From the rise of premiumisation to functionality, sustainability and convenience, brands continue to innovate to maintain their popularity in the global beverage market.
FoodBev has provided a breakdown of five beverage trends that have become evident this year and will likely continue into 2021.
Premiumisation and the rise of rum
Premiumisation is an ongoing trend across many categories of the global beverage industry. Spirits, in particular rum, is one such area expected to dominate this segment in future months.
According to the Wine & Spirits Trade Association, the flavoured and spiced rum category grew from under 6 million bottles in 2014 to over 10 million bottles in 2019, an increase of almost 80%. With this in mind, and knowing consumers are turning to quality over cost, larger corporations are releasing more premium, high-quality rum variants.
Furthermore, GlobalData recently noted that the rum market’s value in the UK grew at a CAGR of 7.5% between 2017 and 2018, almost double that of gin sales, which saw a 3.8% growth during the same period. Kopperberg, for example, recently entered the rum market with their new cherry spiced rum, whilst Deadman’s Fingers introduced a pineapple variant earlier this year.
This shift in demand for higher quality beverages is evident across the board. Not only are spirits showing growth, but so are ready-to-drink (RTD), beer and soft drink segments, with the Bacardi 2020 Cocktail Trends Report noting a 26% increase in vodka soda and flavoured RTDs in the US. Consumers are becoming more sophisticated drinkers, looking for authenticity and wanting more for their money. They appear to be searching for more luxury experiences both in the home and out.
Hard seltzers have shown exponential growth in the US, and it seems the UK is following suit. Anheuser-Busch expanded its portfolio with the introduction of a hard seltzer brand, Social Club Seltzer, aimed at more sophisticated drinkers, while Carlton & United Breweries recently launched their first ever hard seltzer brand, Actual, in Australia. Premium mixers are another category on the rise, where consumers are willing to pay a price reflective of high-quality beverage ingredients; often botanical or herbal flavourings.
It seems that consumers are drinking fewer, but more superior, premium beverages, adopting a ‘less is more’ attitude. Clearly, consumer values are being redefined with a focus on quality, longevity and sustainability.
Health and wellness remain at the forefront of the beverage industry as many consumers turn to healthier options in the wake of Covid-19. There is a clear focus on products that support both physical and mental health. As a result, beverage companies are innovating with new ingredients to produce products that can offer functional benefits. According to KPMG Insights, the global functional beverages market size is predicted to rise to $208.13 billion by 2024, with a CAGR of 8.66% in the period of 2019-2024.
The market is seeing an increasing number of brands incorporating both essential ingredients, such as vitamins and nutrients, as well as more specialised add-ins such as adaptogens, CBD and probiotics, into their beverages. A variety of benefits include energising or relaxing properties, cleaner ingredients, aids for sports performance, improved digestive health, mood boosters and stress reducers.
Chobani recently entered the functional market with their plant-based probiotic drinks designed to support digestive and immune health, while Los Angeles-based drinks brand, Neuro, launched a probiotic kombucha aimed at improving digestive wellness earlier this year.
Peter McGuinness, president of Chobani, said: “With every trip to the store, consumers are looking to do more than just fill their bellies. They want healthier foods and drinks to calm their minds, restore their bodies and replenish their energy.”
Cannabis is one additive growing in popularity in recent years, with much research indicative that CBD can offer a variety of cognitive benefits including improvements in sleep, anxiety and depression. Examples of the use of this ingredient include Calm Drinks’ recent launch of a multivitamin, CBD-infused RTD and Trip’s unveiling of a sparkling CBD-infused drink. Interestingly, both products were released in response to rising anxiety amid stay-at-home restrictions during the coronavirus pandemic.
While consumers are clearly willing to spend more, as demonstrated by the rise in premium beverages, they are also fuelling the demand for drinks that offer functionality, too. As a result, next generation beverages will need to address a variety of needs, rather than just focusing on one specific function.
The RTD market has grown exponentially. Beers and wines are no longer the only beverages that come pre-packaged in a can, ready for immediate consumption. According to a recent report by Mordor Intelligence, the global RTD market is projected to grow at a CAGR of 6.1% during the forecast period 2020-2025.
Evidently, snacking drinks and multifunctional food and beverage products are gaining momentum. Consumers are reaching for beverages that relieve hunger while on-the-go and deliver both nutrition and energy. As a result, we are seeing an increase in beverages designed to satiate and satisfy. For example, CTRL’s meal replacement shakes curb hunger and provide vitamins, minerals and probiotics to support a healthy gut.
With physical activity and health awareness on the rise, demand for RTDs such as cold brew coffees and cold-pressed juices is increasing. Convenient cold brews offer instant energy so are increasingly desirable among professionals and fitness enthusiasts alike. They allow consumers to achieve instant satisfaction in a location of their choice. Examples include Illycaffè’s recent launch of its ready-to-drink cold brew coffee and Bottleshot’s new oat m*lk canned coffee.
Massimiliano Pogliani, CEO of illycaffè said: “illy Cold Brew Ready-to-Drink reflects our desire to provide consumers many other occasions to enjoy the taste and the quality of illy coffee, keeping in step with modern consumption trends”.
Sustainability is a critical topic. Arguably, it is becoming less of a trend and is now considered necessary in order for companies to remain at the forefront of competition. According to Mintel, 65% of consumers in the UK and 53% in the US have a preference for products that are environmentally friendly.
Within the beverage industry, energy intensive processes are often used to extract raw products or carry out complex distilling, for instance. However, heightened consumer awareness surrounding sustainability is driving companies to demonstrate more sustainable methods and environmentally friendly ethics.
Many brands are looking for innovative ways to utilise food waste to produce new beverage products. Toast Ale, for example, joined forces with Warburtons earlier this year to launch a beer brewed from leftover crumpets. Similarly, UK-based Dash Water uses wonky British fruit and vegetables that have been rejected by supermarkets to naturally infuse water.
The global beverage market is fast-moving and highly competitive, driving continuous innovation in the packaging category. Typically, beverages are known for their plastic casing, notorious for failing to break down, so brand names are often emblazoned as litter. As a result, both major companies and smaller start-ups are releasing beverage packaging designed to minimise environmental impact, featuring fully recyclable and sustainably sourced materials.
For example, Diageo recently unveiled the ‘first-ever’ 100% plastic-free paper-based spirits bottle made entirely from sustainably sourced wood and is fully recyclable. Evian also launched a fully recyclable bottle with label-free packaging made from 100% recycled plastics, and this release is one step for the company towards becoming a fully circular brand.
While canned wines were perceived as a cheap and convenient option for many years, an increasing number of fine-wines are now being packaged in metal casings. The canned wine category is promising significant growth as consumers look for more sustainable and convenient options. According to Nielson, sales of canned wine in 2019 grew by 79.2% during the 52 week period ending in December 2018. Cans are fully recyclable and lightweight, putting them in the lead when compared to PET and key-keg systems, so are a highly desirable option for the consumers considering their carbon footprint.
Last year saw the launch of Nice canned wines in Sainsbury’s supermarkets, a convenient, quality wine with packaging that offers environmental benefits. Tom Elliot, head of new ventures at Sainsbury’s, said: “Nice is quality wine in a can that has mass market appeal and is 100% recyclable, which made it a no-brainer to Sainsbury’s. We have seen fantastic growth in single formats and convenience, and this category has performed phenomenally in the US.”
This growth continues with Kingsland Drinks having recently entered the canned wine market with a £1.2 million production line, while Molson Coors also launched a new range of canned spritzers.
Have you got a new beverage innovation that’s award-worthy? Enter the World Beverage Innovation Awards 2020 now!
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