Description

“The non-alcoholic beverage category first and foremost relies on its most important and often inherent functionality, satisfying thirst, to drive consumer purchase, but consumers also look to flavored beverages as a treat. Innovation can marry both function and enjoyment through distinctive flavor innovation, BFY ingredients and added functionality beyond refreshment to engage with consumers – both existing and new.”
– Alyssa Hangartner, Flavor and Ingredient Trends Analyst

Key issues covered in this Report

  • The impact of COVID-19 on consumer behavior and the non-alcoholic beverage market
  • Flavors and attributes consumers look for in non-alcoholic beverages
  • Experience and interest in emerging flavors
  • Behaviors and attitudes impacting non-alcoholic beverage selection

Table of Contents

  1. Overview

    • What you need to know
    • Key issues covered in this Report
    • Definition
    • COVID-19: US context
  2. Executive Summary

    • Top takeaways
    • Market overview
      • Figure 1: Total US sales of non-alcoholic beverages, at current prices, 2018-20
    • Impact of COVID-19 on non-alcoholic beverages
      • Figure 2: Short-, medium- and long-term impact of COVID-19 on non-alcoholic beverages, March 2021
    • Opportunities and challenges
    • Brands challenged to find the sweet spot between health and indulgence
      • Figure 3: Non-alcoholic beverage flavor attitudes, February 2021
    • Classic flavor families should guide innovation
      • Figure 4: Preferred non-alcoholic beverage flavors, February 2021
    • Use layered features to create a bridge between experience and wellbeing
      • Figure 5: Attributes of non-alcoholic beverages, February 2021
    • Non-alcoholic beverage disruptors set up florals for growth
      • Figure 6: Interest and experience with non-alcoholic beverage flavors, February 2021
  3. The Market – Key Takeaways

    • Non-alcoholic beverage categories fared well during the pandemic
    • Innovation in coffee and sparkling water is growing rapidly
    • Align current non-alcoholic beverages with the low/no-ABV trend
  4. State of the Market

    • COVID lifts non-alcoholic beverage sales
      • Figure 7: Total US sales of non-alcoholic beverages, at current prices, 2018-20
    • Functionality should be prioritized to keep pace with innovation
      • Figure 8: Beverage varieties, February 2021
    • Generational divide points to Gen Zs seeking experience and added function
      • Figure 9: Beverage consumption, by generation, February 2021
    • Coffee and flavored water brands lead innovation
      • Figure 10: Percent of non-alcoholic beverage new innovation*, by subcategory, 2016-2020
    • Emerging flavors tied to popular flavor families are ones to watch
      • Figure 11: Top 10 flavors within new non-alcoholic beverage innovation*, 2016-2020
  5. Market Factors

    • Young adults are passing on ABV
    • The lowdown on sugar
      • Figure 12: Desired change in diet, November 2020
  6. Market Opportunities

    • Tap into the growing interest in mocktails
      • Figure 13: Interest in cocktail-flavored non-alcoholic beverages, by generation, February 2021
    • Healthy ingredient renovations can, and should, move past trendy beverages
      • Figure 14: Interest in non-alcoholic beverage attributes, by beverages consumed, February 2021
  7. Companies and Brands – Key Takeaways

    • Tropical and citrus flavors are trending
    • Botanicals add flavor and natural appeal
    • Functionality gives new categories an edge
  8. Product Development – Now

    • Tropical fruits edging into mainstream
      • Figure 15: Consumer experience and interest in tropical flavors, February 2021
      • Figure 16: Pineapple-flavored innovation within CPG
      • Figure 17: Guava-flavored innovation in CPG
    • Ginger beer doubles down on flavor and bubbles
      • Figure 18: Menu Matrix of non-alcoholic beverage flavors, Q3 2017-Q3 2020
      • Figure 19: Ginger beer in CPG innovation
    • Watermelon channels summertime and playfulness
      • Figure 20: Watermelon flavor in recent non-alcoholic beverage innovation
    • Indulgent flavors are hallmarks in coffee, tea innovation
      • Figure 21: Chocolate and caramel in CPG and foodservice innovation
  9. Product Development – Near

    • Citrus refresh
      • Figure 22: Lemongrass-flavored non-alcoholic beverages
    • Pretty in pink florals
      • Figure 23: Rose-flavored non-alcoholic beverages in new innovation
    • Beverage brands are cool with energy
      • Figure 24: Beverage varieties, by generation, February 2021
      • Figure 25: Recent water innovation with energy functionality
  10. Product Development – Next

    • Borrow from the beer aisle
      • Figure 26: Consumer interest and experience with hops as a non-alcoholic beverage flavor, by generation, February 2021
      • Figure 27: Hops-flavored new innovation in non-alcoholic beverages
    • Botanicals sprinkle in natural flavor through expertly paired combinations
      • Figure 28: Flavor family preferences by flavor family preferences, February 2021
      • Figure 29: Non-alcoholic innovation featuring tea-based flavor
  11. The Consumer – Key Takeaways

    • Citrus, berry and tropical flavors lead
    • Blurred beverage lines raise expectations from consumers
    • Flavored beverages are a treat, but consumers are keeping an eye on health
  12. Attitudes toward Non-Alcoholic Beverage Flavors

    • Make emerging flavors accessible and approachable
      • Figure 30: Interest in trying new flavors, February 2021
    • Flavored beverages are a guilt-less path to enjoyment
      • Figure 31: Non-alcoholic beverage flavor attitudes, February 2021
    • Changing palates indicate the need for balance
      • Figure 32: Non-alcoholic beverage flavor attitudes, by generation, February 2021
    • Younger adults looking for healthy indulgences
      • Figure 33: Non-alcoholic beverage flavor attitudes, by generation, February 2021
    • Interest in superfoods edges beyond trendy drinks
      • Figure 34: Non-alcoholic beverage flavor attitudes, by beverage type, February 2021
  13. Preferred Beverage Flavor Families

    • Flavors may change, but flavor families remain constant
      • Figure 35: Preferred non-alcoholic beverage flavors, February 2021
    • Gen X may be a small, but largely untapped target audience
      • Figure 36: Preferred non-alcoholic beverage flavors, by generation, February 2021
    • Interest in herbals, florals driven by niche beverage drinkers
      • Figure 37: Preferred non-alcoholic beverage flavors, by beverage variety, February 2021
  14. Non-alcoholic Beverage Attributes

    • Thirst first
      • Figure 38: Attributes of non-alcoholic beverages, February 2021
    • Building the ideal beverage – a case study
      • Figure 39: TURF analysis – Drink attributes, February 2021
    • Hybrid innovation sets high standards for Millennial consumers
      • Figure 40: Attributes of non-alcoholic beverages, by generation, February 2021
  15. Primary Beverage Flavors Consumed

    • Citrus flavors dominate
      • Figure 41: Primary non-alcoholic beverage flavors, February 2021
    • Indulgent flavors have a small window of opportunity
      • Figure 42: Primary non-alcoholic beverage flavors, by generation, February 2021
  16. Interest and Experience with Emerging Beverage Flavors

    • Fruit flavors both expected and welcome in the beverage aisle
      • Figure 43: Interest and experience with non-alcoholic beverage flavors, February 2021
    • Nudge consumers into emerging flavor profiles
      • Figure 44: Interest and experience with non-alcoholic beverage flavors, February 2021
  17. Appendix – Data Sources and Abbreviations

    • Data sources
    • Sales data
    • Consumer survey data
    • Abbreviations and terms
    • Abbreviations

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