BUSSINESS INFORMATION

United Airlines has signed a five-year beverage agreement with The Coca-Cola Company, making it United's primary soft drink supplier, effective May 1, 2007.
The US-based airline said the new business partnership will give United's customers a choice of eight Coca-Cola beverages - Coke, Diet Coke, Sprite, Sprite Zero, Spring Water, Seagrams Ginger Ale, Tonic and Seltzer Water - while providing both economic benefits for United and joint promotional activities for customers and employees


"We are pleased to partner with a world-class brand such as Coca-Cola, and believe the variety of beverage selections they offer will appeal to our customers' tastes and complement our other onboard food and beverage offerings," said Sean Donohue, United senior vice president - Flight Operations and Onboard Service. "We look forward to the joint promotional activities that consumers and employees will be able to participate in and the economic benefits this new agreement brings to United."

In addition to its onboard beverage offering, United will also offer Coca-Cola products in its airport lounges and offices later in 2007.

Coca-Cola North America is to launch Diet Coke Plus, a sparkling, calorie-free beverage with vitamins and minerals, in the US in April.

According to Coca-Cola, Diet Coke Plus is a good source of vitamins B3, B6, and B12, and the minerals zinc and magnesium, and will be available in retail stores in which other Diet Coke products are sold.

Each eight-ounce serving of Diet Coke Plus includes Niacin (vitamin B3), vitamins B6 and B12, zinc and magnesium (15% Daily Value [DV] for Niacin, B6 and B12, 10% DV for zinc and magnesium).

Diet Coke Plus is the latest offering from the Diet Coke product portfolio, which includes the flagship Diet Coke, Caffeine Free Diet Coke, Diet Coke with Lime, Diet Cherry Coke, and Diet Coke Sweetened with Splenda.

"Consumers, including Diet Coke drinkers, are increasingly looking for more beverage options, and we wanted to offer them the convenience of a calorie-free beverage that is a good source of several essential vitamins and minerals, and one that delivers on the great taste that they have come to expect from us," said Katie Bayne, senior vice president, Coca-Cola Brands, Coca-Cola North America.

The launch of Diet Coke Plus will be supported by an integrated marketing plan to drive awareness and trial. Introductory communications will carry the tagline "Great Taste Has Its Benefits." Diet Coke Plus will be sold across the US in a variety of packages, including 20-ounce PET, 12-ounce can-12 packs, and 12-ounce PET (trial package).

Food and drinks sales have become increasingly important to forecourt sales in recent years. However, forecourt retailers need to carefully select stock as, while consumers seek convenience products, they also want healthy and indulgent options. Retailers that respond to such trends and move away from the traditional crisps and Coke to sushi and smoothies will thus maximize their non-fuel sales.

Service stations have profited from some high-growth areas within the convenience sector as consumers increasingly seek food and drinks that can be eaten on-the-move and fit into their hectic lifestyles. Busy consumers are increasingly parting with their hard-earned cash to buy selected convenience foods and drinks. Cereal bars, functional drinks and chilled ready meals have been particularly high-growth areas across Europe in recent years. All of these categories are also forecast to continue growing at a year-on-year rate of at least 6% over the next few years.

People perceive that they are working long hours and that their lives are increasingly hectic. As a result, they continue to purchase convenience foods and beverages to consume on-the-go or to take home and pop in the microwave.

Cereal bars stand out as experiencing especially strong growth across Europe, and are set to continue to grow at an average annual rate of 7% over the 2005 to 2010 period. Functional drinks, such as energy and sports drinks, represent another high-growth category across Europe, and are forecast to grow at a rate of 6% over the same five-year period.

Consumers increasingly eating out-of-home

Growth of service station shop sales has been bolstered by increasing numbers of consumers eating meals whilst on-the-move. The trend is especially pertinent with regard to breakfasts; across Europe, 7% of all breakfast occasions are taken on-the-move and this proportion is forecast to increase steadily over the next few years.

There has been a rise in so-called 'flexi-eating', whereby food consumption is increasingly adapted to people's needs and lifestyles, rather than people fitting their lives around structured mealtimes. This has led to increasing numbers of consumers eating breakfast whilst on the train or bus or picking something up at the service station on the way to work.

Service station sites benefit from the convenience trend and forecourt retailers already have a large share of the European market for soft drinks, confectionary and savory snacks. Datamonitor's forecourt convenience retailing survey also revealed that oil companies believe that soft drinks and chilled snacks are the most important non-fuel items to profitability and are the most likely to account for a larger proportion of their product portfolio in the future.

Frecourt retailers must respond to evolving consumer trends

Despite seeking convenient food and beverages, consumers also want them to be both healthy and indulgent. However, the problem is that the products people consume on-the-move are rarely simultaneously convenient, healthy and indulgent. This often results in consumers eating in a debits and credits fashion, whereby people move between periods of unhealthy behavior (debits) and healthy behavior (credits) that occur over a given time period.

Snacking occasions are generally either relatively healthy or relatively indulgent, such as crisps or a piece of fruit. As both attributes are seldom available in the one product, consumers often need to choose between the two desires and, more often than not, it is the indulgent varieties of food that are available in on-the-go channels, such as service stations.

The upshot of this is that there is a gap in the market, and, if service stations can offer customers food and beverages that are convenient, healthy and indulgent, they are better placed to maximize the already strong growth of their non-fuel sales over the coming years.

Going forward, the most successful service stations will be those that adapt to changing consumer trends and offer foods and beverages that are convenient, healthy and indulgent. In other words, in the longer term, the emphasis of forecourt retailers' food and drinks offerings will be more about sushi and smoothies, rather than the more mundane traditional offerings.

The health benefits of an ingredient found in cocoa have been deemed so important by a professor at Harvard Medical School, that he claims it should be considered as a vitamin.

After studying the benefits of drinking cocoa, professor of medicine Norman Hollenberg discovered that epicatechin, a compound found in cocoa, tea and wine, can be beneficial to health by reducing the risk of contracting four of the five most common killer diseases.

When conducting a study in Kuna, Panama - where people can consume up to 40 cups of cocoa a week - Mr Hollenberg found that the risk of stroke, heart failure, cancer and diabetes shrinks to just 10%, he told Science & Industry magazine.

According to the magazine, flavanols such as epicatechin are currently removed from commercial cocoas because of the biter taste they can create. If the health claims are confirmed, this provides an opportunity for the development of epicatechin supplements.

Apart from blend, green tea was the leading flavor in new tea launches in 2006, ahead of lemon and black tea. While honey and mint flavors are new to the leader board, two strong performers in 2005, ginger and vanilla, have exited the top rankings altogether.

In a controversial move, fast food juggernaut McDonald's Corporation has started to offer PepsiCo beverages in some of its outlets in the US alongside those from The Coca-Cola Company, which it has sold exclusively since 1955.
At selected outlets, the leading fast food chain is now offering a number of Pepsi drinks, including Lipton Iced Tea, Gatorade and Tropicana orange juice. All products from Coke's main rival are being sold in bottles, cans and cartons, not as fountain drinks. The restaurants, however, are not selling the company's flagship brands, Pepsi or Diet Pepsi.The move comes in response to the growing demand for healthier, non-carbonated beverages. As with its menu, McDonald's appears to be altering its portfolio of drinks to offer healthier options, to ensure footfall does not drop because of shifts in consumer taste.