The beverage industry is a shifting landscape as volume leading categories such as soft drinks continue to lose volume versus prior year (-3.5% in 2009, according to A.C. Nielsen) Health and wellness categories enjoy strong volume growth and functional beverages continue to be the hottest segment.
Market research firm Zenith International estimates global per capita consumption of functional beverages will increase 25% from 2010 to 2013. Industry giants Coca Cola and Pepsi continue to diversify their portfolios, as evidenced with Coke's acquisition of Glaceau's vitaminwater, Fuze and Zico Coconut Water. Similarly, Pepsi Cola acquired Izze Natural Soda Naked Juice and Amacoco, the largest coconut water supplier in Brazil.
New brands continue to enter the enhanced water category, led by Glaceau's vitaminwater, and now include Metromint, Hint, Propel Fitness Water, SoBe Lifewater, and Aquafina Alive among many others.
The functional beverage segment in the U.S., primarily driven by energy drinks and shots, grew 8% in 2009. Red Bull leads the category in dollar sales, but Hansen's Monster Energy Drink is the volume leader in the energy drink segment. 5-Hour Energy was the first-to-market and helped drive growth in the energy shots category. Now most leading brands feature a 2 oz. to 4 oz. 'shot' version of their brand.
Consumers continue to enjoy the health benefits associated with ready-to-drink teas, and organic ready-to-drink tea brands are a growing market niche led by Honest Tea and Republic of Tea. Among the major players is Arizona, which leads the category; next are the Lipton and Snapple brands.
Brands are finding success with ingredient-driven functional benefits that address key health and wellness issues such as immunity, digestion, mental acuity, and longevity. There is growing awareness of antioxidants and the role they play in boosting immunity.
The 'super-fruits' continue to capture the attention of health and wellness enthusiasts, offering significant doses of antioxidants and other elements that address a myriad of health concerns. Pom Wonderful led the super-fruit movement with its pomegranate blends and unique packaging and merchandising. Bossa Nova and Sambazon feature the powerful Acai berry from South American rain forests. Relaxation beverages are perhaps the newest industry trend, led by brands such as Drank and RelaxZen. These beverages utilize ingredients such as valerian root, L-theanine and GABA to help consumers relax and combat stress. The common thread that continues to drive the beverage industry is innovation.