Page 21 - Food&Drink Magazine August 2019

Last year, the non-alcoholic drinks industry came together in an Australian-first to announce a commitment to reduce sugar by 20 per cent by 2025 across the industry’s portfolio. Across a range of categories, and not just in functional beverages, manufacturers are reducing the sugar content of their products while offering consumers greater choice to suit any lifestyle or occasion.
WATCH THIS SPACE
We will see more product innovationandportfolio renovation, which will introduce additional low and no sugar products as well as unsweetened products in the months and years ahead.
While our portfolio is evolving, we are also interested in the activity in other markets. In the United States, for example, innovation in functional beverages is advanced. It is clear to see that
many manufacturers have seized the opportunity that has been afforded by regulatory change in that market, and we see this in new products that are infused with cannabidiol (CBD).
$1bn
US SALES OF CANNABIS- BASED DRINKS EXPECTED TO SURPASS $1 BILLION BY 2023
CBD is the second most prevalent active ingredient of cannabis, although by itself it does not cause psychoactive effects or ‘dependence potential,’ according to a report by the World Health Organisation. For manufacturers right across the US, this development heralds a new economic period in the life of the drinks business.
Zenith Global indicated recently that US sales of cannabis-based drinks were worth $86 million in 2018 and sales are likely to surpass $1 billion by 2023, jumping to around $1.4 billion by 2024. Clearly, while it is tempting to latch onto this beverage trend in a wider industry that is expected to be worth $25 billion by 2025, there are many challenges that come with developing such a product and many more associated with generating a profit from its sale.
Currently, while there is much interestinthisspace,Australian manufacturers face a bureaucratic obstacle course. Under the UN Single Convention on Narcotic Drugs, to which Australia is a signatory, cannabis products cannot be used for non-medicinal purposes. The permission for products using hemp seed oil is a different matter.
At least one Australian company applied to the Office of Drug Control for a
licence to export CBD oil from Australia, but this was rejected. Last year the World Health Organization reported that pure CBD should not be treated as a narcotic and the UN is reviewing CBD classification under international drug treaties, so watch this space. For the time being, however, the increasingly competitive functional beverages sector
in Australia is likely to focus on new product development, particularly in health-related functional beverages to
meet a sustained increase in healthconsciousness. ✷
✷ ABOUTTHEAUTHOR
BY ASSOCIATION
Geoff Parker is the CEO of the Australian Beverages Council. The Australian Beverages Council is the peak industry body representing the non-alcoholic beverage
industry. Collectively its members product more than 95 per cent of the industry’s volume.
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