CPG Beverage Industry:

US Market Overview:

The US beverage market is vast and diverse, valued at $359 billion. It includes an exploding range of products, with bottled water and carbonated soft drinks reigning as the two largest segments. However, consumption patterns are shifting significantly, driven by evolving health trends and lifestyle changes:

Bottled Water vs. Carbonated Soft Drinks: Bottled water is on the rise as more Americans prioritize healthy hydration. In contrast, carbonated soft drink consumption is steadily dropping, with private-label bottled water brands leading the charge toward healthier, cost-effective choices.

Energy Drink Boom: The energy drink market is buzzing with a 9.9% sales spike, surpassing $22 billion. Innovative products and savvy marketing are capturing the attention of health-conscious and active consumers, fueling this rapid growth.

European Market Overview:

The European beverage market, valued at $527.2 billion in 2023, is set to grow to $694.4 billion by 2029. While sharing some similarities with the US market, Europe boasts unique characteristics, particularly in health trends and sustainability efforts:

Healthy Longevity: European consumers' focus on healthy aging is driving demand for low-sugar, organic, and functional beverages. Sparkling water enhanced with vitamins and antioxidants stands out, with online sales soaring 8.8% over the past year.

Non-Alcoholic Beverage Surge: The non-alcoholic wine and beer market hit €8.6 billion in 2023 and is projected to almost double by 2032. While still a tiny percentage of the overall alcoholic drinks market, non-alcoholic alternatives comprise one of the fastest-growing subsectors, with Western Europe leading the charge.

Sustainability Focus: Sustainability is an increasingly hot topic among European consumers, prompting regulatory initiatives like the European Parliament's directives on environmental claims and labeling.

Instant Hydration:

The market for instant hydration products is exploding, seeing a stunning 73% CAGR from three years ago. Powdered hydration products are leading the charge - growing 37% from last year - driven by engaging campaigns and fresh product launches aimed at Gen Z.

Functionality is King:

Drinks that offer benefits beyond hydration are the new market stars, as the functional beverage industry is projected to hit $190.24 billion by 2028. Ingredients like mushroom infusions and superfoods (magnesium, ginseng, ashwagandha) are particularly popular and trending, especially among Gen Z and Millennials.

CBD drinks brand Goodrays has launched a functional drinks range where each flavor-enhanced can contains 30mg of CBD, offering consumers reduced anxiety, better sleep, and less muscle and joint pain.

Beyond Caffeine:

Energy-boosting drinks with higher caffeine levels are seeing exploding demand. Online searches for "high caffeine" jumped by 113% from 2023, linked to increases in physical activity.

UK brand Bizzi launched a series of innovations into the ready-to-drink coffee industry, with the first cold brew coffee and matcha with collagen. Adding a range of innovative flavors like Vanilla & Turmeric and Ceremonial Grade Matcha, each can is infused with 10g of bovine collagen, vitamin C, and zinc, making Bizzi a unique entrant as a wellness-on-the-go DTC brand.

Sugar-Free:

There's a significant shift towards sugar-free alternatives, with beverages being sweetened with natural ingredients like stevia and monk fruit. Research firm NielsenIQ’s data shows that 30% of US consumers are seeking low-sugar options, and 29% look for no added sugar, further driving innovation in the beverage industry .

Capri Sun has reformulated its original juice drink pouches with monk fruit concentrate, which reduces the sugar per serving by an average of 40%. This is the largest renovation to the Capri Sun product line since Kraft Heinz launched the brand in 1986.

Non-alcoholic:

The non-alcoholic beverage category has finally become mainstream, as fewer young adults drink alcohol today than two decades ago. US sales for non-alcoholic beer, wine, and spirits climbed 32% in 2023, with insurgent brands having the greatest impact, and accounting for more than 35% of this growth. Major brands are expanding their offerings to cater to teetotalers. Looking ahead, regulations like the potential tax increase on high-ABV beers in the UK and the increasingly saturated space for non-alcoholic alternatives promise to further shake up the landscape.

