Beverage sales are rising. And as in all segments of the food industry, certain products are experiencing more growth than others and consumer preferences continue to change with the times.
What can beverage producers expect in 2016 and beyond? Keep reading to find out.
Healthy takes center stage
For its annual “New Product Development Outlook,” Beverage Industry surveyed industry professionals about what they expect to be the biggest trends for new beverage products.
The top 5 anticipated trends all relate to health:
Meanwhile, functional beverages are losing popularity. While “energy boosting” and “cognitive health” found their way into the top 10, high-protein (ranked #1 in the previous year), probiotic/prebiotic (previously ranked #6), and vitamin- and mineral-fortified (previously ranked #10) all lost their top 10 spots.
These trends jibe with an analysis from Coca-Cola HBC, which operates across 28 countries including both established and emerging markets. They report increased demand for low- and no-calorie beverages, as well as significant growth in the market for still drinks like water and juice.
Here's how companies plan to respond to this trend according to the results of the Beverage Industry study:
- 83% of respondents will use natural flavors and 80% will use natural colors. These both represent an increase from the previous year.
- 40% say their companies will develop new products in the water and juice categories.
Alcohol and spirits sales continue to soar
In February, the Distilled Spirits Council released a report showing strong growth in spirits volume, revenue, exports, and market share. They attribute this trend to the drinking habits of Millennials, the growth of craft and artisanal products, and the popularity of “cocktail culture,” among other things.
Companies are looking to new products to meet this need. In the Beverage Industry study above, more than half of respondents said their companies would likely develop new wine, beer, and spirit products this year.
Demand is growing for premium products
Premium products can hardly hit the shelves fast enough. We explored this trend earlier this year in an interview with Tree Top's Andy Juarez, who noted that consumers want fresher, less processed juice products that more closely resemble the fruits they come from.
Other beverage sectors are experiencing this phenomenon as well. For example, “super premium” whiskeys were the growth leaders in the whiskey category of the Distilled Spirits Council report. Their volumes were up 25.2% and revenue up 26.5% in 2015 compared to the year before.
Gary Hemphill of Beverage Marketing Corporation noted in Food Business News that niche and premium products are expected to continue growing in 2016, especially in certain categories. For example, “while the overall fruit beverage category has struggled in recent years, the super premium segment is experiencing growth,” he says. “The products tend to be expensive, but they target a higher-end consumer who can afford them.”
Packaging matters — a lot
Finally, the packaging for beverages has a clear impact on purchasing decisions. Here are a few data points from research by the Can Manufacturers Institute and consulting company FoodMinds:
- 85% of consumer believe cans protect the “taste experience” of a beverage
- 53% of adults, and 74% of frequent beverage consumers, rate packaging as very or extremely important in their beverage choices
- Consumers also prize sustainability and fancy graphics
Implications for beverage processors
Overall, the data suggest the beverage industry should jump on the healthy bandwagon with fresher products and cleaner labels. And the Beverage Industry report suggests they are doing just that by moving toward natural and organic ingredients.
Beverage companies should also take into account the demand for convenient packaging and product variety, as well as looking at developing more premium and “super premium” options across all of their beverage product lines.