Natural ingredients. Soda’s decline. The rise of energy drinks, dairy alternatives, and ready-to-drink tea and coffee — manufacturers are already aware of major movements sweeping through the beverage industry. But lesser-known trends are poised to be just as disruptive.
Manufacturers looking to make on-trend beverage products this year are turning to food trends for inspiration, such as exotic spices, protein, and meal replacements. Other times, manufacturers already have a solid concept but find ways to enhance the ingredients and experiential properties of those concepts. This could be through processing methods or removing controversial ingredients like sugar and alternative sweeteners.
As they explore these trends, however, companies that stand out from the rest will maintain their focus on providing the flavors and textures consumers want while delivering on added bonuses like clean labels and functionality.
Different, but not too far
Several fast-growing beverage segments have ingredients that are different but not too far removed from beverages that have been popular for years, if not decades.
"The ones that seem to be benefiting the most are those that are premium or natural positioned in some way, but they’re really close to what you’re used to," Brian Reed, principal of market structure at IRI Worldwide, told Food Dive. "Those kinds of products are the ones that are winning faster because they’re closer to what people are used to, but they’re an alternative to what things were in the past."
Sparkling water as a soda alternative is one clear example. Sparkling water category sales in the U.S. increased 16.2% to more than $1.4 billion in the 52 weeks ending July 12, according to IRI. Sparkling water still offers the flavor varieties, carbonation, and single-serving aspects of soda. But it often doesn’t include the same high levels of sugar or artificial sweeteners that consumers associate with soda, Reed said.
Several soda companies have recognized this consumer shift and adapted. After rebranding as a sparkling water maker last year, SodaStream announced a profit turnaround in its latest earnings report. Even Coca-Cola debuted a sparkling version of its smartwater brand to better compete in this growing category. PepsiCo introduced a sparkling variety of Aquafina in 2013 but discontinued the product last summer to focus in on noncarbonated bottled water instead. As a leader in RTD tea, PepsiCo has remained on-trend for recent beverage movements and so may attempt sparkling water again in the future.
Spicing things up
Spices have moved beyond meats, seafood, and vegetable dishes, as more manufacturers use spices to add flavor and/or heat to their beverage varieties.
"Spice in beverages is fairly well established, but brands are getting bolder with their blends as consumers become more familiar with drinking spices and are ready to take it to the next level as this trend continues to mature," Ilana Orlofsky, marketing coordinator at Imbibe, told Food Dive.
Using spices provides the natural flavors consumers are looking for and can also help companies differentiate their beverages from other products.
Turmeric is one spice receiving extra attention. It’s been included in spice and flavor blends for new products from smaller brands like Temple Turmeric and Pok Pok Som turmeric soda, which is a finalist for the NEXTY Awards at this week's Expo West. But larger juice makers like PepsiCo’s Naked Juice brand are also featuring turmeric and other spices in their beverages.
Consumers aren't likely to see major manufacturers' flagship products include these more exotic spices yet (Cayenne Coke, anyone?). But the smaller beverage companies that Coca-Cola and PepsiCo have bought in recent years are a breeding ground for experimentation with spices and flavors that could eventually make their way into varieties for the larger brands.
Athletes and other consumers are looking for more functional beverages to fuel their workouts, a trend named in a Mintel report released last year. In response, protein is moving into the beverage market after already establishing itself as a functional food ingredient in products like meat snacks.
Manufacturers large and small have embraced the protein-infused beverage trend, but growth opportunities have expanded as plant-based proteins like pea and chickpea offer textural and even taste benefits that other sources of protein don’t. Probiotic juice producer GoodBelly introduced a line of RTD protein shakes earlier this year that combine the brand’s probiotics signature with high levels of plant-based protein.
But Campbell recently demonstrated the difficulties beverage makers find in the protein drink segment. After debuting its V8 Protein line of shakes in late 2014, the company announced it would discontinue the protein shakes earlier this month because they "were not differentiated enough" from other protein-based products.
Because protein is already well-established in food products, consumers have come to expect more from manufacturers than just adding protein to a chocolate shake and calling it a functional beverage. To avoid V8 Protein’s fate, protein beverage makers may aim for a combination of appealing flavors that stand out on the shelves and unique protein sources that catch a consumer’s eye and/or offer other health benefits.
Also, extra investment in packaging and marketing messages that emphasize functionality and flavor can take that product one step ahead of the competition.
The pressure is on
High-pressure processing hasn’t gone completely mainstream, with only about 114 HPP machines in the world as of last August. Cold-pressed juices and cold brew coffee, which both use this technology, are gaining speed in the beverage industry.
Last month, cold-pressed juice makers Daily Greens and Nomva closed on investments of $5.5 million and $3 million respectively, signaling interest from investors in this product and technology. Major manufacturers also see the potential gains, with Coca-Cola acquiring a 30% stake in Suja last August.
Cold brew coffee has seen the same successes in recent years. This segment reported 115% growth rate from 2014 to 2015, according to Mintel. Since 2010, that growth rate has been 339% through estimated totals for 2015.
The use of HPP for cold-pressed juices and cold brew coffee coincides with the shift to natural beverages. This processing method doesn’t require that manufacturers use the same preservatives and chemicals needed to maintain food quality during other methods of processing.
Food and beverage hybrids
Soylent meal replacement powders may see increased competition this year. With consumers’ demand for convenience reshaping the food and beverage landscape, drinkable meals and snacks will come to the forefront.
Orlofsky wrote in a report that manufacturers will be incorporating more vegetables, legumes, and grains into beverages, such as lentils and chickpeas or global grains like quinoa, amaranth, farro, and kamut. If snacks can serve as meal replacements, beverages can also become a stand-in for snacks and meals once manufacturers determine the best ingredients to use and best ways to make flavors and textures more palatable.
"Above all else, a great tasting product is key," said Orlofsky. "Consumers are willing to increase their taste threshold in order to get nutritional and/or functional benefits, though taste is still the main sales driver. A product that tastes great and is able to address the dietary needs of consumers will likely have promise in the marketplace."