Diageo launched alcohol-free versions of its Captain Morgan rum and Seedlip spirit, while Molson Coors introduced the zero-proof canned cocktail brand Roxie. Meanwhile, brands like Mockly and Grüvi have successfully carved out niches by providing alternatives that maintain the taste and experience of traditional alcoholic beverages.

Eco-Friendly Packaging:

Brands are moving towards eco-friendly packaging, using recycled materials and reducing plastic waste. Gen Z and Millennials are particularly vocal about this, pushing brands to minimize their environmental footprint. Initiatives like Deposit Return Schemes (DRS) are gaining ground, promoting recycling and reducing litter.

Vienna-based Waterdrop is making waves with its waterless beverages. These pressed tablets, made with real plant and fruit extracts, create flavored water with a tiny carbon footprint and minimal packaging. After taking Europe by storm, Waterdrop's “micro-drinks” are now making a splash in the US.

UK brand KISSD Water is an eco-friendly beverage packaging innovation that speaks directly to the modern consumer’s conscience. Packaged in an 88% plant-based, fully recyclable cardboard carton made from sustainable paper and sugarcane, KISSD offers a conscientious alternative to traditional plastic bottles. Even the cap is designed from sugarcane leftovers, ensuring maximum recyclability.

Sustainable Products:

Eco-conscious consumers are driving the demand for sustainable and health-centric beverages. Alternative milks like oat and soy are booming, with sales soaring by 10.7% and 5.5%, respectively. The alternative milk market hit $3.1 billion despite inflation, showing strong consumer commitment. Plant-based proteins are also on the rise, with products like brown rice protein shakes and nut-based milks gaining traction. Bain’s Consumer Lab research indicates that about 30% of US consumers plan to increase their intake of plant-based substitutes.

Danone has opened a new plant-based production facility in France. This facility, launched with a €7 million investment, features two high-speed production lines capable of producing over 300,000 liters of Alpro’s oat-based drinks daily, underscoring Danone’s strategic shift towards plant-based products.

Private Label’s Growth:

Private label brands are booming as consumers seek quality, cost-effective alternatives to name brands. Private label sales accounted for nearly 21% of US grocery industry unit sales in 2023, with more than half of shoppers planning to buy more store brands in the future. Walmart's bettergoods line, featuring 300 items priced under $5, highlights this trend. The line focuses on culinary experiences, plant-based options like chocolate almond milk, and products "made without" certain ingredients, appealing to price-sensitive and health-conscious consumers.

Ready-to-Drink:

Busy lifestyles demand convenient beverage options. Ready-to-drink formats and single-serve packaging are gaining popularity. For instance, cold brew coffee has surged by 300% since 2016, catering to on-the-go consumers seeking quick energy boosts and hydration. Ready-to-drink beverages offer a quick pick-me-up without the hassle of preparation.

La Colombe Draft Lattes created its draft lattes in cans to offer a convenient and premium coffee experience, complete with a frothy layer of milk. These ready-to-drink innovations have become favorites for those looking for gourmet coffee fixes without the wait.

Pack Size Matters:

Brands are offering a variety of pack and volume sizes to meet diverse consumer preferences. Single-serve, multi-packs, and variety packs cater to both cost-conscious and adventurous consumers. Some consumers prefer smaller trial portions, while others opt for larger multi-packs, like 24-packs and 30-packs, reflecting a shift towards bulk purchasing in club stores. Beverage combo packs saw over 2,000% growth last year, highlighting the demand for varied and convenient options.

Coca-Cola introduced its “Sliim” cans in the US, which contain the same 12 ounces as standard cans but in a taller, more slender shape. This innovation is part of Coca-Cola's strategy to meet consumers' fast-changing preferences. Coca-Cola Classic, Diet Coke, and Fanta are now available in these sleek cans nationwide.

E-Commerce Explosion:

Online beverage sales are booming, reaching $9.9 billion last year, a 15.2% increase since last year. Digital platforms provide convenient solutions, including customizable subscription models and streamlined delivery options. Amazon has long led the charge, but now UberEats, DoorDash and Instacart have expanded their offerings to include a variety of non-alcoholic spirits and beverages, tapping into the growing trend of online shopping in the beverage industry.

