Non-Alcoholic Beverage Trends in the US

The beverage market is rapidly evolving. Staying up-to-date with new product innovations is pivotal to keeping pace with consumer preferences.

Over the past few years, the market has experienced many shifts and changes. The core trends Mintel has identified are the rise of functional claims in beverages, the shift toward alcohol moderation, and increased health consciousness affecting beverage purchase behavior. In this article, we’ll explore how these changes can present growth opportunities for businesses in the beverage industry.

Americans are taking measures to ensure that their health is not negatively impacted by their beverage consumption. In fact, many are proactively seeking beverages that positively impact their health across a number of segments.

The sober curious movement, consisting of individuals consciously reducing their alcohol intake due to long-term health concerns, is shaping the alcohol alternatives market. Nearly half of sober curious consumers say they are reducing their alcohol intake to improve overall physical health, while others are doing so to improve their mental health.

However, the reach of the alcohol alternatives market is limited outside of sober curious individuals due to a few factors, including the premium pricing and the taste profile of the drinks. Success within this segment lies in a blend of bold branding, better-for-you (BFY) claims, and captivating flavors that rival traditional alcoholic beverages.

In the carbonated soft drinks (CSDs) market, consumers’ health perceptions continue to cast a shadow. The majority regard carbonated soft drinks as an unhealthy choice for regular consumption. Yet, there’s an appetite for reformulation and significant interest in CSDs fortified with vitamins or minerals. Notably, 61% of CSD users aged 35-54 state that vitamins/minerals would make a CSD a healthy drink option. Moreover, niche interest in drinks supporting brain health and relaxation signals opportunities for product differentiation and innovation.

The energy drinks sector rides the wave of fitness and wellness trends, particularly among younger women. Products such as Celsius and Alani Nu succeed due to their low/no sugar and calorie contents, marketing themselves as BFY sources of energy. The packaging design and lifestyle branding resonate with this consumer demographic, encapsulating an aspirational fitness lifestyle.

Featuring wording and imagery that resonates with a fitness lifestyle, Celsius appeal to young women with this packaging. Source: Celsius

Lastly, the nutrition drinks sector remains focused on weight management, reflecting consumers’ ongoing association of health with weight. While 43% of US consumers still view calorie counting as a primary strategy for weight management, a similar percentage say calorie counting harms mental health. This presents an opportunity for brands to connect wellness achievement with positivity, creating strategies that consider both physical and mental health.

Across all segments, the US non-alcoholic beverage industry reveals a strong drive toward health and wellness, leading to product innovation and an emphasis on physical and mental well-being.

Innovation in the non-alcoholic beverage industry is creating new paths forward. Fueled by evolving consumer preferences, leading players are stirring changes that satisfy both taste buds and the desire for positive health outcomes, among other consumer demands. Keep reading to understand how these developments unfold across different beverage segments.

Health consciousness, alongside a renewed passion for CSDs, has spurred the advent of brands like Olipop, Poppi, Revive, and United Sodas of America. They employ natural ingredients and promote health claims, successfully relighting the spark for lapsed and existing CSD consumers, and intriguingly, doubling as appealing alcohol alternatives for those keen to cut back.

The focus on health, however, has led to a potent question: Could functionality be the next evolution for CSDs? Brands like Rebbl, GuTSY, and Molson Coors are answering with a resounding ‘yes,’ integrating probiotics and other beneficial elements into their offerings. The goal is to transform indulgent habits into healthier routines, and as Americans move toward aligning their non-alcoholic beverage consumption with positive health outcomes, this becomes increasingly relevant.

Flavor serves as the introductory handshake when it comes to functional claims in beverages. This is made clear by the fact that over 40% of consumers are more likely to try a new drink based on flavor than functional benefits. A similar number of consumers say that unfamiliar ingredients or flavors are more appealing when paired with familiar ingredients. The key then lies in balancing a consistent core selection of familiar flavors with captivating innovations, thereby catering to both dedicated and impulsive shoppers. Brands that encourage consumers to positively connect functional benefits with already enjoyed flavors are likely to see success, as consumers can satisfy their cravings whilst enjoying the extra benefits.

For the nutrition drinks market, parents are driving category engagement and innovation interest, especially fathers. This demographic is proving to be a gateway for households in providing the kids with their nutrients on busy days, but dads also have strong demands of the category. They not only look for “all-natural” and “organic” claims more than other demographics, but want products with these claims to deliver on nutrients just as much as alternatives. Interestingly, fathers also seek out new/interesting flavors at higher rates than other demographics. Appealing to fathers through targeted innovation could be a wise step forward, particularly with new flavors.

At the same time, older consumers (aged 55+) are reducing their engagement as nutrition drinks shift toward fitness supplements and away from the traditional nutrition factors that this demographic values. These consumers, therefore, represent an untapped audience. Brands should innovate to encourage retention of older consumers, keeping in mind their preference toward traditional nutrition factors like high-protein, high-micronutrients, and low sugar.

The bottled water segment is taking on the challenge of environmental stigma with single-plastic use raising concerns. As younger consumers’ interest in sustainability amplifies – with 63% stating that they’re willing to pay more for environmentally friendly bottled water – brands are responding. Mintel Global New Products Database (GNPD) data reveals that US water product launches with environmentally friendly claims have been increasing year-on-year. The goal, however, is for brands to commit to sustainability not only in their use of packaging materials but also in the sourcing of water itself, particularly with growing concerns around water shortages.

Functionality is also making a mark on the bottled water market. Topping the list of consumers’ preferred functional benefits in water is “superior hydration,” followed by other functions such as “skin health” and “digestive health support.” Overall, consumers are looking for a wide range of benefits from their water consumption, and brands are starting to respond to this with success. Innovators should keep in mind the importance of flavor to consumers, and also of communicating functional benefits.

”Packed with vitamin C,” this growing brand focuses on the added benefits of lemons to water, including functionality. Source: The Lemon Perfect Company

The key drivers of innovation in the US non-alcoholic beverages industry are health and wellness, consumer demographics, and sustainability. This innovation is paving the way for a diverse and inclusive beverage experience that caters to the evolving preferences of consumers.

Brands looking to make their mark and thrive must align with the health consciousness wave. Tapping into functional ingredients may be a step forward in this area, whilst remembering that flavor stands as the gateway for consumers for most segments. Familiar flavors can act as a bridge, encouraging consumers to cross over to the unfamiliar, whether it be flavors, or ingredients that may provide desirable wellness claims.

Is your business strategy aligned with the evolving preferences of beverage consumers? Have you fully explored your customers’ consumption habits? With Mintel’s leading independent market and consumer research, you can strategize according to the latest trends and developments in non-alcoholic beverages in the US. Explore our Drinks Market Research, or fill out the form below, and an industry expert will contact you directly.