From Coca-Cola's origins as the "ideal brain tonic" more than a century ago, to more recent potions bearing promises of enhanced rehydration and herbal energy, beverages have long held a position at the cutting edge of health and wellness trends. With their convenience, portability and typically inexpensive price points, what better way to introduce consumers to things like ginseng and ginkgo biloba, or the age-defying power of pomegranates?
In the past decade, this trend has been gaining steam. Since 1999, energy drinks, led by Red Bull, have grown from a $75 million sip from the industry's glass into a $1 billion gulp, according to data from New York-based Beverage Marketing Group. Similarly, during that time, the already-stalwart sports drink category increased by over $1.2 billion at the wholesale level, and nutrient-enhanced teas, dairy drinks, fruit beverages and waters have experienced a half-billion-dollar increase of their own.
By contrast, carbonated soft drinks have experienced a slow but steady decline, as customers opt for healthier libations.
"About 20% of all of our DSD products sold now are non-colas, meaning waters, fruit drinks, juices, teas and alternative beverages," said Marty Miller, category buyer for direct-store-delivery beverage at Niemann Foods, Quincy, Ill. "I don't think it's as much about the vitamins as it is the 'better for you' perception - the overall message that has consumers thinking, 'This product is better for me than a full-calorie CSD.'"
Many consumers are clearly setting down their CSDs and reaching for something new, usually a beverage they view as having an added benefit. And currently, breaking trends such as antioxidants, low-sugar/less-sweet alternatives and a new generation of functional libations are pointing the way toward growth in the beverage aisle.
For starters, health-conscious shoppers have a very positive perception of antioxidants, but the general public is just starting to catch on to the benefits of these vitamins, said Ed Carroll, general manager at Fairfield, Ohio-based Jungle Jim's.
"I think that the antioxidant trend is up-and-coming," he said. "It's something that's still in its infancy right now, but it could end up with a strong following."
Dozens of start-up beverage companies are now staking heavy bets on antioxidant claims, although demand doesn't appear to be fully established.
"For a while, it was pomegranates, then it was acai, then noni juice. Not too long ago, we saw a watermelon juice with a lycopene claim," said John Craven, president and founder of BevNet.com, a website that for the past decade has written reviews of new beverages for an audience of distributors, retailers and consumers. "These companies have been competing among themselves almost, in this race for antioxidant supremacy. And many of them are sacrificing taste and refreshment quality in order to do that."
Although a handful of these drinks, such as Pom Wonderful pomegranate juice, have begun to carve a niche in some markets with promises of their anti-aging and anti-cancer capabilities, Craven said that these types of products haven't reached a point where they can turn quickly without major advertising support or incentives at the retail level. In the near term, he said, more familiar "superfoods" such as blueberries, green teas and white teas appear most likely to spread the word about antioxidants.
Growth of the ready-to-drink tea category has slowed since the New Age beverage boom in the 1990s, but now white teas, along a few new brands such as Honest Tea and Ito En - which both set themselves apart by making tea blends that are low in sugar or have none at all - have been making the leap from the natural food channel to conventional supermarkets and convenience stores.
According to Carroll, though, the lower-sugar trend has little to do with calories.
"You'll always have a segment of customers that figures less sugar is better, that beverages with less sugar help control weight and prevent health problems like diabetes and obesity," he said. "It's nothing that we have found is a particular draw, though."
Instead, these less-sweet flavors are part of a larger movement that includes fruit juice-based soft drinks such as Izze and G.U.S., short for "Grown Up Soda." As that moniker would suggest, this growing trend, to make drinks that do away with both the added sugar and the artificial sweeteners, aims to appeal to adults that don't have as much of a sweet tooth as they used to.
Similarly, the light taste and vitamin blends offered by flavored and enhanced waters are beginning to help that category live up to its potential.
A test with Glaceau VitaminWater was "very successful" at Plaid Pantries, according to Butch Fulton, merchandising manager for the Beaverton, Ore.-based chain of convenience stores. The company is currently rolling out the brand to all of its locations. Other flavored water brands, from companies like NestlT and Dasani, are also looking more promising this year, he noted.
"Flavored waters seem to be catching on now," Fulton said. "Four or five years ago, I couldn't give the darned things away."
Almost every beverage trend tends to have a few precursors that are ahead of their time, noted Greg Prince, a longtime industry analyst based in Long Island, N.Y., so it sometimes pays to look back on the flops of years past to see what may be coming up the pike.
"Energy drinks and alternatives and even water followed that graph: Come out, get ignored and/or laughed at and then re-emerge behind one or two diehards who become the pacesetters," he said.
Given that logic, one potential avenue that may be poised for a breakthrough would be beverages that target specific conditions. As an example, Prince pointed out that just a few years ago, a handful of startups created concoctions meant for aging but active baby boomers. Loaded with enhancements such as glucosamine, chondroitin and calcium, these drinks promised to ease arthritis and prevent bone-density loss. Unfortunately, they were poorly executed.
"There have been some examples of those types of products being introduced into the market and being tested in the market, but for the most part, none of them have really broken through," said Gary Hemphill, vice president of the New York-based research consulting firm Beverage Marketing Group. "But I think that's a new horizon, something that may have potential."
Although its various flavors do not target specific ailments, another brand that has begun to get mileage off of complex blends of vitamins and minerals is the Fuze line of teas and juices, which Miller said were performing well at Niemann Foods. With vitamin-packed, lower calorie alternatives to both CSDs and the "new age" drinks that kick started the category years ago, Fuze has become one of the fastest growing non-carbonated drinks in the country.
For now, though, many other innovations are riding the coattails of the ongoing energy beverage phenomenon. Fulton said that this category does not appear to be slowing.
"Energy drinks are a category that is still absolutely on fire, he said. "A few years ago I had four facings, but I've expanded to almost a full door now. Five years ago, Red Bull had a 75%-78% share of the market. Now it's down to 30%, but they're still selling more units than ever. That just goes to show that there's a heck of a lot more products in this category and a lot more people buying them."
Sales of juice-based energy drink are starting to pick up speed, supported by their mantle of natural vitamins. And the word "energy" has been making the rounds on virtually every category in the aisle. Apparently, many beverage makers now feel that doing two things at once gives them two shots at grabbing shopper attention.
"One thing to watch for are beverages that can do more than one thing," Prince said. "Energy sodas, energy juices, energy waters - sensing a trend here? But it's also stuff like vitamin beer. There's one in Texas, for cryin' out loud, and mint water. Who has time to drink two different beverages?"
Good Advice
Generate some buzz by reserving a few visible facings for hunches and surprises. Big beverage companies are doing this more and more with limited-time-only products.
Give teas a chance. Sales of RTD teas have slowed since the New Age boom in the 1990s, but now white teas, red teas, imported green teas, yerba mates and teas with less sugar are popping up with a flood of antioxidant claims.
Keep shoppers informed. Given the FDA's labeling restrictions, the new antioxidant claims on many shelf stable juices, RTD teas and even some energy drinks might draw a lot of blank stares.
