Companies continuously have to adapt to consumers’ changing preferences, and for the beverage industry the current trends are pointing towards non-alcoholic drinks. In 2019, sales of non-alcoholic beverages were able to reach $919 billion, which is almost four times more than the amount of alcoholic beverages sold in the same year. Sales of sodas have also been on the decline in the U.S. as governments around the world introduce taxes on sugary drinks in an effort to reduce consumption, which has led companies like PepsiCo to invest in other brands.
The beverage market is currently experiencing change and growth with five categories taking the lead in popularity. Functional waters is estimated to cost $18.24 billion by 2025, however continuous changes in cost and customers’ growing bargaining power pose challenges to the market’s growth. Nonetheless, drivers such as a shift towards consuming products infused with healthier ingredients that have positive effects on people’s nutrition as well as popularity among the young generations are making functional waters a desirable drink.
Another growing market is organic beverages, which is expected to be worth $32.78 billion by 2027. Consumers’ interest in organic beverages because of its health benefits, higher demand for sugar-free drinks, and desire for more natural flavors have led to brands including organic drinks to their lineup. The ready-to-drink (RTD) tea and coffee market has also seen increased popularity over the years as coffee continues to fuel the modern world, increasing demand for the natural energy drink. Drivers such as growing adoption of healthy habits, innovation of new products, and demand for drinks that have low or no sugar have helped the RTD tea and coffee market to rise in popularity. However, thanks to the COVID-19 pandemic, some consumers are instead making their own coffee at home instead of buying them in stores.
Those who want a caffeine-free alternative might be wondering what drinks could replace coffee, and that’s where the tea market comes in. People who want to adopt healthy lifestyle habits have shown a growing preference for herbal and oxidized tea, which provides the energy boost without caffeine. Nitro offerings, functional add-ins, and different milk blends are also upgrading the cold tea category. Nonetheless, there are still healthier options through the RTD alcoholic beverages market for those who still desire alcoholic beverages but prefer ones that have lower alcohol content. More brands are offering alcoholic beverages that include good-for-you flavors and ingredients.
Bars are also acknowledging the non-alcoholic beverage trend by offering the mocktail on their menus. These are mixed drinks that do not contain alcohol and allow those who do not drink alcohol often a healthier choice and provides them the ability to still drink something luxurious with their friends who prefer to drink. A mocktail also grants children the chance to have a special drink with their families during an occasion for celebration.
Beverage brands are continuously looking for ways to expand into new markets, and jumping on the non-alcoholic beverage trend is a great way to appeal to a big target audience.
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