Description
Everything you need to make the right decisions
Providing the most comprehensive and up-to-date information and analysis of the Beverage Blurring market, and the behaviours, preferences and habits of the consumer.
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What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?
Covered in this report
This report provides an overview of the various non-alcoholic beverage categories and the crossover subsegments that exist within the market as it relates to cross-category beverages, aka hybrid drinks, or fusion drinks. The focus of the report isn’t on brands or specific product categories; rather, it delves into the mindset and attitudes of non-alcoholic beverage consumers and the impact cross-category beverages have on consumer preferences and purchases.
Key points included
- Budding yet low hybrid use
- But don’t forget consumers over 40
- Keep innovation on the fringe of familiar
- Hybrids invigorate cluttered beverage aisle
- Diverse opportunity for development and targeted positioning
- Younger, ethnically diverse generations show high engagement
Expert analysis from a specialist in the field
Written by Mimi Bonnett, a leading analyst in the Food & Drink sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.
Category-defying hybrid drinks have been at the heart of much growth and innovation in the non-alcoholic beverage market. While just 13% of US adults overall report drinking hybrid beverages, the most engaged consumers – iGens, Millennials, parents, and Hispanics – are often young and influential. 
Mimi Bonnett
Director – Food and Drink, Foodservice
Table of Contents
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Overview
- What you need to know
- Definition
- What you need to know
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Executive Summary
- Hybrids invigorate cluttered beverage aisle
- Budding yet low hybrid use
- Figure 1: Non-alcoholic beverages consumed, November 2018
- Basic Functionality is Imperative
- Figure 2: Role of non-alcoholic beverages in overall diet, November 2018
- Younger, ethnically diverse generations show high engagement
- Figure 3: Hybrid beverages consumed, by group, November 2018
- But don’t forget consumers over 40
- Figure 4: Interest in trying select types of hybrid/fusion drinks, by generation, November 2018
- Diverse opportunity for development and targeted positioning
- Figure 5: Attributes driving choice of drink, November 2018
- Keep innovation on the fringe of familiar
- Figure 6: Interest in trying different types of hybrid/fusion drinks, November 2018
- What it means
- Hybrids invigorate cluttered beverage aisle
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The Market – What You Need to Know
- Hybrids trigger shifts away from larger categories
- Healthy living trends support BFY hybrid drinks
- Recovering economy helps buoy premium fusion drinks
- Younger, ethnically diverse generations are important to growth
- …but don’t forget those 40+
- Hybrids trigger shifts away from larger categories
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Market Perspective
- In a crowded drink market, it’s a mixed bag of success
- Figure 7: Total US retail sales and forecast of non-alcoholic drinks, by category, at current prices, 2012-22
- Struggling CSDs comprise largest drink category
- Concerns with sugar undercut sales in $18.7 billion juice and juice drinks
- Bottled water growth reflects popularity of BFY drinks
- Energy drinks continue to grow sales
- RTD renaissance brings new life to coffees and teas
- In a crowded drink market, it’s a mixed bag of success
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Market Factors
- Wellness for everyone
- Obesity rates remain high and propel need to reduce sugar consumption, lose weight
- Figure 8: Trends in obesity prevalence among adults aged 20 and over (age adjusted), 1999-2000 through 2015-16
- FDA labeling and sugar taxes raise awareness and cost of sugary drinks
- Aging Boomers attentive to health and seek out low-sugar and diet drinks
- A holistic approach to diet and “Foodceuticals” Trend also shapes demand
- Recovering economy supports premiumization in hybrid drinks
- Figure 9: Consumer Sentiment Index, January 2007-December 2018
- Demographic trends should help drive growth in hybrid drinks
- Figure 10: US Population, by generation, 2013-23
- Younger generations are increasingly diverse
- Figure 11: US population, by race and Hispanic origin, 2013-23
- Figure 12: Distribution of population, by age, race, and Hispanic origin, 2018
- Hispanic consumers represent a key opportunity
- Figure 13: Non-alcoholic beverages consumed, by Hispanic origin, November 2018
- Opportunity for CBD ingredients still blurry
- Wellness for everyone
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Key Players – What You Need to Know
- Mainstreaming and acquisitions set the hybrid landscape
- Challenges in category reach to older consumers and women
- Nourishing, savory drinks and blurred lines with meals
- Fringe interest in CBD suggests education is needed, maybe
- Mainstreaming and acquisitions set the hybrid landscape
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What’s Working?
- Mainstreaming of Bai
- Figure 14: Bai ad featuring Justin Timberlake, 2018
- Harnessing the power of RTD coffees/teas with functionality, flavor, and nutrition
- Tapping into healthy gut trend
- Pair energy with other functions
- Other hybrid drinks focus on hydration, recovery, and detoxification
- Mainstreaming of Bai
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What’s Struggling?
- Missing the boat with health-focused Boomers, women
- Missing the boat with health-focused Boomers, women
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What’s Next?
- Blurring the line between drinks and meals with robust nourishment
- Can CBD infused drinks be mainstreamed?
