The beverage category is in transition

by Keith Nunes
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KANSAS CITY — The Beverage Marketing Corp. is forecasting total liquid refreshment beverages (L.R.B.) will experience growth in 2014. The growth comes at a time when the carbonated soft drink business, one of the largest components of L.R.B., is in decline. Filling the gaps and supporting growth are such categories as ready-to-drink coffee, bottled water, energy beverages, sports beverages and R.-T.-D. teas.

The B.M.C.’s forecast highlights a market in transition. Consumers may be becoming more focused on health and hydration in their choices of bottled waters and sports beverages, while also choosing functional options that may offer energy boosts throughout the day. Carbonated soft drinks have often been described as “empty calories” and it appears such messaging may be resonating as consumers choose other beverage options.

The L.R.B. experienced a 2.2% volume increase during the first half of 2014, according to the B.M.C. The volume growth occurred even though carbonated soft drink volume declined 1% during the same period.

The first-half beverage consumption data is promising, especially since L.R.B. volume fell 0.1% in 2013 compared to 2012. Carbonated soft drink volume fell 3.2% during that period and the B.M.C. noted that niche categories continued to outperform traditional mass-market categories.

Innovation has been a hallmark of the beverage category, particularly during the past five years. New forms, flavors and applications have given consumers more choices and they are experimenting.

The beverage category is in transition and that is a positive for ingredient manufacturers and product developers. If consumers continue to demand products that offer health or functional attributes, the industry may see greater innovation in what was once a staid category.
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