Dive Brief:
- The kombucha market increased nearly 41% to $534 million wholesale last year, a recent report from the Beverage Marketing Corporation said, according to Beverage Industry.
- PepsiCo Inc. recently announced it was acquiring KeVita Inc., a producer of fermented probiotic and kombucha beverages.
- Roger Dilworth, senior editor at Beverage Marketing Corporation, told Beverage Industry he thinks this trend has some staying power. “Categories in the past, such as vitamin waters, have promised health, but don’t really deliver; consumers seem to perceive something about kombuchas that makes them feel better,” he said. “It has an association with probiotics even though it might not exactly fit into that strict definition, but people seem to feel a detox or ‘stomach-friendly’ effect.”
Dive Insight:
The popularity of kombucha, a fermented tea drink, has been skyrocketing since it first entered the market. According to Markets and Markets, the global kombucha market is expected to be worth $1.8 billion by 2020.
Reports like this show these kinds of drinks are not a fad but have long lasting power.
Analysts believe more people are drinking kombucha because there has been more interest in healthier drinks. People who are moving away from sugary sodas want a little more taste than plain water. Plus, as health and wellness has progressed from a niche interest to mass consumer appeal, this beverage segment has reaped the benefits.
Not only are these better-for-you beverages on-trend, but they’re also ways that legacy companies could expand into new markets. PepsiCo’s deal with KeVita, a company in which it had owned a minority stake, shows that the soft drinks giant sees the probiotics-enhanced beverage market is a way to stay more relevant to today's consumer. PepsiCo's revenues increased 5% in its last quarter, based largely on "guilt-free" beverages — comprising 45% of net revenues — and "everyday nutrition" items — which account for a quarter of all sales.