There’s no shortage of beverage innovation out there, but which ideas truly have the potential to shape the sector in years to come?
From Flavour to Functionality
Innovation in today’s beverage market is coming from all directions. Beverage giants like Coca-Cola and PepsiCo are no longer simply about soda, they’re looking to develop new products and make careful acquisitions in exciting categories.
Functionality, sustainability, flavour development and customisation are all set to play an increasingly large role in tomorrow’s beverage market.
Connecting with the Conscious Consumer
According to FMCG Gurus: Proactive Health in a Post-Pandemic Environment (May 2022), 71 percent of global consumers say that they seek out functional food and drink products to some extent. As the post-pandemic lifestyle redefines how we approach preventive health, consumers are increasingly mindful of products featuring active ingredient claims and benefits.
Plant-based beverages are perfectly placed to capitalize on this growing opportunity. The plant-based trend has been enjoying spectacular momentum in recent years and these drinks offer a health halo that makes them an ideal platform for functional ingredients.
Functional Benefits Across Different Formats
- Protein-Based Sports Drinks
The market for protein-based sports nutrition products is no longer restricted to bodybuilders and athletes. With nearly half (45 percent) of shoppers worldwide saying they monitor their protein intake daily; these products now appeal to a much broader range of health-conscious consumers.
- Meal Replacement
Meal replacement applications have also been most associated with the sports nutrition industry, but that’s not the only growing segment. Next-generation meal replacement powders are appealing for younger generations of consumers—specifically 16–35-year-olds. As this category emerges, there’s still plenty of room for product developers to take advantage of this convenience trend.
- Plant-Based Dairy Drinks
Plant-based milk products are big business, with the global dairy alternative market projected to grow at a CAGR of 11.4 percent from $21.4 billion in 2020 to $36.7 billion by 2025.
These beverages can also be adapted to include additional functional ingredients. Plant-based dairy alternatives enriched with probiotics could tap into this opportunity.
- Energy Drinks
The market for energy drinks continues to post positive growth rates. However, there remains some resistance to energy drinks among consumers who are concerned about the ingredients they contain – particularly sugar. There are many plant-based nootropic ingredients that make the perfect addition to energy drinks with a natural positioning. They include natural caffeine from yerba mate, green tea, green coffee, guarana, and ginseng.
- Low-to-No Alcohol
RTD cocktails continue to be a popular and convenient choice for consumers looking for beverages to enjoy at home. The category’s growth is seen in the lower ABV range, which also indicates the growing potential for non-alcoholic beverages in functional mocktail formats.
- Kombucha
Kombucha beverage launches experienced an impressive 47 percent CAGR between 2016 and 2021, according to Innova reports. Organic, probiotic, and gut health claims have contributed to their natural and functional appeal in both alcoholic and non-alcoholic product lines.
Inspiring Taste Trends
Innovation is focused on identifying new ways to create enjoyable flavour experiences. Predictions for the new year feature flavour that target everything from health to experience-driven tastes.
Feel Good Flavours
Flavour can play a direct role in functionality in addition to aligning with perceptions of health benefits For instance, citrus ranked as a top flavour in immunity beverages over the past five years. The citrus-immunity association is just one example —the linkages span both mental and physical health offerings. As people seek more from their food and beverage products, we expect developers to leverage flavours more strategically to create those connections.
Beyond tie-ins with functional products, flavours can provide benefits by creating pleasurable experiences or evoking happiness through memories. Developers who want to target stress relief could shift away from a functional ingredient to a less direct approach with flavours that feel good—simple, nostalgic, indulgent. Flavour can transport people, and when flavour takes them back to a childhood backyard bonfire with gooey marshmallow or sweet apple cider, the sense of enjoyment extends beyond taste.
Elevated Taste Experiences
With so much in flux, people will seek moments of simple and indulgent pleasure. Innova predicts that consumers will find creative ways to “elevate the everyday.” How can developers tap into this trend? 30 percent of global consumers find richness of flavour the most important driver of enjoyment and pleasure in food. (Innova) Brands can develop moments of joy through taste and storytelling.
Down to Earth Flavours
Floral and botanical flavours are still relatively young in the world of food and beverage, but we expected continued growth because they offer elevated taste profiles and added functional benefits, Tastewise highlights gains in trending floral flavours like ylang ylang (+42 percent YOY in consumer interest) and echinacea (+24% percent YOY in consumer interest).
Mintel calls it “the great mushroom boom,” and they’re right. Mushrooms are popping up everywhere. But brands have plenty of white space to innovate with the umami flavour. Mushrooms have become increasingly popular as plant-based alternatives flood the market, but they also offer their own unique taste profile. Mintel reports that “manufacturers are largely missing an opportunity to engage consumers by not emphasising the unique flavour profiles of different varieties.” The ample, untapped room for creativity with mushrooms exists in food and beverage applications.
Experience-Inspired Tastes
Some people want the multi-layered tastes and exciting flavour experiences that come along with an alcoholic beverage without the side effects of alcohol. As the sober curious movement gains momentum (Note: Mintel reports that “gen Z adults drink less than older generations”), developers can discover ways to deliver the experience without the hangover.
Social media can inspire people to try new tastes and in 2023, this trend will continue to pick up and brands will increasingly monitor and respond to ideas born in the social space. With the expansion of social media has come a new breed of influencers sharing cultural meals and snacks. More brands and influencers are partnering, so expect to see an uptick in food and beverage launches coming from those relationships. But social media moves quickly, and brands must do the same. According to Mintel, “food and drink flavours and fads move faster in a more connected world.”
