The Changing World of Beverages

In 2019, total combined US beverage sales reached over a trillion.  This figure exists in spite of the fact that sales of soda drinks have been declining in the US for over a decade.  Consumers are more aware of the negative health benefits associated with too much soda, and governments have introduced taxes on sugary drinks in an effort to discourage their consumption.  Instead of being defined by soda, the beverage market is experiencing rapid growth and innovation, with the following 5 categories especially high in consumer popularity.

First up is functional waters.  These are herb infused waters that are sometimes sold sparkling.  Functional waters sometimes contain additives like vitamins, acids, minerals, herbs, fruits, and vegetables.  They have more flavor than regular water without the sugar content of soda.  Given their growth in popularity, top soda maker PepsiCo has acquired multiple functional water brands, including SodaStream and KeVita. 

Next is organic beverages.  Consumer preference for organic food has led to a demand for matching organic beverages.  Naturally flavored, sugar free, and caffeine free, these drinks have a market among health conscious consumers pursuing specific wellness goals. 

Third is the ready-to-drink (RTD) coffee market.  Coffee fuels the modern world, and demand for the natural energy drink has increased over time. Consumers can buy RTD coffee in cartons, cans, or bottles.  COVID-19 lockdowns and restrictions have shifted the coffee market to favor at home products, and the need for low sugar or sugar alternatives have led to innovations in the industry. 

Following the coffee market is the tea market.  Health conscious consumers who want to avoid caffeine are choosing herbal teas to provide them that morning energy boost.  There exists a growing preference for herbal and highly oxidized tea types.  Furthermore, cold brews, nitro offerings, functional add-ins, and plant-based milk blends are revamping the cold tea category.

Finally, alcoholic beverage sellers are innovating their products with unique flavors.  Brands are adding good-for-health ingredients and flavors into their RTD products, including apple, tropical fruits, citrus, and berries.  A subcategory of this phenomenon is the mocktail, or alcohol-free mixed drinks.  People who can’t or don’t want to drink can still enjoy the flavor or scene associated with cocktail specialties.  Preference is growing for low- and no-alcohol content drinks because consumers are more aware of the effects of excessive alcohol consumption.  Mocktails aren’t only intended for pregnant women or individuals younger than 21 any longer.