Beverage Trends

Health and wellness continue to drive change throughout the beverage industry as consumers look to beverages for improved energy, stress reduction, digestion benefits, and extra nutrients like vitamins, minerals, and protein. This year’s trends include matcha, drinking vinegars, hybrid beverages, and clean label energy drinks.

The beverage industry continues to evolve as it addresses consumers’ growing interest in health and wellness. Juice and soda sales have slowed, and milk sales are declining, while bottled water has become the most popular ready-to-drink beverage among adults. Ready-to-drink coffees and teas also continue to do well.

Since consumers have come to expect more than just hydration and nutrition from their beverages, those that offer a health benefit are getting their attention. But a good nutrition label and ingredient statement are not the only criteria for purchase. Consumers expect great taste and love to try new flavors.

1. Plant-Based Milks

The global dairy alternatives market grew by 20% from 2012 to 2016 and is expected to hit $16.3 billion this year, according to Innova Market Insights data presented at last year’s IFT Food Expo.2 A category that began as soymilk and rice milk for vegans and those with milk allergies has transformed into a healthy lifestyle beverage category that includes almond milk, coconut milk, and even pea milk.

Though Almond Breeze exemplifies the power of specialization, Silk (once synonymous with soymilk) has come to dominate the plant-based milk category, having quickly adapted to add almond and coconut milks to its portfolio, in addition to blends and creamers. Ripple is the new kid on the block with pea milk, which is now available in a variety of packaging, including single-serve bottles and aseptic packages.

The future continues to look bright for plant-based milks. Taste is the main motivation for purchasing plant-based milks, and consumers are attracted to anything new in the segment. Specialty nuts like hazelnut and macadamia are poised to do well, along with plant-based milk blends and higher protein versions. For plant-based milks, consumers are checking the nutrition label primarily for protein, fat, and calories.

2. Matcha

A 2017 Grand View Research report forecasts that the 2.6 billion dollar global matcha market will grow 7.6% by 2025, due to growing consumer interest in health along with increasing awareness of matcha’s health benefits.3 Produced primarily in Japan, this shade-grown specialty tea is becoming known for its high antioxidant content.

The key consumer markets for matcha are the U.S., Canada, the UK, France, Germany, and Australia, where food choices are increasingly being used to manage and help prevent chronic health problems. Matcha’s main antioxidant is EGCG (epigallocatechin gallate), which is used in many nutrition supplements. Also, matcha has high levels of amino acids compared with other teas.

Unlike other teas, this tea leaf is ground into a powder, making it simple to add to beverages, as well as to foods. In water, matcha forms a suspension that can form a good foam when whipped. A range of viscosities are possible, depending on the amount of matcha used. While hot matcha tea is traditional, iced matcha is growing in popularity. Besides providing health benefits, matcha contributes a vibrant green color and a vegetal taste with some sweetness.

3. Kombucha

Kombucha is a fermented tea touted for health benefits stemming from its probiotic content. To make kombucha, sugar and cultures are added to brewed tea. The culture used is known as SCOBY, the acronym for “symbiotic colony of bacteria and yeast.” After a few weeks of fermentation (which allows the sugar and pH to drop), the beverage is filtered and then flavored with fruit juice or herbs.

Kombucha is available in single-serve bottles and increasingly can be found on tap at supermarkets, co-ops, restaurants, and in university cafeterias. This tart, sparkling beverage makes a unique base for traditional juice flavors like grape, apple, or blueberry. Kombucha flavored with herbs, spices, or flower extracts are also popular, especially basil, ginger, cinnamon, and jasmine.

4. Drinking Vinegars

Taking its cue from kombucha, drinking vinegars have also sprung up as ready-to-drink beverages. Often apple cider based and with a little added sugar, drinking vinegars are appealing to consumers who shy away from super sweet beverages. These consumers do look at sugar content on the nutrition label. Unique flavor combinations, such as strawberry-balsamic and lemon-cayenne, are a draw for consumers.

5. Cold Brew Coffee

The cold brew coffee craze won’t be cooling down any time soon. Cold brew is now available in single-serve ready-to-drink formats, as a concentrate, and even on tap at some supermarkets and cafes. The long steep (from hours to days) and low brewing temperature (which impacts the solubility of coffee’s various flavor compounds) are responsible for this coffee’s unique flavor profile.

Cold brew coffee is usually described as sweeter, less bitter and acidic, and with an overall milder flavor than hot brewed coffee. This provides a healthier option for coffee drinkers who typically rely on cream and sugar to make hot brewed coffee palatable. Starbucks is popularizing nitrogenated (“nitro”) cold brew coffee, which seems sweeter still and has a smooth, velvety mouthfeel.

6. Hybrid Beverages

A hybrid beverage is a cross between two (or more) different beverage types. The leading hybrid beverage in the U.S. last year was nutrient-fortified water, followed by carbonated juice. Juice and soda sales have stagnated as consumers seek healthier beverage options, especially those with less sugar and added functional ingredients, such as vitamins, electrolytes, antioxidants, and protein.

According to Beth Bloom, Senior Food & Drink Analyst at Mintel, “Our research indicates that for the majority of consumers, the ideal hybrid drink would have a juice base, would contain vitamins and minerals and would be packaged in a plastic bottle. Following those leading areas of interest are a wide variety of attributes, as well as drink and packaging types, that could find appeal among consumers. Positioning these drinks in retail locations that attract grab-and-go shoppers can ensure maximum exposure.” 4

Examples of hybrid beverages include juice-water blends, protein water, vitamin water, dairy-based energy drinks, and coffee-tea blends. Although the possibilities seem endless, Mintel has identified the type of hybrid beverage most likely to succeed in today’s market:

Mintel’s research shows that hybrid beverages are often consumed in the afternoon, pointing to their use as a pick-me-up. Hybrid beverages are also consumed on-the-go and as a treat. Both function and flavor are key drivers of hybrid beverage use.

7. Energy and Sports Drinks

According to a 2017 Packaged Facts Report, energy and sports drinks in the U.S. market reached $25 billion in 2016, growing 7% in the preceding five years.5 The growth during that time was largely driven by consumers looking for beverages with functional benefits, as well as those seeking healthier alternatives to soda. The report notes that the abundance of unique flavors in energy and sports drinks is also a major factor in attracting consumers.

The consumer group most likely to use energy and sports drinks are millennial men and women, with millennial women consuming more sports drinks than men. Having children in the home was found to correlate with energy and sports drinks consumption. Consumers of energy drinks, in particular, were much more likely to have young children at home. In the 50-and-older category, women were found to have higher energy drink consumption than men. Energy drinks were also found to appeal to coffee and tea drinkers, a segment already accustomed to using beverages for an energy lift.

As sports drinks go mainstream, the category is transforming to accommodate the needs of consumers who are less active than athletes but still interested in beverages with health benefits. New sports drink launches are now more likely to have reduced sugar, clean labels, and functional ingredients, especially amino acids and botanicals. Mainstream sports drink users are checking the nutrition label for sugar and calories.

What’s Next?

With health and wellness front and center, other beverages to watch for include veggie-fruit juice blends, drinkable soups, drinkable plant-based yogurts, and new herbal teas like mamaki. While healthy beverages certainly include beverages with vitamins, minerals, antioxidants, omega-3s, protein, and beneficial botanicals, the concept also encompasses beverages that strive to keep sugar, fat, and calories low. With that in mind, flavored waters of all types are poised to do well, including maple water, aloe water, herb-infused water, and flavored coconut water.

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