Let’s face it. Turning the page on a new calendar year doesn’t mean leaving behind all that happened before. Last year found consumers still adjusting to two years of COVID pandemic impacts. 

Today’s consumers still balance so many real-life issues and ideals. Most look for overall money-saving value and continue to reduce non-essential spending at restaurants, grocery stores, and on alcohol. And when it comes down to supermarket in-aisle purchase decisions, they’re not only weighing price but also competing interests for a new or novel experience (with unique flavors, ingredients, textures, colors and taste); essential, functional benefits for physical and mental health; and even environmental health for the planet. 

Essentia

While 85% of consumers say rising inflation has had an impact on the way they shop overall, there are areas in which they are not willing to compromise (NPD America’s Health Pulse: Closing the Gap Between Wants and Needs, 2022). Today’s brands are being pushed to be different, accessible, and to seem premium and/or customized—all while driving cost savings for their own operations.

Consumers are considering price, convenience, functional benefits, experience, and taste when reaching for new products. That has beverage formulators striving for the ultimate “it” factor that makes the product essential. One interesting new example is Hydralyte’s latest collaboration, a ready-to-mix hydration beverage mix developed with actress Shay Mitchell. A specialist in mixers, Siren Shrub Company LLC, Stevens Point, Wis., created a canned coffee shrub that touts the many benefits of apple cider vinegar. 

Among the top 100 most innovative companies are the usual suspects, including PepsiCo, Coca-Cola, Nestlé, and Unilever. What’s interesting too, here, however, is that retailers including Walmart and Target make the list for their latest private label category efforts (BCG Most Innovative Companies Report, 2022). With the expansion of their in-house lines, we’ve seen new products from GoPuff’s Basically and Goodnow brands, Target’s Favorite Day, and Kroger’s Simple Truth. 

It’s likely we’ll see these sizable investments prompt an added level of competition as more accessible and affordable options appeal to consumers. Sixty-seven percent of consumers have switched to generic brands to save money at some point in 2022, suggesting that inflation may reduce brand loyalty but won’t reduce interest in trying new products (Morning Consult, 2022). Target’s Casa Cantina line of ready-to-drink cocktails and Aldi’s Pacific Fruit wine-based spritzers are just a few new products playing into consumer demand in the alcohol category—while offering shoppers a more affordable price point.

Plant-based products have become more mainstream but these offerings carry higher overall prices than their animal-based counterparts. In spite of the lack of cost parity, we still expect key types to grow—including oat and almond milks. Oat milk dollar sales were up 41.6% during a 52-week period ending November 2022, according to data from IRI. Separately, Food Manufacturing reports that almond milk market is expected to grow at a CAGR of 15.2% from 2022 to 2023.

Environmental

Younger generations are defining trends driven by what they value most and they support brands and products that resonate with them. #EcoTok has been a key indicator of the proliferation of environmentally-friendly alternatives to everyday items and from July 2022 - November 2022, the number of videos using this hashtag grew by approximately 42% on TikTok

Consumers have become more familiar with alternative sources of protein as compared to animal-based ingredients. And we’re seeing an emerging group adopting “climate-forward” diets. More than 50% of surveyed respondents said environmental sustainability plays a more prominent role to them today than it did 12 months ago (The IBM Institute, 2022). 

There are some interesting, entrepreneurial brands addressing this demand. One is Peachy Inc., a Saratoga Springs, Utah, firm that makes women’s pre-workout supplements. Supplement mix portions come in “pods” that consumers simply add to water in a beverage shaker. The pods are encased in an edible, dissolvable film so there’s no individual portion packaging. 

Another innovative approach involves Cove PBC, Los Angeles, whose new water bottle (sold by online invitation only) is made from polyhydroxyalkanoate (PHA), a biodegradable, and compostable plastic alternative made from living organisms. 

We expect to see less overall packaging as well as more sustainable packaging. Likewise, the trend also will move forward with more geographically conscious ingredient sourcing and alternative protein sources. Diverting and re-using former ingredient waste streams—upcycling—is another growing and important related trend. In addition to oat and almond milks, we project greater volume in barley milk. Here, Molson Coors uses upcycled barley for its Golden Wing milk alternative. Also slated to debut this year is another upcycled barley milk from start-up Bygg Foods, Petaluma, Calif.

Experiential

Executives across the food and beverage industry placed expansion and innovation at the top of the list of business strategies for 2023, with 72% of surveyed respondents ranking it among their top three areas to address (Marcum LLP, 2022). Consumers are increasingly looking for healthier and more sustainable options and processors are responding with creative new products packed with functional ingredients, and in unique formats.

We’ve seen offerings such as Roxie, Molson Coors’ first non-alcoholic canned cocktail; a ready-to-drink bubble tea from BUBLUV Inc., New York, N.Y.; and cannabis-infused seltzers from Endless Coast. Perhaps they are not the most “groundbreaking” products the market but they certainly reflect consumers’ interests and their preferred experiences (e.g., bubble tea at home, mocktails, a full-body high from THC and CBG). 

For the record, Imbibe sees today’s beverage flavor profiles shaped by exotic fruits, “alcoholish” concpts, and global ingredients and cuisines. Imbibe’s own Percolator consumer insight survey found 47.3% of consumers interested in an Aperol Spritz flavored sparkling water, 46.4% for calamansi flavor, and 30.4% for horchata (Imbibe Percolator, n=300, U.S. adults, 2021). 

Meanwhile, it’s also clear that consumers are interested to learn about how and where technology can improve their lives. Search interest in “vertical farming” is up 280% during the past decade and smart kitchens (where kitchen appliances are connected by WiFi or Bluetooth) are expected to grow at a CAGR of 18.6% through 2028 (Exploding Topics, 2022). 

In the end, it’s clear that most of today’s trends are as fluid as the beverages we study (and formulate). 

Erin Costello is the Communications & Events Associate at Imbibe, a product development company and ingredient supplier in Chicagoland. With a passion for marketing, particularly in content creation, copywriting, and campaign strategy, Costello helps plan and implement communication strategies across multiple platforms. Learn more about Imbibe at www.imbibeinc.com.