Beverage Innovation

After delays due to the pandemic, Coca-Cola has officially debuted Costa Coffee in the US market. Coca-Cola acquired the UK coffee chain in 2019 and has since expanded the brand throughout Europe. While Costa is the world’s second largest coffee shop chain, with a huge footprint across Europe and Asia, the brand is relatively unknown in the US. However, Tim Warner, GM of Costa Coffee US, believes Costa has potential to disrupt the US coffee market with its premium, yet affordable beverages and globally established brand. Warner states the goal is to reimagine the US coffee category by transforming the perception of coffee from a functional beverage to a premium, quality experience for all. Although Coca-Cola has offered a variety of coffee solutions in the US over the years, Costa Coffee’s debut marks the first time the company has brought a premium coffee offering with an established, global fanbase.  While Coca-Cola will offer Costa whole-bean coffee, ground coffee, and single-serve pods directly to consumers, the main launch will revolve around its Smart Café and Proud to Serve technologies. Costa Smart Café is a piece of autonomous equipment that dispenses freshly made hot and cold drinks. The patented machine grounds coffee beans, froths fresh milk, and dispenses syrup to provide barista-quality coffee. Customers can also customise their drinks, with more than 250 drink combinations. In addition, Smart Café records and reports analytics to help operators maximize sales and profits through identifying trends, keeping ingredients stocked, and getting ahead of maintenance needs. Coca-Cola hopes to roll out Costa Smart Café in retail, grocery, lodging, and leisure outlets. On the other hand, Costa Proud to Serve provides equipment options, such as countertop machines and hot and cold brewers, to allow foodservice, hotel, and retail outlets serve its coffee. It can be set up as self-serve for consumers or back-of-house for the crew to prepare beverages. The equipment also includes a digital ecosystem that supports the customer in building its coffee business. Smart Café and Proud to Serve products are already piloting in select markets. According to Warner, Coca-Cola will gradually expand Costa Coffee in the US, with a priority on establishing the brand with consumers.  

South Africa’s Competition Appeal Court recently ruled that Coca-Cola Beverages Africa (CCBBA) broke conditions related to two mergers in 2016 and 2017. Six years ago, competition officials in South Africa approved a deal between SABMiller, The Coca-Cola Co. and Gutsche Family Investment, creating Africa’s largest bottler. A year later, Coca-Cola acquired SABMiller’s stake in the business. Both deals included requirements to protect workers. However, in a judgment handed down on 17 June, the Competition Appeal Court ruled CCBA violated those conditions when its local subsidiary retrenched 368 employees in 2019. In defense, CCBA claimed the job cuts were necessary due to the macro-economic climate, the tax on sugar, and rising raw material prices. CCBA has 15 days from the date of the judgment to file an application for leave to appeal with South Africa’s Constitutional Court. If it does not file an application for leave to appeal, it will have to submit a remedial plan to the Commission, which must include a reinstatement plan for the 368 retrenched employees. Earlier this month, The Coca-Cola Co. said it had delayed plans to list CCBA as a publicly traded company due to market volatility.

In November 2021, Coca-Cola partnered with advertising-holding company WPP to create a partnership that includes an internal team dedicated to Coca-Cola globally called Open X. Before the partnership, Coca-Cola operated within a fragmented network of marketing and advertising partners throughout its global business. With Open X, Coca-Cola aims to make its marketing and advertising more consistent and efficient by focusing on one streamlined strategy. A significant development in the OpenX model is that it encourages collaboration with outside competing agencies. The partnership also aims to make the brand young and relevant again and expand its customer base.  In February, OpenX launched its “Coca-Cola Creations” campaign, which included a ‘space-flavored’ cola, as part of its ‘Real Magic’ global marketing platform. In May, it rolled out a new global campaign for Sprite called “Heat Happens.” 

Danone North America has announced the launch of its Activia+ Multi-Benefit Probiotic Yogurt Drinks. Activia+ contains live and active probiotics that help support one’s gut health. In addition, Activia+ is the first Activia product with nutrients to help support the immune system, with vitamins C, D and zinc. To emphasize the product’s ability to support the immune system, Activia launched a new campaign titled "A+ Feels." The integrated creative campaign will live across national television, digital, social media, shopper marketing, and public relations, and be geared toward younger generations of consumers interested in functional foods for proactive health. Activia+ will be available in three flavors - Strawberry, Peach and Raspberry – and in retailers including Kroger, Publix, Stop & Shop, and Target.

