Worrying health trends and environmental concerns are nudging Australians towards nutrition-focused food and drink, creating opportunities for brands to develop healthier options with sustainable packaging.
Thank you for reading this post, don't forget to subscribe!The upcoming summer months would be key for product innovation, as that is the season where more Australians will be socialising and consuming beverages across more categories, according to a Q3 2024 Canvas8 report titled ‘Why Aussies want a functional future for soft drinks’.
Experts observed that craft beverages and product revamps are tapping into an appetite for novelty and nostalgia among Australians, pushing them away from conventional sugary drinks.
This development aligns with a 2024 report by Food Standards Australia New Zealand (FSANZ), which stated that two-thirds of Australians value nutrition above other attributes in their food choices excluding taste and price. It also revealed that 63% say they check the sugar content when purchasing a product for the first time.
Making healthier choices
The move towards healthier options was triggered by worrying statistics – Australia’s obesity has tripled since 1980 and diabetes is seeing a near three-fold increase since 2000, according to Australian independent think-thank Grattan Institute.
The Parliamentary Budget Office, 2024 also reported that Australians consume more than 2.4 billion litres of sugary drinks each year, with Coca-Cola making up 40% of the soft drink manufacturing market.
This is due to many people thinking that drinking water is boring, said Mark Curry, CEO and founder of Savvy Beverage.
“They’re always after an alternative or fun way to consume more liquids, and more often than not, it ends up being sodas. In Australia, it’s still common for people to consume carbonated soft drinks for breakfast, lunch, and dinner,” said Curry.
Such findings prompted The Australian Beverages Council to propose cutting the sugar in beverages by a fifth within this year.
Additionally, Rethink Sugary Drink, a coalition of more than 20 health and community groups, along with the Australian Medical Association, argues that implementing a tax on sugary drinks could lower annual sugar consumption by 2.6kg per person. The World Health Organization reports that 108 countries have already adopted similar policies.
“I’m a massive advocate for a sugar tax, provided that it also considers artificial alternatives. If the sugar tax included artificials, it would push everything toward natural alternatives,” said Curry.
Excessive sugar intake not only contributes to obesity and diabetes but also plays a role in the growing mental health crisis.
Many are not aware that most of the neurotransmitters influencing mood, energy, and motivation are produced in the gut. Consistently consuming artificial ingredients impacts gut functionality, Curry explained.
Consumers aiming to reduce their cravings now have the option of functional soft drinks, a rapidly growing market in the region. Curry observed that since the pandemic, consumers have increasingly turned to health-focused or functional beverages with ingredients that offer health benefits.
However, energy drinks remain the top non-alcoholic category in Australia.
“People just don’t know there is an alternative yet – education is slowly moving,” said Curry.
Apart from educating consumers. brands could work on creative flavour combinations and nostalgia, which are big draws for the current generation of consumers. No- and low-alcohol (NOLO) beverages are also gaining popularity.
Additionally, novelty and nostalgia have become powerful tools to capture consumer interest, driven by a post-pandemic longing for comfort and stability. For example, 2023 saw the return of Halls, a popular drink discontinued in 2000. To enhance the nostalgic experience, the brand is offering the product in traditional glass bottles, which are more environmentally friendly than plastic.
The soft drinks industry is not only responding to the anti-sugar movement but also to increasing demands from environmental advocates.
Adopting sustainable packaging
Nina Gbor, director of the circular economy and waste programme at The Australia Institute, points out that Australia is among the world’s highest per capita consumers of single-use plastics.
This preference for fizzy drinks is contributing significantly to plastic waste, driving calls for the adoption of reusable packaging solutions.
Nearly half of Australian consumers consider sustainability a key factor in their retail purchases, making it essential for brands and businesses to focus on sustainable packaging and recycling efforts.
However, with many people facing tighter budgets, companies must ensure that eco-friendly products remain affordable and accessible to shoppers.
Gbor said more brands should make utilise reused materials.
“A circular system where drinks are refilled, for example, will reduce plastic bottles that pollute the environment. Brands can use more aluminium cans for soft drinks made of recycled aluminium. Aluminium can be recycled endlessly. Recycled aluminium can save 95% of the energy used to make a new can without the need for any new materials being mined,” explained Gbor.
Essentially, brands remain environmentally friendly while still meeting their consumers’ demands.
Healthier drinks like juices and mineral waters represented 57.1% of total soft drink expenditure in 2023, with carbonated beverages comprising the other 42.9%. By 2027, this trend is expected to continue, with health-focused drinks anticipated to make up 58% of the market, leaving carbonated drinks at 42%.
“If you provide someone an alternative at a similar cost but with vitamins and herbal ingredients providing the uplift as opposed to chemicals, it’s just a much more attractive approach,” says Curry.
