Innovation Investigation: What’s On the Horizon for Refreshing Beverages

by | Apr 4, 2024

People are personalizing their beverage choices to support their needs throughout the day. Refreshing beverages are not just about quenching thirst; they are becoming an increasingly popular format for delivering functional benefits because of their versatility and portability.

Let’s explore refreshing beverage trends in North America, how brands are bringing them to the shelf, and what you can do to deliver the flavors and functionality people crave.

Refreshing Beverage Market Dynamics

According to our research, North American beverage drinkers bought five different beverage types in a 60-day period. Hydration drinks are purchased most often, followed by fruit juice, iced tea, energy drinks, and enhanced water.

Data from the Beverage Marketing Corporation places the 2023 refreshing U.S. beverage market value at around $161,792 MM, a 3% gain compared to 2022. For 2024, energy drinks and bottled water have projected volume and dollar growth.

Refreshing Beverage Projections for 2024

Beverage Marketing Corporation

Category Volume Growth Wholesale Dollar Growth
Energy Drinks 4.5 to 5.5% 9.0% to 10.0%
Bottled Water 1.0% to 2.0% 3.0% to 4.0%
Carbonated Soft Drinks -1.0% to 0.0% 3.0% to 4.0%
RTD Coffee -2.0% to -1.0% 3.0% to 4.0%
RTD Tea -2.5% to -1.5% 2.5% to 3.5%
Sports Drinks -3.0% to -2.0% 2.0% to 3.0%
Fruit Beverages -3.0% to -2.0% 1.5% to 2.5%
Value-Added Water -3.0% to -2.0% 0.5% to 1.5%
Total -1.0% to 0.0% 3.0% to 4.0%

Even with volume growth slowing, sales of refreshing beverages are outpacing alcohol and traditional drinks like hot coffee, tea, and milk.

Tastewise, a social listening platform, reports that social media discussions around “refreshing beverages” have grown 29.7% in the past year. Emerging trends in these discussions are vitality, mindfulness, serenity, and nourishment.

Hydration Is Hot

From our research, we know that North Americans prioritize hydration. Optimum hydration is essential for many aspects of health, including body temperature regulation, joint lubrication, immune health, sleep quality, and digestive health. Social media conversations around hydration have grown 14.7% in the last year (Tastewise). Within hydration conversations, people are highlighting “vitality” more often, with these discussions up 287%.

North American beverage brands are responding to the growing interest in hydration. The number of launches mentioning “hydration” increased by 9.3% from 2022 to 2023 and those calling out electrolytes increased by 8.3%. FlavorSum’s primary research identified watermelon and coconut as the #1 and #2 ingredients most closely aligned with hydration, as reflected in the product highlights below.

Mela Original Watermelon Water

Hydration from watermelons with electrolytes, antioxidants, and natural flavors. U.S., March 2024

BodyArmor Lyte Dragonfruit Berry SuperDrink

This 15-calorie hydration drink has coconut water from concentrate, 700mg of potassium electrolytes per bottle, antioxidants, vitamins B, C, and E, and natural flavors. Canada, February 2024

Clean Energy

In our 2024 prediction blog, we forecasted that people want energy without the adverse side effects of caffeine. Brands are on board, with North American beverage launches with energy claims reducing the caffeine grams per mL by -16% in 2023.

Caffeine is still a go-to solution for energy, but refreshing beverages can offer people an energy alternative. “Cleaner” energy sources also have associated functional benefits like increased focus and mental clarity. Green tea extract, ginseng, or adaptogens contain various health-promoting properties, such as antioxidant effects, stress reduction, or immune support. People have used traditional ingredients like yerba mate, matcha, or guarana for their stimulating properties for centuries.

Reign Storm Guava Strawberry Clean Energy Drink

Proprietary plant-based energy blend of natural caffeine, green tea extract with 45% EGCG, ginseng, guarana, guayusa, and natural flavors. U.S., March 2024

Celsius Astro Vibe Sparkling Blue Razz

Celsius proprietary MetaPlus formula, including green tea with EGCG, ginger, and guarana seed, turns on thermogenesis, a process that boosts the body’s metabolic rate. U.S., March 2024

So Long, Sugar!

Experts have been issuing cautions about sugar for a decade and counting. In 2009, the University of California posted a lecture from Dr Robert Lustig called “Sugar: The Bitter Truth” on YouTube. Dr. Lustig argues that too much sugar and not enough fiber are major factors of the “obesity epidemic.” While critics considered his evidence insufficient, the video had over 800,000 views in one year (the equivalent of going viral in 2010).

