Top 5 Beverage Industry Trends in 2022: Sustainability, Premium Products & E-commerce
As the beverage industry navigated the twists and turns of a global pandemic, changing buyer behavior paved the way for new products and opportunities – and in 2022, brands are poised to seize the moment.
Shoppers have sent clear signals about their priorities: better-for-you and premium drink products gained popularity with an eye on health and elevated drinking experiences at home. Additionally, demand for sustainability drives new innovations in both packaging and ingredients.
For beverage brands, detailed, up-to-date data has become a top priority to keep up with this evolving consumer behavior, alongside lingering supply chain setbacks and increased retail competition.
1. E-commerce shines, but omnichannel matters more
As buyer behavior continues to evolve, optimized pricing, a reliable supply chain, and an omnichannel presence are key to getting beverages into the hands of thirsty consumers.
During the early pandemic, e-commerce sales ballooned, but by mid-2021, many shoppers returned to stores, data firm IRI found. Although the pandemic increased online shopping by 50 percent in 2020, less than half of that shopping led to purchases, according to research firm Nielsen. This became an important lesson for brands: many shoppers are discovering new products online but looking beyond their screens to actually make purchases.
Heading into 2022, brands are striving to ensure availability and meet consumers in the right place at the right time. They will continue to accelerate their e-commerce capabilities to meet the ongoing digital demand, growing their online product offerings, honing the digital customer experience, and securing a smooth delivery process. At the same time, these brands are finding ways to more closely monitor buyer behavior in brick-and-mortar stores, helping them adjust their marketing efforts to meet the needs of specific regions and retailers.
2. Supply chain challenges drive retail efficiency
With continued supply chain shortages, it’s more important than ever for brands to know where and how to focus their efforts to keep the drinks flowing. This means having data at their fingertips.
“Having access to data is essential to making informed business decisions,” said Patrick Otten, VP Sales & Distribution at Sedona Bottling. “But it can be a challenge to have the time to find the actionable insights.”
Beverage brand Roar Organic found a helpful solution: insights found in retail data platform Crisp helped grow the brand’s distribution by five to ten percent. The brand uses Crisp’s real-time dashboards multiple times per day to make data-driven decisions.
“We are able to see true ROI when we can see the shipment data correlated to our in-store promos,” said Georgia Baker, Roar Organic’s Senior Manager of Sales and Brand Operations.
For many brands, SKU rationalization became a crucial tactic during the pandemic, and retailers are increasingly focusing precious shelf space on top-selling flavors that are consistently in high demand. Knowing what is selling and what isn’t (and where) now matters more than ever.
Boosted tea brand Zest Tea uses data to strategize around SKU optimization. For example, the team noticed a product that moved slower overall was excelling in the Northeast, so they focused on regional growth rather than pulling it entirely.
3. Sustainable features and formats
The data is clear on one thing: consumers care more about sustainability. Brands that provide transparency on their packaging and ingredients will stand out in the crowded coolers this year.
The demand to reduce plastic bottle usage has inspired a variety of packaging alternatives, such as alkaline water brand Flow, which uses renewable paper packaging that prevents over 130 million plastic bottles from entering the environment. Kokomio, a brand that debuted at this year’s Expo West, ships their coconut water using coconut husks as insulative packaging material.
Additionally, consumers are seeking ingredients that benefit their bodies as well as the planet. The plant-based milk category has exploded in recent years and is now worth $2.5 billion, according to The Good Food Institute (GFI) and research firm SPINS. The rise of oat milk captured consumers’ attention and taste buds, paving the way for a broader variety of dairy alternatives in the year ahead.
4. Boosts and botanicals
The ‘food as medicine’ movement will only continue to blossom in the beverage aisle as shoppers seek fresh, innovative ways to heal in what is hopefully a post-pandemic world. Brands are meeting the rise in demand for better-for-you beverages with a surge of new product lines and brands. One growing trend is the healthier take on classic drinks — from zero-sugar, probiotic sodas to enhanced water options.
With a fresh interest in self-care, many shoppers turned to functional and botanical beverages, including those that provide benefits like immunity, energy, and gut- or brain-boosting ingredients. For example, beverages enhanced with super mushrooms, from coffees to sparkling beverages, took center stage at this year’s Expo West.
5. A better-for-you take on booze
Consumers are also looking toward better quality, choosing premium alcohol options to create restaurant-like experiences at home. Ready-to-drink cocktails reaped in $686 million in sales last year, SPINS found, and that trend is continuing into 2022. Hard seltzers also continued to draw appeal, while hard kombucha is expected to top $12 million with a 42 percent compound growth rate by 2026, according to a new report.
At the same time, many shoppers are turning to a booze-free lifestyle, and brands are flooding the market with alternatives to suit them. Non-alcoholic beer expected to become a $14B industry by 2031 according to a new market research study, with non-alcoholic craft beer the main draw. But it’s not just beer: Ritual creates zero-proof spirit alternatives, including non-alcohol tequila, rum, whiskey, and gin. The brand has seen its sales skyrocket since it launched in 2019.
“Fifty-two percent of America is actively trying to drink less; 30 percent doesn’t drink at all. Consumers are increasingly interested in balance. They want to have their evening cocktail without sacrificing their morning workout,” explains Ritual co-founder Marcus Sakey. “As the liquor replacement, we’re here to serve that consumer demand – and it’s growing explosively.”
For a list of the sources used in this article, please contact the editor.
Crisp
Are Traasdahl is CEO at Crisp. A third of the world’s food production is wasted before it reaches a consumer, and the food supply chain cannot keep up. Crisp leverages the power of the cloud to connect and analyze disparate retail data sources to provide real-time insights and trends. Food suppliers, retailers, distributors and brokers use Crisp to manage supply more efficiently, reduce waste and skyrocket profitability.
For further information, please visit: www.gocrisp.com