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The latest sign we’re in a sparkling water bubble: Coca-Cola is making something called AHA

libadmin November 7, 2019
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Aha, the brand’s biggest new release in a decade, will replace Coke’s Dasani sparkling water, which according to Shane Grant, president of the stills business unit for Coca-Cola North America, has underperformed.

Nielsen all-channel sales data in August put retail sales of sparkling flavored water in the past 12 months at $2.45 billion. The segment is still tiny compared with carbonated soft drinks — $26.74 billion in sales in the same time period — but represents a huge growth area. Against the backdrop of declining sales for soda, brands such as Massachusetts-based Spindrift reported triple-digit spikes in the last year.

Coca-Cola is not new to the space, having purchased southwest regional player Topo Chico and debuted flavored sparkling lines for Dasani and Smartwater.

“We’ve been in this category for a long time,” Grant said in a phone interview. “We know the category, have watched it carefully and seen it grow and fragment. This is one of the most dynamic segments in beverages, generating almost as much retail dollar growth as all other beverage segments combined.”

Half of the sales growth, he said, is in sparkling, and he doesn’t anticipate that slowing down. Grant said that consumers are looking to carbonated water for singular flavors but also to serve different functions, including simple refreshment, relaxation or energy enhancement. Consumers are looking for waters that are alkaline or that contain antioxidants or caffeine, and brands are exploring different functional claims as a way to stand out.

What Aha won’t have, said Grant, is CBD, or cannabidiol, the second-most-prevalent active ingredient of cannabis and a cultish beverage ingredient right now hung up by lack of FDA regulatory decisions. “We’ve been absolutely clear on our thoughts about CBD,” Grant said. “We have absolutely no plans to launch.”

What is driving this Aha moment, and why Coca-Cola decided against doubling down on existing products is this: plastics. A recent audit by the Break Free from Plastic coalition named Coca-Cola as the world’s largest plastic polluter. Millennials and Generation Z, for whom reusable water bottles are a notable fashion accessory, have spoken with their wallets. Cans, recycled more often than plastic bottles, are in, and single-use plastic bottles are out. Although Dasani sparkling waters are in cans, the iconic Dasani and Smartwater packaging is clear plastic bottles. The preferred packaging for bubbly water, Grant said, is cans.

He said that the company is working on an initiative to recycle every single-use package by 2030 and recently announced it has committed $100 million to accelerating recycling. Aha will debut in an eight-pack of 12-ounce cans and in 16-ounce single-serve cans, with pricing in line with mainstream sparkling waters.

According to marketing materials, Coca-Cola’s launch taps into the “huge consumer wellness trend,” but some of this trend pulls against purchased beverages overall. The market researcher NPD Group estimates beverage consumption overall in the United States has fallen from an average 1,127 beverages per person in 2014 to 1,104 in 2019. This doesn’t mean that Americans are learning to live parched. The fastest-growing beverage category is tap or filtered water (the biggest losing category: cow’s milk and alt-milks).

This shift to plain water coincides with a growing body of evidence that sweetened beverages are linked to several lifestyle-related diseases. An October Rudd Center for Food Policy and Obesity study showed that sugary drinks contribute almost half of added sugars consumed by children, and fruit-flavored drinks are the most common type of sugary drink for young children. Health and nutrition experts recommend that children avoid drinks with added sugars or low-calorie sweeteners, and that caregivers limit children’s consumption of 100 percent juice.

A study published in JAMA Internal Medicine last week by researchers at the University of California at San Francisco found that a workplace ban on the sale of sugar-sweetened beverages led to a 48.5 percent average reduction in consumption and significantly less belly fat. Almost 70 percent of the 202 participants saw a decrease in waist size as well as an improvement in insulin resistance and lowered total cholesterol over the 10-month period of the study.

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