Google searches for “is sugar bad?” have risen steadily since 2010 and doubled since 2020.

 The CDC cautions against too many added sugars and notes that sugar-sweetened beverages are the leading sources of added sugars in America: “Frequently drinking sugar-sweetened beverages is associated with weight gain, obesity, type 2 diabetes, heart disease, kidney diseases, non-alcoholic liver disease, tooth decay and cavities, and gout, a type of arthritis.”

Recent international research found that more than seven in ten people want to limit or avoid sugar intake. Brands are pulling back on added sugars and sugar content across several food and beverage categories. Refreshing beverages are following suit with 5% more launches highlighting “zero sugar” or “sugar-free” in 2023. Subcategories with more emphasis on cutting back on sugar include CSDs, sports drinks, nutrition drinks, and flavored water.

% Change in Launches with Sugar-Free Claims

North America, 2023 (Mintel)

Carbonated Soft Drinks

+85%

Sports Drinks

+59%

Nutrition Drinks

+14%

Flavored Water

+13%

 

Waterloo Sparkling Water Tropical Fruit Flavored

Boldly refreshing with natural flavors, this sparkling water has no calories, sugar, sweeteners, or sodium. U.S., March 2024

Gatorade G Zero Glacier Freeze Zero Sugar Thirst Quencher

Zero calories per 12-fl. oz. serving, contains no fruit juice, natural flavors, and electrolytes to help replenish energy. U.S., March 2024

Hybrids Are Hoppin’

Purposeful eating and drinking continue to expand in North American culture. Not only are people more aware of functional ingredients, but they are looking for solutions to optimize their daily lives.

Sports and energy drinks no longer have a monopoly on functionality in refreshing beverages. Brands are exploring ways to offer more functional benefits through added vitamins, minerals, protein, or other ingredients designed to help the body and mind.

% Change in Launches with Functional Claims

North America, 2023 (Mintel)

Carbonated Soft Drinks +179%
RTD Tea +79%
Flavored Water

+71%

Juice +38%

Mighty Pop Natural Orange Vanilla Flavored Gut Healthy Drink

This soda contains pre-, pro-, and postbiotics, just 3g sugar, 2.7% juice, and organic flavors. U.S., March 2024

SkinTe Green Tea Grapefruit Sparkling Wellness Soda

A sparkling tea with 3000mg of collagen for skin, 100% vitamin C for immunity, 30 mg caffeine, and less than 1g sugar. Green tea for natural L-theanine and focused energy, hibiscus for antioxidants, and hawthorn berry for mood. U.S., January 2024

How Do North Americans Choose Flavors for Refreshing Beverages

We recently surveyed over 750 North American refreshing beverage drinkers to understand how they choose flavors. Specifically, we examined how brand loyalty influences the flavor selection process.

5

Almost half (45%) of respondents described themselves as “brand loyal,” and of those, only 22% had an interest in trying new flavors.

5

People who aren’t brand loyal are more likely to try new flavors (27% vs the 25% average; especially among 18–29-year-olds, where 36% of those who aren’t brand loyal will try new flavors).

What does this mean if formulators want to get creative with flavors? Familiar flavors (or twists on familiar flavors) are essential for brands with loyal shoppers who expect to see their favorites on the shelf. New flavors and variety packs can boost incremental sales.

Brands that are newer to the marketplace can use flavor innovation to capture attention and sales. Of course, that doesn’t mean newer brands should ignore popular flavors or flavors that align with functional benefits. For a deeper understanding of how benefits, ingredients, and flavor intersect in functional beverages, download our ebook “How to Map the Next Cool Trend in Refreshing Beverages.”

Need Help With Your Next Refreshing Beverage Innovation?

The FlavorSum team is ready to explore your flavor options with you! Whether you want to reduce sugar or formulate with functional ingredients, our team can support your innovation journey with insights, flavor creation, and application expertise. Send us a message, and we’ll connect to discuss your innovation plans and how we can help create delicious, refreshing drinks that align with evolving needs and wants.

Author

Phil a’Becket

Phil a’Becket is the Senior Consumer Insights Manager for FlavorSum. He has eight years of experience in food ingredient market research, focusing on both primary research and secondary data analysis. He earned his MBA from Clemson University, and joined FlavorSum in 2022.

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