The Rise of Functional Smoothies

Functional smoothies are on the rise in an attempt to reinvigorate juice in developed markets. Smoothies can be marketed with the added benefit of blending the whole fruit and hence increasing the fiber content. North America and Western Europe have been the focus of this innovation, as leading beverage companies and smaller players alike compete to offer smoothies which have specific health benefits, alongside the almost ubiquitous “two of your five a day” message. PepsiCo’s Naked, for example, continues to do well in the U.S., with its Machine and Protein variants and The Coca-Cola Co’s (TCCC) Innocent launched its Super Smoothies in the U.K. in March 2014.

However, the fortified/functional (FF) 100% juice category—into which these smoothies fall—posted a relatively static performance globally over 2008-2013, with a current value CAGR of just 1%, equivalent to absolute growth of $82 million. Nevertheless, with the rise of high protein, immune and energy-boosting smoothies, among others, they could provide an alternative to dairy-based shakes and standard 100% juice.

Pepsi vs. Coca-Cola
TCCC’s Innocent had an 11% share of not from concentrate 100% juice in 2013, up from 7% in 2008. The greatest rise in its share has been since TCCC bought a majority stake in the brand in 2010. With Innocent’s latest launch of functional smoothies in the U.K. in 2014, the Super Smoothies, TCCC’s commitment to the brand is stronger than ever. Innocent has moved away from simply offering natural 100% juice products to offering ones with additional health benefits and making use of the EU’s Article 13.1 General Health Claims.

The range contains three variants: Energise, with added guarana and vitamins including B6 and C; Defence, with vitamins C, D and zinc; and Antioxidant, with vitamins C, E and selenium. In addition to the added vitamin and minerals, the smoothies also contain milled flaxseeds that are high in protein, fiber and short-chain omega-3 fatty acids, which further add to the product’s health attributes.

TCCC’s biggest rival, PepsiCo, is also heavily involved in functional smoothies. However, its sales are generated primarily from North America. Naked offers a variety of different functional smoothies including a high protein variant—each 450 ml bottle contains an impressive near 32 grams of soy protein isolate and whey protein concentrate combined. In comparison, in-vogue breakfast drinks, such as Weetabix’s new Weetabix on the go contains 9.5 grams per 250 ml. High protein juice-based drinks could particularly target female consumers looking for alternatives to protein shakes, as well as the aging population who can gain a multitude of benefits from a nutritionally-dense product.

Alongside its high protein range, Naked’s Machine variants contain a range of added value ingredients from the more basic vitamins and minerals to blue green algae, garlic, wheatgrass, spirulina and again, short-chain omega-3 fatty acids from flaxseeds, for example. These ingredients have been linked to dietary benefits ranging from cardiovascular health to digestive health, hence adding value for the informed and health-conscious consumer.

Smoothies Gaining Share from Juice
As 100% juice consumption falls, smoothies are gaining share in both the U.S. and the U.K. since 2009, reaching 7% and 4%, respectively, in 2013. However, PepsiCo’s advantage is that the U.S. smoothies market remains significantly larger and stronger than in the U.K. In the U.K, smoothie sales reached $284 million in 2013, but are yet to return to the 2008 retail value of $324 million. In comparison, U.S. smoothies witnessed an increase of $447 million since 2008, to reach $766 million in 2013. Perhaps Innocent’s new Super Smoothies could be key to breaking the U.S. market.

Smoothie’s Share of Juice Retail Value in the U.S. vs. the U.K., 2008-2013 

Sugar Remains High
An obstacle to the success of functional smoothies will, of course, be the high sugar content. Despite both PepsiCo’s and TCCC’s smoothies providing a long list of health attributes, they still contain a large amount of sugar. Innocent’s Super Smoothies contain 50 grams of sugar per 360 ml and Naked’s Machine range contains in the region of 25 grams per 240 ml. In order for these drinks to move past the critics, the sugar content will need to be reduced, either through the increase in vegetable content or through the addition of water.

Niche Players & Foodservice Increase Offerings
It is, however, not only PepsiCo and TCCC that are offering functional smoothies. Savse, a vegetable-based smoothie company—with ingredients such as broccoli, kale, spinach and avocado—has increased its presence in foodservice outlets and retailers alike in the U.K. Savse uses high pressure processing (HPP) to pasteurize the juice allowing it to also capitalize on the growing raw food trend, while Pret A Manger launched its Super Smoothie—containing avocado, spinach and cucumber among other fruit—in January 2014.

In the U.S., Soyummi Foods has launched COGO smoothies, based on coconut milk, quinoa, millet and inulin. With no end in sight for the demand for drinks with additional functional health benefits, it is likely that the functional smoothies category will grow, as larger companies and smaller, purely health-focused manufacturers, continue to compete for those consumers moving away from conventional 100% juice. 

For further insight, contact Diana Cowland, Senior Health and Wellness Analyst at Euromonitor International, at [email protected].