dairy beverage market.

The “My Whey” shot contains probiotics, or “friendly” bacteria that, when ingested in sufficient quantities, exert certain health benefits. (The word probiotic literally means “for life” and is the opposite of the word antibiotic.) Probiotics can help strengthen and maintain natural intestinal balance—a function that plays an important role in overall health and immunity. BB-12 and LA-5 are two of the most well-documented probiotic strains on the market today. The “My Whey” shot also uses the power of Ha-Lactase to help consumers who suffer from intolerance and malabsorption. Another advantage is that the sweetness of the product increases without the use of sugars or artificial sweeteners.

Great expectations
The ‘My Whey’ drink generated a lot of buzz,” says Christian Gilleladen, application manager, Chr Hansen. “We doubled the number of ‘My Whey’ we originally planned to bring to FiE, but we still we ran out. Hundreds of people have shown interest in the concept and since the show, we have been busy following up on serious requests Europe, North America and South America.”

The “My Whey” concept has been launched globally, but will initially be focused on the German market. It will shortly move to the rest of Europe, with the South America to follow.

Table 1