What is going on in the beverage segment? Like several other categories, overall, the skies are cloudy, with little rain predicted. Sales in the vast category are mixed year-over-year (YoY), but there are plenty signs of strength. Declining subcategories certainly did not take it on the chin, perhaps a good sign for the industry.

The most recent data from Chicago-based market research firm Circana is presented in the chart below, providing sales details about a plethora of non-dairy categories. Of note, refrigerated tea/coffee, sports drinks, and canned juices showed plenty of strength, with each subcategory achieving YoY dollar sales exceeding 5% for the 52-week period ending Aug. 11.

Conversely, refrigerated juices/drinks, bottled juices, ready-to-drink (RTD) coffee/tea, and aseptic juices all suffered year-over-year declines, although none exceeded a drop of more than 2.7% YoY.

Sugar-reduction is definitely a main goal for non-dairy processors. One such company is Boston-based Ocean Spray Cranberries Inc., which released Ocean Spray Zero Sugar Juice Drink — the first beverage from the company with bold flavor, zero grams of sugar, and no artificial sweeteners. Ocean Spray Zero Sugar Juice Drink contains stevia leaf extract that has been further processed and is available in two flavors: Cranberry and Mixed Berry. At the time of the release, Mixed Berry was a new flavor to the brand’s beverage portfolio.

“From full flavor blends to refreshing diet and now bold zero sugar, Ocean Spray is committed to developing product innovations that continually meet the needs and desires of consumers who are seeking out more options for their juice drink,” said Trinh Le, vice president of next-generation beverages and omnichannel marketing at Ocean Spray, in a statement. “We’re excited to be the first brand to introduce this new innovative product in the shelf-stable aisle and continue our legacy of beverage innovation.”

Prior to the launch of Ocean Spray Zero Sugar, the company released a better-for-you juice line, including Immunity Cranberry Acai, Immunity Orange Mango, and Ocean Spray Revitalize Cranberry Pineapple Juice Drink.

However, despite these significant product launches, Roger Dilworth, senior analyst at Beverage Marketing Corp. (BMC), Wintersville, Ohio, said that beverage-makers are still searching for what formulation will resonate with consumers.

“[Sugar reduction trends] haven’t taken full hold yet, as 50% orange juice blends have faded in the marketplace,” he shared. “Similarly, reduced sugar hasn’t pushed the needle in fruit drinks either. Marketers continue to try to crack the code, as with Ocean Spray’s newly announced Ocean Spray Zero Sugar Juice Drink.”

Inflationary pressure

Aside from consumer preference, another factor has impacted the juice market: inflation.

“Fruit beverage volume is estimated to be down in the 3% range for 2023, based on preliminary data, with revenues up by a similar amount due to inflation,” BMC’s Dilworth explained. “Juice drinks have been performing nominally better than juice.”

Dilworth added that the rise in prices has caused a shift in consumer purchase patterns.

“… [T]he higher price points have influenced some shoppers to trade down from chilled to shelf-stable, while news of the spiking price of orange juice futures have even reached the mainstream financial press,” he noted.

Beyond traditional juice and juice drink segments, inflation also has impacted premium segments, such as cold-pressed/high-pressure processed (HPP) juices.

“There is a niche consumer who buys these products, but their high price points, especially continuing into the near term, will present challenges particularly if a recession should finally hit in 2024,” Dilworth said.

Despite such challenges, Dilworth shared that, as consumers see a deceleration of inflation within juice, it could help the category stave off volume attrition.

“If inflationary pressures continue to subside, volume may improve — barring a recession — but will likely still be flat to slightly negative,” he explained. “On the flip side, revenue growth may decelerate to the 0 to 1% range.”

Still, Mintel’s research shows that consumers continue to view juice and juice drinks as an accessible avenue to consume necessary nutrients. As for innovation, Mintel notes the importance of enhancing flavor and nutrition in juice, but that manufacturers should not try to change the identity of the juice category.

“Classic flavors and functionality will always have a crowd; presenting these with a twist can make the core base do a double take,” the research firm states. “Add flavor dimension and connect ingredients to functionality to gently flip the script while remaining true to juice’s dual draws of wellness and enjoyment.”

Tea Trends

Interest in well-being has kept the tea and RTD tea market afloat.

“The different varieties of teas aid consumers on a health and well-being journey,” says Sally Lyons Wyatt, global executive vice president and chief advisor for consumer packaged goods and foodservice at Circana. “The many different functional benefits align with consumer needs for mental, physical, and emotional well-being.

Beverage Industry explored how sugar reduction trends have influenced the RTD tea market, even as consumers focus on overall well-being.

“RTD tea is increasingly being positioned as a better-for-you alternative to traditional soft beverage categories such as carbonates, leaning on the positive consumer perceptions of tea as a natural, healthy ingredient,” Siân Edwards, director of strategy and insights at London-based Finlays, said. “A key aspect of this is low-/no-/reduced-sugar claims, which are now present on a third of RTD tea launches in the U.S. market. This is driving category growth and engagement from consumers seeking healthier alternatives.”

Lyons Wyatt noted that the tea categories have a variety of options for consumers, including both sweetened and unsweetened.

“Unsweetened is a smaller share, but in some segments growing, while in others, sweetened is preferred,” Lyons Wyatt told Beverages Industry. “It all comes down to consumer choice. When sugar content data is observed, there has been traction for unsweetened, real sugar, no sugar, cane sugar, and Splenda.”

