Innovation Investigation: What’s Bubbling Up in Non-Alcoholic Fermented Beverages

From tangy sips to probiotic-packed fizz, non-alcoholic fermented beverages deliver a flavorful and functional drinking experience. Although estimates vary, fermented drinks like kombucha, kefir, and kvass may be generating more than $1.1 billion in North America. Forecasts for growth are bullish, with industry watchers predicting that kombucha may have an annual growth rate (CAGR) of 16%, while kefir could generate 4% CAGR over the next five years.

The surge underscores a decisive shift in priorities about functionality and liquid refreshment. Fermented beverages provide nutrient-rich support for digestive health with a recognized link to boosting immunity. But the bubbly drinks also offer bold, complex flavors with a twist, branching away from standard beverages and offering an exciting dimension to beverage formulation.  

We’ve taken a closer look at innovation trends to help you assess the opportunities for beverages shaking up the status quo.

A Digestible Explanation of Non-Alcoholic Fermentation

Fermentation is a process that chemically breaks down organic matter through a kickstart from bacteria, yeasts, or molds. The organisms feed on added sugar, using it as fuel to break down the sweet molecules and convert them into a new form, such as gasses or liquid.

Fermented beverages often start with three ingredients:

The mixture changes (ferments) over time, from a few days to almost a month, with the timeline and the base critical elements of getting the desired functional drink.

All fermented drinks produce alcohol as a byproduct of fermentation, but that doesn’t necessarily mean shoppers will need an ID to purchase. Non-alcoholic fermented beverages have shorter fermentation cycles that produce less byproduct. Fermentation times will be longer for beverages with a buzz, like beers, wines, or meads.

Non-Alcoholic Fermented Beverages Starting to Pop in North America

Our innovation investigation examines trends in some of the leading fermented drinks, including kombucha, kefir (dairy-and-water-based), kvass, and fermented juices like tepache.

THE RISE AND SPARKLE OF KOMBUCHA

Although kombucha (kuhm BOO chuh) originated centuries ago, the beverage landed in North American grocery stores in the late 90s with the launch of GT Dave. Now, with more than 650 brands available, kombucha has wide market recognition. The fizzy, sour-sweet drink has a fermentation process that often uses a starter culture (SCOBY: Symbiotic Culture of Bacteria and Yeast) in sweetened tea. The resulting base contains vitamins E, K, and B and minerals like potassium and manganese. Kombucha provides developers with a versatile framework for flavors.

Although innovation softened in the most recent year, Mintel reports that about four in ten Americans have tried kombucha, and half would repurchase it. Brands are now creating hard kombucha by extending the fermentation process to boost ABV from less than 0.5% to as high as 9%. Non-alcoholic kombucha producers are finding ways to formulate with less sugar, and the average gr/100ml is 2.3 in 2024, down from more than 3.0 in 2020 (Mintel GNPD).

The beverage is getting more kudos in social discussion for providing convenient, refreshing rejuvenation (Tastewise).

KEFIR EXTENDS FROM CREAMY CLASSIC TO A FIZZY FAVORITE

Kefir’s origin story dates back to the Bronze Age, making it ‘older’ than Kombucha. The dairy-based fermented beverages started to become mainstream in the late 80s when the Lifeway brand launched in North America. Major brands began producing kefir, including Hain Celestial, Nestle, Danone, Green Valley Creamery, Maple Hill Creamery, Forager, Redwood Hill Farm & Creamery, Biotiful Dairy, and Emmi AG.

Dairy-based kefir (Kuh-FEER) adds kefir milk grains, cauliflower-floret-like pieces containing yeast and microorganisms, to cow, goat, or sheep milk. Although the tart milk drink is akin to drinkable yogurt, kefir has a longer fermentation time, more probiotics, and more effervescence. The fermented beverage provides calcium, magnesium, protein, and vitamins B2, B12, and D. Some brands are incorporating plant-based milk (coconut, cashew, soy, almond, buckwheat) into the fermentation process. Social conversations about dairy-based kefir indicate growing interest, increasing by +10% in the last year.

Water-based kefir dates to the late 1800s and has a water kefir grain (similar in appearance to kefir milk grains) that ferments a sugar-water mixture. Brands are now enhancing Kefir water with additional carbonation and fruit juices or flavor to enhance the fizz and create a soda-like drinking experience. Discussions about kefir soda jumped by 42% in social discussion in the past year.

KVASS: A BREAD-TO-BEET PROBIOTIC POWERHOUSE

Kvass (kuh VASS), made from rye bread, barley, or beets left to ferment, has a slightly sour taste and a low alcohol content. Producers often flavor the fermented beverage with mint or fruit like apples, raisins, strawberries, or raspberries. The drink originated in Eastern Europe in the 10th century, arriving in North American grocery stores in 2010 when Coca-Cola brought Krushka & Bochka Kvass to New York. Canadian-based All Star Beverages continues to expand its kvass distribution.

Like other functional beverages, kvass provides more than refreshment, serving up probiotics, vitamin B12, selenium, and manganese. Kvass also contains antioxidants, natural nitrates, vitamins A and C, and potassium. Although few brands currently bottle kvass, the beverage is buzzy in the social landscape, with conversations up by +35% in the last year. Craft brewers are exploring fermented beverages in low-alc and ‘hard’ formulas, getting accolades for sustainability since bread waste is significant in North America.

TEPACHE TIME: A SWEET, SPICED TRADITION TAKING FERMENTED BEVERAGES UP A NOTCH

Tepache (te PA che) originated in Mexico in the 15th century when Aztecs created a fermented corn beverage. When the drink traveled north, people changed the base ingredient to pineapple, which has naturally occurring yeasts and microorganisms. The fruit provides a sweeter, fizzier, and more tangy taste experience. Added cinnamon and cloves discourage unwanted organisms from growing in the unpasteurized beverage, and some brands incorporate piloncillo, a flavorful Mexican brown sugar.

Cans of tepache arrived in North American grocery stores in 2020, and popularity is ramping up, with social discussions increasing by almost 10% in the last year. The soda-like beverage contains probiotics, vitamin C, and bromelain, an enzyme that can help with pain, swelling, and stiffness caused by arthritis. Although the classic tepache has low ABV, some brewers are raising the alcohol content to 5% or more.

Let’s Keep Things Bubbling: Perfecting Flavors For Your Fermented Beverages

If you’re just starting to explore fermented beverage opportunities and want additional insights to guide your plan or need support with flavor solutions, connect with the FlavorSum team. We’ll collaborate with you and speed up your success!