Mood support, natural sweeteners set to disrupt beverage market, SPINS shares at BevNET Live
"[Here's] how to know if there's an opportunity for disruption. Are there better-for-you products available? Are there natural and organic products [or] clean products available, or [is] there a premium version?" Dicker said. "If there are not all of those three, that's a clear runway."
Disrupting beverages with better-for-you options
What used to be a niche market in health and wellness products has become mainstream and is providing opportunities for beverage companies to disrupt the industry, Dicker said. The global wellness economy was valued at $5.6tr in 2022, with the healthy eating, nutrition, and weight loss segment worth $1.079tr, according to the Global Wellness Institute.
CPG companies can create a better-for-you option of something that already exists on the market, Dicker said. Olipop and Poppi both accomplished this with their gut-health sodas by adding fiber and reducing the sugar of traditional soda.
However, some brands might not need to add ingredients or reformulate to tap into this functional demand. Rather, they need to call out the attributes associated with specific ingredients or products. For example, juice brand Cheribundi blends coconut and cranberry juices and calls out the known health benefits, including muscle and sleep attributes, he added.
Mood support, zero sugar are primed for growth
The vitamin and supplement space also tends to influence what comes next in the beverage space, with mood-support supplements seeing recent growth, Dicker noted. Mood-support supplements have become a $300m market in the US, and mood-support beverages saw $11m in sales growing by 41% year-over-year for the 52 weeks, ending Oct. 8, 2023, according to Circana data.
“The next wave of disruption is going to be in mood support beverages, and so this is where we see there's a ton of innovation out there, meaning there's a ton of brands entering the market in this space, but I don't feel like there's been any major disruption yet, [and] there's not a brand to point to that's ... really owning this space.”
Consumers are also looking to regulate their sugar consumption, opening further opportunities for zero-sugar beverages to disrupt the space, Dicker said. Beverages with natural sweeteners growing faster than those with traditional sweeteners, he added.
Products that are only naturally sweetened grew by 25%, stevia by 76%, chicory by 214%, and allulose by 4,510%, for the 52 weeks ending Oct. 8, 2023, per Circana MULO data. This is in contrast to corn syrup decreasing by 11%, sugar by 12%, sucralose by 4%, and sugar alcohols by 9%.
Zero sugar is also becoming an increasingly important attribute for kids’ beverages, with brands like Uncle Matt’s tapping into this demand, Dicker said. Kids beverages are also outgrowing the rest of the beverage category by 12%, he added.
