LAND OF OPPORTUNITY
Discover the hottest trends in US natural beverages and explain why the us beverage market is such a land of opportunity for brand owners and operators.
Words: Stacy DeMars and Mia Baroni
3D Artwork: Ricardo Rey
AMERICA. LAND OF OPPORTUNITY. A VIBRANT MIX OF PEOPLE FROM ACROSS THE GLOBE SEDUCED BY THE AMERICAN DREAM OF LIMITLESS POSSIBILITY. AND – WE WILL ARGUE – NOWHERE DOES THE AMERICAN DREAM MANIFEST AS FULLY AS IT DOES IN THEBEVERAGE MARKET…
In 2023, the U.S. beverage industry is worth a super-sized $760 billion[i] and prides itself on offering more products than you could hope to consume in several lifetimes. This significant sector of the economy is providing a market that is constantly growing, seeking new ways to capture consumers’ attention, and creatively fulfilling their evolving demands. From wellness beverages to indulgent bubble milk teas, the US beverage market is, in our humble opinion, where it’s at for long-term sustained growth.
Growth is strong too within the natural beverages space with the market expected to reach $220b by 2024[ii]. Driven by consumers looking for products that deliver additional health benefits, the US natural and organic food and beverage space is one of the most dynamic categories for functionality, hydration and energy, and we are seeing lots of innovation in the natural category.
So, what drives the effervescent natural beverages market? Charley Snell, CEO of Finlays Americas believes a key reason why the US beverage market continues to flourish is that the US has the right people, talent and enthusiasm to bring fresh ideas to market.
He explains, “For us at Finlays, what is most exciting about the future of the beverage industry is that what we do brings out so much passion in people. Whether that be for what we are doing now or in the future, our team loves being a part of the beverage space and consumers love trying new beverages.”
“The industry is driven by people who are deeply committed to creating exceptional beverages and delivering memorable experiences to their customers. We get to partner with amazing people in revolutionary categories who genuinely care about what they do and that gets me excited for what is next at Finlays.”
So, what does the future hold for this ever-evolving space? And what role will natural beverages play? We asked experts from across our business to share insight on the inspiring trends and untapped potential in natural beverages, and to offer guidance on how brand owners and operators can capitalise.
Lifestyle has become a major trend in beverages as Americans cultivate healthy habits and seek to balance busy lives. The desire for grab-and-go products plays a key role in consumer demand for beverages in convenient formats and packaging. From single-serve pack sizes for on-the-go sipping, to multi-serve bottles that offer a coffee shop feel at home, consumers have been reaching for ready-to-drink (RTD) beverages more frequently post-pandemic. In fact, US consumers are responsible for nearly a third of all global revenue from non-alcoholic beverages sales[iii].
What’s Next? Expect to see unique variations of beverages that support the American consumer’s curious tastebuds, active lifestyles, and wellness goals. Jean Koffinke, Director of Retail Sales explains the trend from Finlays perspective, “Brand owners are increasingly coming to us for support in tapping into these trends. The key, from our perspective is to blend unique consumer insights, applications expertise and the right mix of packaging formats to co-create products that outperform the market."
Lifestyle has become a major trend in beverages as Americans cultivate healthy habits and seek to balance busy lives
Caffeine, particularly in the form of “clean energy,” is at the top of consumers’ minds. In a study by GlobalData, 73% of US consumers said energy-boosting ingredients were ‘nice to have’ or ‘essential’ when making purchasing decisions.3 No category has seen proof of this sentiment more than coffee. Over the last 30 years, consumers have developed a discerning taste for high-quality coffee, increasing demand for specialty coffee beans, new brewing methods and elevated flavour profiles.
US consumers increasingly becoming coffee aficionados has led to greater focus on sustainability and supply issues. About half of coffee drinkers say they are more likely to buy coffee when they see ‘Fair priced paid to farmer’ (54%), ‘Grown on farms that treat workers well’ (51%) or ‘Grown in an environmentally sustainable way’ (47%)[iv].
This growing focus on sustainability could be important as coffee supply faces a number of challenges. Stephanie Thornton, Coffee Product Marketing Manager explains, “Climate and economical changes pose a risk to supply . In the future, we might see an alternative coffee wave that helps secure supply. Robusta beans, for example, are growing in popularity as this resilient coffee type becomes more recognised as a quality source of flavour and supply.”
What’s Next? Consumer preferences evolving from “cup of Joe” to “coffee aficionado” offer phenomenal opportunities to supercharge the coffee category for decades to come. At Finlays, we believe the key will be offering elevated experiences and seeking ways to tap into consumers’ growing interest in sustainability.
Since its maturation, ready-to-drink tea has not yet had a ground-breaking non-alcoholic adaptation in the United States. “Tea has so much runway in the US. It has so much to offer as it relates to all the components that people are looking for in a beverage. These amazing benefits are recognised globally, but there are major differences in how tea is perceived here versus globally.” says Allison Cash, Chief Commercial Officer.
Tea checks all the boxes for the modern consumer, as one of the original plant-based ingredients with reported health claims to support improvement in focus, calmness, anti-inflammation and numerous other benefits. Yet, there is an untapped potential in tea. “Cold brew revolutionised the RTD coffee market as we know it today. It was a moment that changed the trajectory of the industry. RTD tea is still waiting for its own moment… but it’s coming” says Stacy DeMars, Marketing Manager, Brand.
What’s Next? The key to the growth of tea lies in the industry capturing the imagination of the consumer and driving understanding of its nuances and health benefits, delivering excitement into this category. This might mean working to educate on how tea varieties and growing regions can influence flavour profiles and preferences, better articulating tea’s “health halo” in branding, or finding new ways to create tea experiences.
With their exceptional work ethic, is it any wonder Americans can’t get enough of energy drinks, and today the market today is worth $23.5bn and growing at a CAGR of 8.3%[v]. But change is coming as US consumers start to seek more natural alternatives in the form of “clean energy” drinks. These are powered by natural caffeine, derived from tea, and offer a healthier alternative in the eyes of the consumer.
What’s next? Brands such as Zoa and V8 Energy have already stolen share in this category, and we expect this trend to continue at speed. The global health and wellbeing megatrend can’t be ignored, and brand owners can capitalise by seeking to add healthier, more convenient, and more sustainable natural energy products to their portfolio.
THE KEY TO THE GROWTH OF TEA LIES IN THE INDUSTRY CAPTURING THE IMAGINATION OF THE CONSUMER
Natural caffeine
RTD tea
Evolving coffee culture
Ease and convenience
For those with the bravery and imagination to chase the American dream, the US beverages market offers limitless potential. The only question you should ask is, “how big do I want to go?”.
And it wouldn’t be American of us to finish this article without some good old-fashioned American hustle about why you should choose Finlays as your beverage partner. Well, for one we are laser-focused on helping the US brand owners and operators realise the opportunity that lies before them by offering full-service solutions from ideation to commercialisation. Not only that we partner with you every step of the way to help you create bespoke (custom) beverages that consumers crave.
So, if you want to want to supercharge your beverage portfolio, let’s start the conversation.
Charley Snell, CEO Finlays Americas
GET IN TOUCH VIA EXTRACTS@FINLAYS.NET
References[i] Zippia. “15+ U.S. Beverage Industry Statistics (2023): Refreshing Trends, Facts, and Stats” Zippia.com. 6 March 2023 / [ii] Food Navigator / [iii] Statista. “Non-Alcoholic Drinks – Worldwide” statista.com 2023. / [iv] National Coffee Association National Coffee Drinking Trends Spring 2023 / [v]Verified Market Research
