Hybrid beverages may drive category growth

March 23, 2016

While America’s nonalcoholic beverage market is shifting in favor of better-for-you alternatives, new research from Mintel reveals that taste/flavor (72%) is by far the main influencer for consumers when drinking preferred beverages, with health/nutritional attributes (21%) and functional attributes (16%) far less influential. Today, hybrid beverages—products that combine two or more drink categories, blending flavors and functionality to create a new beverage—are becoming increasingly more available as brands attempt to cater to consumers’ better-for-you demands while also delivering innovative new flavor options.

The top three categories of nonalcoholic beverages saw stagnant or declining sales from 2014–2015, with carbonated soft drinks (CSDs) (0.1% growth), juice (0.1% growth), and dairy milk (7% decline) suffering the most. This comes as trending beverage categories, including energy drinks (8.9% growth) and coffee (8.7% growth), experienced strong sales growth.

Although the majority of consumers drink juice (66%), CSDs (64%), and dairy milk (64%), Mintel research indicates consumers are looking for alternative drink options. In fact, 67% of Americans sometimes or frequently purchase new/different beverages, and 18% say they drink a wide variety of beverages.

“Sales trends suggest the better-for-you movement is reshaping the nonalcoholic beverage industry, but brands should consider a stronger focus on communicating flavor, in addition to health-centric or function attributes, of cross-category products,” said Elizabeth Sisel, beverage analyst at Mintel.

Press release