Edwards shares that, aside from sugar content impacting the U.S. tea market, treat and indulgence trends are driving consumer behavior as they seek affordable indulgences in a time of economic concern.

“This is manifested through category premiumization in the indulgent space (e.g. growth of bubble tea) and the health and well-being space (e.g. organic, single-origin premium teas),” he says. “Bubble tea in particular is such an exciting development, with fast-growing chains and tea beverages costing upwards of $7, demonstrating that even in the mature tea category, there are high-opportunity pockets of growth and innovation.”

Lyons Wyatt pointed to consumers seeking variety as well as affordability in tea purchases.

“The quest for the entry points and/or value-priced beverages will be a trend affecting all beverages,” she notes. “This means retailers need an assortment of sizes, from single-serve to large (e.g., gallon) size offerings.

“Consumers are also seeking excitement and unique flavors in their beverages,” she continues. “In teas, we do see some new flavor varieties, but the main shares are for the traditional tea flavors. Therefore, exciting and unique flavors should be used to refresh the shelf, aim for one extra product in the basket (increased buy rate), and/or gain new users.”

Looking ahead, Finlays’ Edwards suggested that the U.S. tea market will continue to see growth in the next year.

“We’re looking forward to a really positive year for all tea categories, as consumer confidence returns, innovation drives excitement and brand owners look for ways to differentiate in an increasingly busy marketplace,” he says.

Dairy Foods RTD highlights

Beyond the products previously noted, RTD beverage products were featured heavily throughout the year on www.dairyfoods.com, with new companies among them. One such company, Kiid Coffee, prides itself on being the “world’s first coffee for kids,” created by David Sanborn and his 8-year-old son, Ethan.

Available in three flavors, Original, Caramel, and Choco’Latte, Kiid Coffee originated from a simple idea. Ethan and his younger brother were always excited to try sips of their parents’ morning brew. Hence, the company created “what is not just a delicious drink for kids, but one loaded with more vitamins, essential minerals, antioxidants, and fiber than any other kids' drink on the market.”

Zeroing in on long-established brands, Prairie Farms expanded its presence in the RTD iced coffee category with two new single-serve options in Mocha and Caramel flavors. 

“Our award-winning single-serve milk lineup has consistently positioned Prairie Farms as the market leader for many years. Now, our half-gallon iced coffee has paved a successful path for new single-serve iced coffee options, allowing us to serve more coffee lovers than ever before. It delights with every sip, and we're proud to say it’s made with 100% real milk,” said Matt McClelland, CEO/executive vice president of Prairie Farms Dairy.

International Delight, a Danone North America brand, released REESE’S Iced Coffee cans, available now at select convenience, grocery, and dollar stores nationwide in 15-ounce cans. The company backed the launch at participating 7-Eleven, Speedway, and Stripes stores, with plenty of marketing muscle.

Also certainly noteworthy this year was Chobani’s acquisition of La Colombe Coffee Roasters. The company introduced Draft Latte 11-ounce cans in Double, Triple, Mocha, Vanilla, and Caramel flavors. 

“Chobani and La Colombe is a perfect union of like-minded brands. They share a commitment to quality, craftsmanship, and impact, as well as a belief that delicious, nutritious products should be available to all,” says Chobani Founder and CEO Hamdi Ulukaya. “Just as Chobani disrupted the yogurt industry back in 2007, we’re excited for La Colombe to disrupt the high-growth ready-to-drink coffee category with a better choice for people who are looking for more cold coffee options.”

Shifting to RTD tea, Uncle Matt’s Organic, purveyor of organic orange juice, launched three RTD refrigerated brewed black tea varieties. The teas are certified organic, meeting the highest standards of quality and sustainability, the Clermont, Fla.-based company says. 

Sports snapshot

On the sports nutrition front, Muscle Milk, a brand of CytoSport Inc., announced its entrance into the plant-based category with new plant-based protein shakes containing 30 grams of protein per serving. Available in two creamy flavors, Chocolate and Caramel Vanilla, Muscle Milk Plant Protein is the first-ever plant-based line from the sports nutrition brand, the company says. 

Another significant sports nutrition product launch in 2024 were Nurri’s Protein Milk Shakes, offering 30 grams of protein, 1 gram of sugar, and essential nutrients. It is packaged in 11-ounce cans and is available at Costco locations nationwide. This launch marks Nurri’s entry into the milk-based beverage market.

“Nurri’s mission is make ‘nurrishment’ better, making better-for-you products even more flavorful and fun,” says Adam Tollefson, director of marketing. “We’re excited to kick off the brand with our low-sugar, high-protein, shakes, essentially a creamy, indulgent milkshake in a can.”

Finally, although not a new product launch per se, Dairy Foods visited Westrock Coffee Co.’s Conway, Ark., facility, opened earlier this year, placing a huge bet on the future of RTD beverages. The 570,000-square-foot facility spanning 45 acres is now the largest roast-to-RTD manufacturing facility in North America, the company says.

“The opening of the Conway facility marks a critical milestone for Westrock Coffee,” says Scott Ford, CEO and co-founder of Westrock Coffee. “In line with our commitment as a world leader in beverage innovation, we [launched] the largest integrated beverage facility of its kind. This uniquely positions us as a leading force in beverage production across any channel and beverage format.”

Editor’s note: The information presented here was culled from multiple Beverage Industry reports. Dairy Foods provided information at the beginning of the story, as well as added the final section of this story.