Bioande sells 500 million units worldwide per year, mainly in Europe.

Bioande sells 500 million units worldwide per year, mainly in Europe. Photo: Supplied

Coca-Cola Amatil (CCA) is facing new com­petition in the soft drinks market – not from traditional rivals Pepsi or Schweppes but from trendy German bottler Bionade GmbH. Bionade is taking advantage of the lack of innovation in the fizzy soft drinks market by adding an organic cola to its range and expanding into distribution channels dominated by CCA and Schweppes.

Part of Germany’s Dr Oetker food group, Bionade is the market leader in the “healthy” soft drinks category in Europe and sells about 500 million bottles a year, mainly in western Europe.

It has developed a cult following among German and Dutch expatriates since arriving in Australia a few years ago, but has a low profile in the mainstream commercial beverages market.

Karsten Knorr, director of Drinks Beverage Logistics, secured exclusive distribution rights two years ago and, through third-party distributors in each state, has been selling Bionade in health food stores and gourmet food shops. Now he is expanding and is in early talks with supermarket chains about stocking the beverage in health food aisles, differentiating it from sugary ­carbonated soft drinks such as Coca-Cola, Pepsi and Sprite.

Bionade, made from water, sugar, malt and natural flavours, is brewed like beer but is non-alcoholic and has one-third to one-fifth the sugar content of traditional soft drinks.

The Coca-Cola Co tried to buy the Bionade brand in 2004 for €100 million and launched a copycat drink reduced-sugar drink called Spirit of Georgia in 2007 and another called Tumult in 2010, but neither have taken off.

Demand for reduced-sugar options

Mr Knorr believes Bionade could fill a gap in the Australian soft drinks market as increasingly health-conscious consumers move away from high-sugar and artificially sweetened beverages. Carbonated soft drink volumes have been falling for the last few years, squeezing earnings at CCA and Schweppes Australia. “The good thing for us is that within that category there is no competition,” Mr Knorr said.

“In Germany Bionade developed a whole new range of products and it’s now the term for a whole new generation of products. In Australia there is huge demand for healthier options, especially healthier drink options.”

Mr Knorr expects Bionade sales this year to reach 1 million bottles and wants to start manufacturing in Australia when sales reach 3 million. “We are still under the radar of Coca-Cola, but from my perspective Coca-Cola is coming to the end of its life-cycle,” he said.

“It was a great product in the last 30 years but they didn’t realise that consumers are asking for new alternatives . . . There’s no innovation in that company any more. From my perspective they’re not listening to the consumer and not bringing innovation into the market. That’s why I see a fair chance for Bionade to compete against CCA.”

Bionade’s marketing budget is a ­fraction of that at Coca-Cola, one of ­Australia’s biggest advertisers. Drinks Beverage Logistics is relying mainly on word of mouth, tastings, and social media marketing to spread the word.

Working with social analytics company Digivizer, the company has identified 300,000 potential consumers and is marketing Bionade directly to about 10 per cent of that group, hoping these people will in turn influence other consumers. “Working with the brief we developed with Karsten [Knorr] and using clever algorithms, we’ve identified the right people who are having the right conversations relating to this sort of product,” said Digivizer’s head of customer engagement, Alan Smith.

“It’s almost the inverse model of traditional advertising – to reach as many people as you can and hope some of them connect.”

Digivizer used this technique to introduce the successful Greek yoghurt brand Chobani to Australian consumers.