The healthy-eating wave has hit Singapore and recent Nielsen survey data suggests that it will be here to stay. Nearly two in three (62%) consumers surveyed wanted to eat healthily in an effort to maintain their health and wellness, and of these consumers, 67% cut down on carbonated soft drinks and 61% on sweetened beverages. While the concept of dieting for health is nothing new, a rise in consumer awareness of the role that beverages play in wellness is creating a new opportunity for manufacturers and retailers in the category.
Evidently, it’s not just food that Singaporeans take note of in their diet. Beverage consumption plays a huge part in a consumer’s eating (and drinking) habits too. For a third of health-conscious Singaporeans (32%), it’s a must for their beverage choice to have no additives and no artificial coloring.
On top of the health aspect that both consumers and retailers are aware of, the average person consumes three beverages per day, excluding water, which emphasizes the importance of beverages in our daily lives. In fact, the beverage category is the fastest growing (+3.7% value growth versus a year ago) among all FMCG goods, so all the more retailers and brands have to compete for the consumer’s beverage attention.
The opportunity for beverage manufacturers and retailers is clear. Only those who understand what factors are coming into play and how to embrace these changes will fully seize the growth in this popular category. It is imperative to understand when consumers are drinking their beverages, how cohorts consume differently and the intricacies of the shifting landscape.
Not all beverages were created equal
Occasions matter when it comes to beverage consumption. The top three beverages consumed by Singaporeans on a daily basis are coffee (28%), tea (18%), and dairy (12%), but all of them are consumed on different occasions. Coffee (43%) is the most popular beverage for starting the day with, followed by dairy (28%), whereas tea is consumed to start the day off, complement meals with, improve digestion, or as a pick me up – thereby proving its versatility.
Although breakfast is the most important occasion of the day and more than half of these occasions are in-home (56%), there are still opportunities to win beyond breakfast. One in four Singaporeans (27%) consume beverages out-of-home (in school, office, or elsewhere) during lunch, between lunch and dinner, and dinner.
Consumers do look for drinks that satisfy their craving, or an indulgent treat that will make them break their “healthy” streak especially after lunch, serving a great opportunity for in-between meals.
Sugar vs taste: Striking a balance
The nation is determined to reduce diabetes, and has passed beverage-based legislation to help curb it. Last year, the government announced a ban on advertisements for packaged drinks with very high sugar content and a compulsory mandate for color-coding labels on unhealthy drinks, which will come into effect in 2020. Consumers will no longer have to intently read labels to identify which drinks are healthy, increasing the pressure on manufacturers to strive to achieve a balance between reduction in sugar and taste.
Three in four Singaporeans actively avoid drinks that are high in sugar, but it’s not surprising that the 55+ age group is the most health conscious among all. Older consumers seek healthier choices in a bid to improve cardiovascular health and lower cholesterol levels. However, 61% of consumers across age groups look out for healthier choice labels before purchasing beverages.
Nutritional labels have to be easy to locate and understand and sugar information should be positioned in an intuitive and informative manner. The key to closing the gap between intention and action for healthier eating lies in changing the perception of beverages with reduced sugar. Product samplings, where consumers can try drinks for themselves can be effective if the product delivers on claims. Consumers already have the intention to make healthier choices – brands simply have to guide them to their product by allowing no-risk trials.
It’s easier said than done. Beverage brands and retailers will face difficulties creating a drink that’s indulgent yet healthier, so they may need to innovate in order to combat this. We know that consumers are not only eating, but also drinking their snacks. Indulgent categories such as bubble tea, carbonated soft drinks, and alcohol are more likely to be purchased on the go from food service outlets.
The bubble tea craze in Singapore can be attributed to younger consumers enjoying the novelty of customization, its indulgence factor, and convenience. Despite bubble tea being known for having high sugar levels, it is precisely because of this that one in two consumers appreciate the drink’s customization aspect. If more than half (53%) of bubble tea consumers consider sugar level in their decision-making, there is a huge opportunity to tap on this interest in customization and present healthier drink options to consumers.
The tea category, especially bottled green, black, and oolong tea, is an example of how non-sugared options are gaining popularity. For a short-term boost, consider innovative flavours to attract consumers and continue to communicate the health benefits of drinks with reduced sugar. What’s more, younger consumers aged 16 to 24 who prioritize convenience buy beverages for immediate consumption, which gives brands a chance to promote bundled purchases in supermarkets, convenience stores, and hawker centres.
Moving forward, it would be good for manufacturers and relevant authorities to work together by leveraging ongoing Smart Nation initiatives or grants that may aid in raising their innovation budget. Beverages have to be more innovative now in order to cater to varied tastes and healthiness levels. Singaporeans are faced with a myriad of beverage choices; retailers and manufacturers who can help consumers make healthy choices easier are best-positioned to stand out from the sea of options.
The insights in this article were derived from:
- Nielsen Share of Throat Syndicated Report 2019, Total of 478 respondents, Surveyed over 3 days in October 2019
- FMCG Trends Singapore Q3 2019