Keurig Dr Pepper Inc. recently announced a definitive agreement to acquire the global rights to non-alcoholic, RTD cocktail brand Atypique from Station Agro-Biotech. Atypique currently holds 42 percent market share of the growing non-alcoholic cocktail market in Canada. The agreement includes a multi-year collaboration between the two companies to fuel accelerated growth for Atypique, leveraging Station Agro-Biotech's R&D expertise in the category and KDP's expansive sales and distribution network. Specific terms of the deal were not disclosed, but it is expected to close later this year in Q4.

Cacao-based food company Blue Stripes has announced it will launch its Cacao Water this month. Blue Stripes makes its cacao water using a cold pressure process that extracts the juice from the pulp of the cacao fruit. The company claims the resulting cacao water is high in antioxidants, magnesium, and fiber and has the sweet and sour taste of lemonade. Blue Stripes’ Cacao Water will launch in three flavors: Just Cacao, Chili Lime, and Passion Fruit. Blue Stripes started as a café in New York City, selling nutritious cacao-based beverages and foods made from underutilized and wasted parts of the cacao fruit. When lockdown hit, Blue Stripes quickly turned to retail, offering a line of 15 SKUs including granola, trail mix, fruit smoothies and chocolate bars with cacao flour. Blue Stripes now sells its products online on its website, Amazon, and Thrive Market, and in-store in Whole Foods and Erewhon. 

Esports energy drink brand G FUEL has added a new Lighting Lemonade flavor to its caffeine-free, Hydration line in collaboration with Marvel Studios’ Thor: Love and Thunder. G FUEL Lightning Lemonade will be available on the same date the movie is launched, July 8. It will also be available in a special limited-edition Collector's Box, which includes a character-embossed Shaker Cup. Lightning Lemonade is G FUEL's third Hydration collaboration with Marvel Studios, following its Moonberry flavor inspired by Marvel Studios' Moon Knight, and Orange Madness inspired by Doctor Strange in the Multiverse of Madness. G FUEL’s Hydration line is calorie and sugar free and contains amino acid L-Tyrosine, vitamins C, E, B12 and B6, and electrolytes to promote hydration.

Canadian-based, BFY energy drink brand Joyburst has launched in the US market. Joyburst energy drinks are powered by naturally derived green tea caffeine, made with plant-based ingredients, and contain zero sugar and calories. In celebration of the launch, Joyburst has partnered with 90s rapper Vanilla Ice to release a new ‘Vanilla Ice’ flavor and 90s inspired song ‘Joyburst’. Joyburst will also release its alcoholic version Vanilla Ice Party Seltzer in select states across America. The Vanilla Ice Energy Drink will join the Elderberry, Frosé, Grape, Lime, and Peach flavors on the shelves of select Walmart and Costco locations.

Florida Food Products is expanding into the beverage market with its recent agreement to acquire Javo Beverage Co. Javo uses proprietary technology and product development processes to create coffee, tea, RTD, alcohol, and functional beverages for the food and beverage industry. FFP aims to use Javo’s manufacturing capability to drive a series of innovative product launches. Specific terms of the deal were not disclosed, but the transaction is expected to close in Q3. In 2021, private investment company, Ardian, acquired a majority stake in FFP from MidOcean Partners and established a new partnership that has gone on to acquire Comax Flavors and T-Bev Inc. Over the past year, FFP has doubled its revenue, now approaching $300 million.

Canadian-based cannabis-infused beverage company Truss Beverage Co. is launching 15 new flavors for summer. The new launches include high dosage sodas in Cream Soda, Root Beer, Orange and Cola flavors and Celtzers (cannabis-infused seltzer) in Lime and Raspberry. Truss is also launching Doppelrädder and Sour Razpaartner, a non-alcoholic, cannabis-infused take on Radlers and Sours beer. This particular launch caters towards the consumer demand for cannabis beverages as an alternative to alcohol. Cannabis beverages started hitting shelves in Canada in 2020, but saw slow initial growth due to the pandemic, high prices, and legislated limits on potency. Now, the category is rapidly gaining traction, with a current annual growth rate of nearly 50%. Truss is currently the top cannabis beverage brand in Canada and holds 37% of the growing Canadian market. With its latest launch, Truss now has the largest cannabis-infused beverage line in Canada, with over 30 different products across 6 different brands, including a high dosage brand, CBD brand ,and premium craft brand.