CATEGORY INTELLIGENCE READY-TO-DRINK BEVERAGES
SO MANY CHOICES
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Category grows on the strength of better-for-you formulations
DO consider offering enhanced water, such as sparkling water, as a private brand. The category is expanding and growing.
The future outlook for the ready-to-drink (RTD) beverage category is “great,” says Tyler Kneubuehl, director of marketing and analytics for Berner Food & Beverage LLC, a Dakota, Ill.-based company that manufactures shelf-stable ready-to-drink teas, coffees and protein energy shakes in single-serve glass bottles and aluminum cans. “RTD beverages continue to see growth [and] private label is in a better spot now more than ever, due to customers being more informed,” Kneubuehl contends. “With information at their fingertips, they’re able to make educated decisions about what to consume, instead of basing their choices off major marketing programs.” Private label should continue to see consistent growth in this category in the years to come, Kneubuehl adds. “A lot of private label’s success will be built around the in-store experiences that retailers provide,” he explains. “The better the connection [and trust] that retailers can build with their customers, the better chance they have to convert them to private label customers — and reap the benefits of those higher-margin products.”
DON’T discount dairy alternative drinks, a category that continues to grow.
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The RTD category is headed toward providing sustainable packaging and ingredient sourcing, Kneubuehl adds. “Customers are informed now more than ever — not just about labels, but about the products full circle — and how it affects them and the environment.” WATER ON THE RISE One of the fastest-growing beverage categories is bottled and enhanced waters, especially sparkling waters, according to Tom Pastre, author of the March report, “U.S. Beverage Market Outlook 2019,” for market research firm Packaged Facts. The ideal clean-label product, water products logged $19 billion in sales in 2018, and Packaged Facts projects that sales will soar to nearly $26 billion by 2023. Health-conscious consumers who are wary of tap water and who are avoiding sugary drinks are driving this growth, Pastre reports, adding that bottled water (including flavored sparkling waters) overtook carbonated soft drinks as the leading U.S. beverage category on a volume basis back in 2016. Packaged Facts advocates continued development of sparkling water as a healthier alternative to sugary sodas and the use of natural flavorings with reduced or no sugar. Infusions of fruits and vegetables are one way to accomplish this, the report notes. Premium, high-priced waters are also boosting the category, Pastre reports. These include waters enhanced with vitamins, minerals, probiotics, caffeine, protein and other added benefits such as hydrogen-infusion (said to increase hydration and deliver benefits such as increased athletic performance) and alkaline waters (which proponents claim slow the aging process) as well as the emergence of CBD-infused waters, according to Packaged Facts. Water in single-serve plastic bottles accounts for about two-thirds of total water sales. There is some consumer backlash over plastic bottling, as well as government and business efforts to limit or even ban its use, and as a result major water producers are working on more sustainable packaging, Packaged Facts notes. ACTIVATING CONCOCTIONS Energy and sports drinks are also growing rapidly. Retail sales of $22 billion in 2018 are poised to approach $28 billion by 2023, Packaged Facts says. These functional beverages previously aimed mostly at young men and fitness buffs are evolving with clean-label
Store Brands / August 2019 / www.storebrands.com
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