Over the last few years, consumers have been practicing more conscious drinking, whether that’s abstaining, focusing more on ingredients, or sipping low-proof drinks.
The beverage industry is in the midst of disruption. From an increase in canned cocktails, to added adaptogens, to the need for good ingredients, to the rising demand of more non-alcoholic beverages. Gen Z has been a huge part in the shift of the beverage industry, and with summer approaching, which usually comes with a spike in beverage sales, we wanted to do a deep dive in the current beverage industry.
Non Alcoholic Beverages
Let’s start off with the increase in non-alcoholic beverages. According to Veylinx, a research consumer insights platform, almost half of drinkers are trying to reduce their alcohol consumption, and of them, 52 percent are replacing alcohol with non-alcoholic beverages. Consumers identified improving their physical health and mental well-being as the main reasons for drinking less. In 2022, sales of no- and low-alcohol beverages grew by more than 7% in volume across 10 key global markets, surpassing $11 billion in market value. This is up from $8 billion shown in 2018, according to IWSR Drinks Market Analysis.
Forbes article quoted Susie Goldspink, Head of No-and Low-Alcohol, IWSR Drinks Market Analysis, “The dynamic no/low-alcohol category presents opportunities for incremental sales growth as consumers are recruited from drinks categories such as soft drinks and water. Brand owners have an opportunity to recruit non-drinkers of alcohol.”
At the intersection of the booze-free lifestyle and functional beverage trends are nonalcoholic concoctions, some of which contain adaptogens, from companies such as Kin Euphorics, Curious Elixirs and local weather.
Alcoholic Beverage Trends
Now all this is not to say that alcoholic drinks are disappearing. Far from it. According to Grand View Research, The global ready to drink cocktails market size was valued at USD 782.8 million in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 13.4% from 2022 to 2030.
Spirit-based cocktails held the largest revenue share of over 40.0% in 2021 and are expected to maintain their lead over the forecast period. The beverages typically contain up to 5% alcohol mixed with other ingredients like juices. vodka, gin, tequila, whiskey, and rum are the most commonly used spirits.
Wine-based cocktails are expected to emerge as the second-fastest growing segment at a CAGR of 13.1% over the forecast period. Consumers perceive wines to be a healthier option, which has driven the market demand as wine-based cocktails usually contain fruit juices, such as grapefruit, oranges, passionfruit, lemon, mango, and berries. It also resonates with changing consumer trends and inclination towards a healthy lifestyle by shifting to beverages with low-ABV content. This has propelled manufacturers to introduce healthier, gluten-free, low-carb, organic/natural wine-based drinks.
Goodbye Diet Sodas
Another interesting trend the beverage industry is seeing is saying goodbye to diet sodas.
According to WGSN, Diet sodas are disappearing thanks to Gen Z and Millennial consumers' objections to diet culture. As brands reconsider how they label healthy products, Gen X's interest in diet, nutrition and weight loss is a better indicator of the future of diet drinks.
Many soda brands have started reconsidering the way they label diet products, swapping the word 'diet' for specific nutritional terms such as 'sugar-free' or 'low-carb'. PepsiCo's chief marketing officer says these changes are meant to target younger consumers. However, Gen X offers brands new routes to diet drink innovation. Rather than just slapping on a new label, they will be more interested in exploring health drinks that help them lose weight in safe, effective ways.
Don’t forget Targeting Gen X
Going off those trends, WGSN performed an interesting study that shows that New drink trends often target younger Gen Z and Millennial tastes, however Gen X are ready to indulge in flavors that meet their evolving priorities around health, luxury and experience.
According to WGSN, 54% of Gen X feel overlooked by brands – a costly oversight seeing as these consumers are in their prime earning years. In the US, Gen X boasts a higher-than-average household income, with $2.4tn in spending power. When it comes to drinking habits, Gen X is ready for beverage brands to better cater to their tastes. Trends such as the low-and-no alcohol movement or the functional beverage market are prime to engineer new options devoted to this generation. As professionals at the end of hard-earned careers, they'll look to indulge in beverages that satisfy their need for luxury and indulgence. As parents, they'll expect streamlined solutions that prioritize the wellbeing of their families as well as their specific health needs. Most importantly, they'll look to drink brands that build a space for them in an industry that overwhelmingly serves younger groups.
Packaging Trends
72% of shoppers surveyed are influenced by the packaging of a product, according to Ipsos research. Two-thirds of respondents indicated the materials used to package a product had impacted their decision.
As with all consumer trends, Sustainable packaging is on the rise. 85% of individuals noting their buying habits now include greater sustainability, per Ipsos. Companies choosing to turn a blind eye to sustainable packaging are increasingly likely to feel the pinch at retail. And if a brand is targeting Millennials or Gen Z, it is really courting hard times.
Local weather, a healthier sports drink is the first ever sports drink to use reusable and infinitely recyclable aluminum bottles. According to local weather, Only 8% of all plastic in the world is recycled, it takes more than 450 years to decompose, and much of it winds up in our oceans. But aluminum is infinitely recyclable, takes very little energy to do so, and can be back on shelves in just 60 days. It seems like a no brainer.
It will be interesting to watch the beverage industry continue to evolve. Reach out to us at hello@harperandscott.com to find out how to help your beverage brand stick out!
