The beverage industry is innovating at a pace faster than ever seen before. New product categories are being created, existing product lines are being extended, and once distinct product segments are now being blurred. Last year, one client of ours alone purchased 536 unique SKU’s with a single beverage provider. For beverage consumers and enthusiasts, as funny as it sounds, there perhaps is no better time to be alive.
Key Themes for Beverage Innovation in 2022
1. Supply Chain Realities
Disruptions caused by the pandemic continue to abound. In 2022, the industry is experiencing a continued push for innovation while simultaneously balancing the need to block and tackle on delivering core products amid ongoing supply chain and labor issues. Beverage companies continue to undergo SKU rationalization to prioritize the most crucial packages for their customers. While signs seem to point to this trend subsiding as the year continues, we expect the supply chain realities to provide a degree of constraint on innovation from the primary beverage manufacturers.
2. Booze
With per-capita alcohol consumption increasing 14% during the pandemic, perhaps it is no surprise that booze is a key trend in 2022. What started as an experiment with the primary beverage companies now appears to be a full-fledged strategy. Each company is pursuing diverging plans to overcome the complex alcoholic distribution environment and add products to their alcoholic lineup. Historically non-alcoholic brands are creating alcoholic variants, and traditionally soft categories are turning into hard categories (spiked seltzers, spiked juices, etc.). On the other end of the spectrum, breweries and spirits companies are producing non-alcoholic beers and packaged cocktails products, aimed at alcohol consumers who love the taste of their favorite hard drinks but are trying to limit alcoholic consumption.
3. Functional Ingredients
Beverage consumers are not just looking for a satisfying or enjoyable taste in their drink, but are now expecting their drink to do something for them, be it providing a boost of energy, strengthening their immune system, reducing stress, promoting healthy sleep, or other benefits. Perhaps driven by a renewed focus on immunity during the pandemic, new beverages that provide a real or perceived functional value are in demand.
Innovation Pays
Keeping a pulse on market trends ensures the needs and desires of your customers get met. Not only is innovation necessary to keep up with shifting consumer trends, it also yields higher retail sales. One recent study showed that consumers were willing to pay 21% more for brands that they considered to be innovative. Moreover, 90% of consumers revealed that innovation was a key driver in brand preference. According to a second study, two out of three consumers would be willing to pay more for food and beverage products that they considered to be “innovative”.
Sampling of New Beverage Products Slated for 2022
Baya Energy
Baya is a product of a joint venture between PepsiCo and Starbucks, which features caffeine extracted from coffee fruit as well as added vitamin C. While derived from the coffee fruit, this product distinctly does not taste like coffee and instead is debuting with three flavors: mango guava, raspberry lime, and pineapple passionfruit. This marks the first non-coffee energy drink under the Starbucks brand.
Hard Mtn Dew
PepsiCo has plans to extend its Mountain Dew line into the alcoholic space with Hard Mtn Dew. Partnering with Boston Beer Company (which produces Sam Adams and Truly Hard Seltzer), this will be PepsiCo’s first foray into the alcoholic category. The beverages will have 5% alcohol by volume and will be available in three flavors: original, watermelon and black cherry. This follows significant brand extensions for Mountain Dew, including Mountain Dew Energy (formerly Mountain Dew Rise Energy).
Loftiwater
Founded by the former CEO of the coffee enterprise La Columbe, Loftiwater is a new sparkling water (referred to by the company as “shimmering water”) that uses no carbonation in its production. Infused with a proprietary blend of gases to produce “microbubbles”, the product aims to produce a product without “burn” or “bite” and which is “deceptively sweet” without the use of sweeteners or sugars.
Minute Maid Aguas Frescas
Expanding on its Minute Maid juice line, Coca-Cola has plans to debut Minute Maid Aguas Frescas, an enhanced water product. Launching with three flavors (mango, hibiscus and strawberry), Minute Maid Aguas Frescas will sit alongside Barrilitos Aguas Frescas, a dispensed line, in Coca-Cola’s aguas fresca portfolio.
Pepsi Nitro
Will 2022 be the year that Pepsi Nitro is released for general consumption? Initially teased in January 2019, PepsiCo’s nitrogen-infused version of its signature cola product has yet to hit retail shelves in a ready-to-drink format.
Simply Spiked
Earlier this year, news broke about Coca-Cola’s third alcoholic beverage offering: Simply Spiked. With a partnership with Molson Coors (which also produces Coke’s alcoholic version of Topo Chico), Coke will release the new 5% alcoholic beverage later this summer. It will be available in four flavors: signature lemonade, strawberry lemonade, watermelon lemonade and blueberry lemonade. By net revenue, Simply is Coke’s second-largest brand.
Snapple Elements
2022 will see the reintroduction of Snapple Elements, which was first introduced in 1999 and then discontinued in 2008. The refreshed brand’s flavors will include Rain (agave cactus), Fire (dragonfruit) and Air (prickly pear and peach white tea).
Optimize Beverage Revenue with the Right Offerings
Are you unsure which beverage products will move the needle and yield higher customer satisfaction and improved beverage sales? Optimizing the beverage category can be critical to the bottom line, and producing just one point of attachment lift can yield outsized results. Introducing the right products – at the right time and in the right locations – is both an art and a data science.
Contact us for more information on our category management service and an assessment of your current beverage program.
Related Resources:
Most Anticipated New Beverage Products of 2021
How Exclusive Beverage Deals Lead to Increased Sales
How to Increase Beverage Revenue: The 5 P’s of Growing Beverage Incidence
