Niche brands make their mark in beverage sector as new trends guide growth

Posted by Daniel Palmer on 6th October 2009

The sweet spot in the beverage market, long dominated by a handful of major brand lines, has shifted to niche products that target a diverse set of consumer needs, occasions, and benefits.So what consumer needs can today’s beverages profitably quench? According to the a new report from the Center for Culinary Development (CCD) and Packaged Facts, Beverage Trends: Culinary Trend Mapping Report, two drivers are spurring sales in the beverage market:

* Better-for-you – the number-one driver in the new beverage landscape, including functional, nutritional boost, and holistic wellness beverages
* Quality quest – including organic, local, artisan-made, and retro/nostalgic beverages

Cocktails, for example, are shaking it up again. Fueled in part by the passion of creative bartenders and artisan spirit-makers, cocktails are experiencing a renaissance as they connect to consumer interest in retro experiences. Having struck such a powerful chord among consumers, the mysteries of mixology will spill over to inspire new versions of non-alcoholic packaged beverages.

Coconut water, meanwhile, has been making an impact overseas where recent advances in technology and packaging has helped it drift from beachside to store shelf, where single-serve packages boast an impressive range of health benefits. Coconut water’s reported health benefits have helped drive sales.

The report also noted the rise of stevia in the wake of approval from the US food standards regulator last year (it also received approval from FSANZ here in Australia).

Stevia has been called the “holy grail” of sweeteners: it comes from a natural source, and has all of the sweetness of sugar but none of the calories. The FDA announcement caused immediate commotion in the beverage world; within days, stevia-sweetened drinks that had been waiting in the wings were rushed to market by carbonated soft drink manufacturers hoping to reverse the declining fortunes of that category.

Other beverage trends seen include exotic functional flavours such as acerola and yumberry; kombucha, drinking vinegars, and “Ayurveda in a bottle” drinks redolent of Eastern wisdom, holistic health, and longevity. New soft drinks with cane sugar and exotic natural flavours; and functional kids’ beverages that promise a host of benefits for developing bodies are also on the rise.

The market potential for on-trend new beverages remains significant, with diverse segments ranging from Gen Y teens to savvy Gen X parents and ageing Boomers looking for what’s next in healthful and premium new drinks.

“Because of this diversity in consumer demographics and psychographics the beverage market is an arena with plenty of room for growth and innovation,” Kimberly Egan, CEO of the Center for Culinary Development, concluded.