The beverage industry, often grouped into food and beverage, is a behemoth in the consumer product goods sector. As a constantly evolving industry, beverage companies are tasked with responding to diversifying palates, innovating new products to drive market growth and remain competitive, and sustaining ever-changing consumer and market demand. The post-pandemic world will continue to bring changing consumer profiles and emerging trends, and it’s essential for beverage companies in this space to carefully decide where to invest themselves to better keep up with and meet the needs of their consumers.
2022 Beverage Industry Trends
Trend #1: Expansion of Functional Beverages
Sustained consumer demand for health and wellness products in the beverage industry has opened the doors for innovation beyond the kombucha frenzy. Years ago, the idea of a beverage being more than just “empty calories” seemed farfetched. Most consumers were only pushing for drinks without excess sugar and calories; however, the market has shifted toward a demand for functional beverages that are not only guilt-free but have added nutritional and health benefits.
Particularly in the wake of the COVID-19 pandemic, consumers are more concerned with their health than ever before. This increased concern for immunity has pushed consumers toward a new awareness of what health and wellness truly means. This concern for health has driven the functional beverage trend, including probiotic and prebiotics, energy and sports drinks, and meal replacers, among others.
Companies in this space have a unique opportunity to target an audience that is already seeking out their products and is aware of their benefits. The consumers that were once pigeonholed into kombucha as their only functional beverage option are now being exposed to new choices, creating a huge space for companies to tap into. Companies like Poppi and Olipop, which offer prebiotic and probiotic sodas, have jumped into this space and are making waves among groups looking for tasty soda alternatives that differ from a classic kombucha flavor palate.
As consumers increasingly prioritize their health and wellness, functional beverages will continue to be relevant in the industry.
Trend #2: Blurring of Beverage Industry Lines
The traditional walls of category within the beverage industry are coming down as mature companies continue to seek growth in the market. Traditional beverage companies are moving into the alcoholic beverage space, alcohol companies are exploring non-alcoholic drink options, food companies are moving into the beverage space, and so on.
We see this blurring of industry lines as a result of increased competition in the market and the need to be innovative in order to retain a competitive advantage in the industry. Take, for example, beverage giant PepsiCo – in summer 2021, it announced its plans for a joint venture with Boston Beer to produce an alcoholic version of Mountain Dew called “Hard Mtn Dew.” PepsiCo and Boston Beer – two recognized leaders in the non-alcohol and alcohol industry, respectively – have now established a partnership to drive further innovation to address the changing tastes of consumers. PepsiCo is also now better positioned to compete with Coca-Cola, who entered the alcoholic beverage scene in summer 2020 with its launch of the Topo Chico Hard Seltzer, and the company has plans to explore additional opportunities in this alcoholic beverage space in the future to provide more choices for their consumers. Continue reading by downloading the full report below and learn more about our Food and Beverage Industry Services here.
Read last year’s Food and Beverage Industry Trends Report here.
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Contributions from Virginia Hooton