5 Key Beverage Trends
Starting a new year can be challenging, and 2024 is no exception. Though inflation is tapering down, many other trends are rapidly shifting the beverage landscape and consumer behavior. Keeping pace is vital for brands to continue to grow.
With that in mind, here are 5 key Beverage trends to keep an eye on:
1. Functional Beverage Frenzy
Consumer demand for products that support their health and wellness is on the rise, and many beverage brands are filling that need. According to NIQ’s 2023 Consumer Outlook, 46% of consumers identified physical or mental wellness as one of their top priorities.1 And, with 47% of Americans having at least one of three risk factors that contribute to heart disease, it’s no surprise that functional beverages are seeing gains from this shift.2
These beverages are marketed for their specific health benefits beyond basic hydration. These benefits can target a wide range of areas, from boosting energy and immunity to improving cognitive function and gut health. Beverage brands offering a functional assortment can benefit from aligning their marketing efforts with health claims and exercise trends may be able to gain market share. Just make sure to stick to provable, science-backed claims.
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2. Personalization Takes the Sip
Personalization has been a growing trend in the eCommerce CPG world for years. But, today, consumers are seeking out personalization in their beverages more than ever. Many consumers are seeking customizable beverages tailored to individual needs and preferences, particularly those relating to health and wellness. This has helped drive the rise of at-home beverage creation, like kombucha brewing kits and soda seltzer machines, as well as infused water, tea, or mocktails.
One interesting area of development for 2024 is the rise of AI-powered platforms recommending personalized blends and subscription services. These AI platforms can analyze user data like taste preferences, dietary restrictions, and health goals to create unique flavor profiles. Coffee (+5.3% YoY) and tea (+5.1% YoY) are two areas where these tools are seeing more utilization, but energy drinks and other functional beverages may also offer some opportunity for personalization.3
3. Plant-Powered Paradise
In recent years, there has been a remarkable surge in the popularity of plant-based food and beverages, signaling a significant shift in consumer preferences. For example, even though consumers faced inflationary pressures throughout 2023, the alternative milk beverage industry experienced remarkable growth. The category reached $3.1 billion in total US Omni Sales last year.3 Similarly, coconut water saw 12.3% growth YoY, and lemonade was up 6.6%.3
On the opposite end of the spectrum, beverages like dairy-based drinks were down 3%.3 Beverage brands that operate in this space have the opportunity to leverage growing consumer sentiments going forward. This will be especially helpful as we move into summer when these beverage offerings tend to shine. However, this growth has slowed somewhat in the past year, so it’s worth keeping an eye on.
4. Sustainability Sips
In 2023, sustainability became a critical factor for beverage brands and this trend isn’t going away in 2024. Not only are consumers increasingly aware of the environmental impact of their choices, but government regulation is growing across the globe. For example, in March, based on a report that found 53% of environmental claims in the EU were vague, misleading, or unfounded, the European Parliament proposed a comprehensive directive on new regulations for green claims and environmental labeling schemes.4 This new scheme will greatly impact brands and businesses operating in the region.
Luckily, many beverage brands have already been focused on adopting sustainable practices. These efforts not only reduce the environmental footprint of their products but also enhance their brand image and attract consumers who value eco-conscious practices. And, with 69% of consumers stating sustainability is more important to them than it was two years ago, there are plenty of reasons to make these changes.5 In 2024 and beyond, this trend is only going to grow.
5. Global Gains
The United States is becoming more diverse, and this is reflected in the growing demand for exotic and global flavors. Drinks that were once difficult to find on American shelves are now available to consumers both online and in stores. Beverages like horchata, boba tea, Turkish coffee, and kombucha all hold places on US shelves that would have once been deemed unreachable. Online retailers offer even more opportunities. For example, kombucha saw 4.9% overall growth last year but saw 12.9% growth online.3
Retailers and brands are responding to this trend by expanding their beverage offerings. This may be through the creation of entirely new product lines or adapting existing ones. The key is to understand your target market on a regional or retailer level and intelligently focus your efforts on the areas where the most opportunity is. This means you need to have a strong understanding of the market and rely on accurate data before acting.
How to Adapt to Changing Beverage Trends
The beverage department is facing major changes, and retailers and brands need to adapt in order to remain relevant and successful. This means understanding how consumers are shifting their focus regarding health and wellness, sustainability, online shopping, and inflation is key. You need to know how to act on these trends to meet evolving shopper needs. Take a closer look at your product offerings and how they align with the trends before making any decisions.
Sometimes, it’s as simple as a new marketing campaign or packaging change to highlight an attribute. Other times, you’ll want to lean into a new product innovation or market. Data will be your best friend for making intelligent moves for long-term gains. By embracing these strategies and focusing on agility, innovation, and customer engagement, beverage brands can better navigate the ever-changing landscape and thrive in the face of new trends.
Make Your Beverage Brand Trend-proof with NIQ
2024 offers beverage brands the opportunity to grow by adapting to shifting consumer behaviors and optimizing their strategies. But if you don’t have the right data and insights, you’re likely to fall behind. NIQ offers a range of solutions and expert insights to support brands of all sizes.
Emerging brands can start their journey with a free Byzzer™ subscription, NIQ’s platform built for emerging brands and their budgets. Free access gets you 3 free reports and a weekly alert to get you started with data. Byzzer™ provides breakdowns of a wide range of attributes and markets in easy-to-digest reports.
Best of all, we’ll show you how to leverage this information for your action plan. It’s never too early to start acting on data.
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