- Blurring the line between drinks and meals with robust nourishment
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The Consumer – What You Need to Know
- Hybrid drinks garner fringe use, but gaining
- Switching behavior is evident
- Hydration and refreshment are primary drivers, secondary ones are reward driven
- Consumers want energy, consumers want to relax
- Mainstream ingredients still top choice
- Growing use and positive feelings signal good signs for hybrids
- Hybrid drinks garner fringe use, but gaining
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Types of non-alcoholic beverages consumed
- Water, CSDs, and juice are most widely consumed
- Figure 15: Non-alcoholic beverages consumed, November 2018
- Men turn to a wide variety of non-alcoholic drinks, including hybrids
- Figure 16: Non-alcoholic beverages consumed, by gender, November 2018
- Younger consumers enjoy a more varied selection of beverages
- Figure 17: Non-alcoholic beverages consumed, by generation, November 2018
- Middle-income households anchoring the category, for now
- Figure 18: Non-alcoholic beverages consumed, by household income, November 2018
- Parents twice as likely as those without kids to use fusion drinks
- Figure 19: Non-alcoholic beverages consumed, by parental status, November 2018
- Hispanic consumers are highly engaged in many categories, including fusion drinks
- Figure 20: Non-alcoholic beverages consumed in past three months, by Hispanic origin, November 2018
- Males 18-44 are primary hybrid drink consumers
- Figure 21: Non-alcoholic beverage consumption – CHAID – Tree output, November 2018
- Figure 22: Non-alcoholic beverage consumption – CHAID – Table output, November 2018
- Water, CSDs, and juice are most widely consumed
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Role of Beverages in Overall Diet
- Basic functions can be supplemented with more unique ones
- Figure 23: Role of non-alcoholic beverages in overall diet, November 2018
- Younger consumers cite more varied reasons for using drinks
- Figure 24: Role of non-alcoholic beverages, by generation, November 2018
- Middle-income consumers use drinks for wide range of functions
- Figure 25: Role of non-alcoholic beverages in overall diet, by household income, November 2018
- Parents seek drinks for energy, snacks, replacement meals, and more
- Figure 26: Role of non-alcoholic beverages in overall diet, by parental status, November 2018
- Hispanics also use drinks for diverse dietary roles
- Figure 27: Role of non-alcoholic beverages in overall diet, by Hispanic origin, November 2018
- Basic functions can be supplemented with more unique ones
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Functional Attributes That Motivate Choice
- Hydration is key attribute, with calming or energizing also widely sought
- Figure 28: Attributes driving choice of drink, November 2018
- TURF analysis indicates the ideal product mix
- Figure 29: TURF analysis – Functional attributes of interest, November 2018
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- Figure 30: Table – TURF analysis – Functional attributes of interest, November 2018
- Energy is a key attribute for men, health and beauty valued by women
- Figure 31: Attributes driving choice of drink, by gender, November 2018
- Calming and health-related attributes appeal to older generations
- Figure 32: Attributes driving choice of drink, by generation, November 2018
- Parents looking for drinks to help manage busy days, lifestyle
- Figure 33: Attributes driving choice of drink, by parental status, November 2018
- Hispanic consumers over index for interest in varied functional attributes
- Figure 34: Attributes driving choice of drink, by Hispanic origin, November 2018
- Hydration is key attribute, with calming or energizing also widely sought
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Key Ingredients Motivating Beverage Choice
- Vitamins, caffeine, and antioxidants are top ingredients driving purchase
- Figure 35: Ingredients driving choice of drink, November 2018
- TURF analysis shows drinks’ top five ingredients would appeal to 75%
- Figure 36: TURF analysis – Ingredients of interest, November 2018
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- Figure 37: Table – TURF analysis – Ingredients of interest, November 2018
- Ingredient preferences shaped by gender
- Figure 38: Ingredients driving choice of drink, by gender, November 2018
- Older consumers less likely to switch types or look at type of sweetener
- Figure 39: Ingredients driving choice of drink, by generation, November 2018
- Interest in CBDs as ingredient highest among younger generations
- Figure 40: Interest in CBD as ingredient driving choice of drink, by generation, November 2018
- Parents show high interest in a wide range of ingredients
- Figure 41: Ingredients driving choice of drink, by parental status, November 2018
- Vitamins, caffeine, and antioxidants are top ingredients driving purchase
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Interest in Trying Hybrid Drinks
- Three quarters interested in trying different fusion beverages
- Figure 42: Interest in trying different types of hybrid/fusion drinks, November 2018
- Gen X and Millennials most interested in trying new fusion drinks
- Figure 43: Any interest in trying different types of hybrid/fusion drinks, by generation, November 2018
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- Figure 44: Interest in trying different types of hybrid/fusion drinks, by generation, November 2018
- Parents show ample interest in trying more fusion beverages
- Figure 45: Interest in trying different types of hybrid/fusion drinks, part i, by parental status, November 2018
- Figure 46: Interest in trying different types of hybrid/fusion drinks, part II, by parental status, November 2018
- Hispanic consumers interested in trying functional, sparkling, and juice hybrids
- Figure 47: Interest in trying different types of hybrid/fusion drinks, by Hispanic origin, November 2018
- Three quarters interested in trying different fusion beverages
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Consumption Occasions
- Drink choice connected to time of day, hybrids don’t break beyond midday
- Figure 48: Consumption occasion, for all types of beverages, November 2018
- White space for non-alcoholic beverages, especially hybrids found in evening occasions
- Figure 49: Correspondence analysis – Symmetrical map – Non-alcoholic beverage consumption, November 2018
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- Figure 50: Non-alcoholic beverage consumption, November 2018
- Hybrid drink consumption patterns show importance of drink occasion
- Figure 51: Consumption occasion, for hybrid beverages, November 2018
- Drink choice connected to time of day, hybrids don’t break beyond midday
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Attitudes toward Hybrid Drinks
- Alignment with broader consumer trends, feel-good attitudes suggest solid hybrid potential
- Figure 52: Attitudes among hybrid/fusion drink consumers, November 2018
- Gender shapes attitudes and behaviors of hybrid drink users
- Figure 53: Attitudes among hybrid/fusion drink consumers, by gender, November 2018
- Alignment with broader consumer trends, feel-good attitudes suggest solid hybrid potential
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Appendix – Data Sources and Abbreviations
- Data sources
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- CHAID methodology
- TURF methodology
- Correspondence Analysis methodology
- Data sources
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