Personalized Experiences:

AI-powered platforms are emerging to offer consumers custom blends based on taste, dietary needs, and health goals. Coffee and tea are two areas where these tools are seeing more utilization, but energy drinks and other functional beverages may also offer some opportunity for personalization, with AI-driven virtual baristas and mixologists enhancing consumer engagement and loyalty.

Innovative Breakthroughs:

Continuous innovation is essential in today's competitive beverage market. The energy drink industry alone saw 258 new product launches in 2023, each with unique functional claims and ingredients. According to NIQ data, manufacturers focusing on innovation were 1.8 times more likely to experience overall sales growth.

Coca-Cola's AI-driven Creations platform is a prime example of rapid innovation, producing imaginative flavors like "space" and "dreams." Creations beverages, on average, engage young consumers about twice as much as mainline Coke initiatives, with over 75% of these consumers new to the Coke trademark. In the past, a mainline Coke offering would take over a year to develop, whereas now, the process is done in just a few months.

Leverage AI-Driven Insights:

Utilizing AI to analyze consumer preferences and market trends can help brands create personalized products that cater to specific tastes and dietary needs, potentially enhancing consumer satisfaction and boosting loyalty.

Swiss retailer Migros launched Vivi Nova, the world’s first AI-developed beverage. Partnering with Vivi Kola, Migros used AI tools like ChatGPT, Midjourney, and 3D creation tool Unreal Engine to create this vegan drink in just two days. ChatGPT selected the health-boosting ingredients, while Midjourney and Unreal Engine designed the product. This swift, innovative process highlights AI’s potential use for trendy beverage production.

Listen To Social Feedback:

In a world where consumer preferences can shift rapidly, social listening is critical to staying relevant. Monitoring social media and consumer feedback in real-time allows brands to refine their marketing strategies and product offerings, ensuring they meet these shifts.

Sprite relaunched its iconic "Obey Your Thirst" campaign with a modern twist, guided by a Gen Z council that informs the brand’s product and marketing decisions. By combining traditional testing methods with social listening, Sprite stays in tune with consumer trends and keeps its brand fresh and engaging.

Experiment With Limited Drops:

Creating buzz through limited-time offerings and unique flavor experiments can generate excitement and urgency. This strategy encourages immediate purchases and enhances brand loyalty by offering consumers something novel and exclusive.

Numi Organic Tea introduces limited-edition seasonal blends like "Winter Spice" and "Spring Blossom." These unique tea flavors are available for a short period, encouraging tea enthusiasts to try them before they disappear.

‘Influence’ Your Marketing:

Influencer marketing can be game-changing in reaching target audiences. A 2022 Oracle survey shows that almost 40% of US consumers trust social media influencers over brands . Collaborations with influencers who resonate with the brand and genuinely enjoy the products can be particularly effective.

Skinny Mixes struck gold with the viral "WaterTok" trend led by TikTok star Tonya Spanglo. Her fun, creative videos transforming water into exciting drinks like Bubblegum and Salted Caramel Apple caused Skinny Mixes’ products to sell out multiple times. With over 400,000 views on some videos, Spanglo’s authentic switch from sugary sodas to zero-calorie waters resonated with fans, showing how powerful influencer marketing can be when done right.

Offer Social Media Exclusives:

Offering exclusive content and products on social media can create a buzz and build a sense of community. These strategies get consumers to interact with a brand, and each other, boosting overall engagement.

Nestlé San Pellegrino created a photo contest managed by Snipp, that invited consumers to share their 'Table Moment' with the sparkling water brand. Tagging and following the brand entered them in a contest that offered a grand prize of a trip for 2 to Quebec and an unforgettable exclusive fine dining experience! With fun, user-generated content, San Pellegrino significantly heightened its social engagement.

Coca-Cola launched a limited-edition soda exclusively on TikTok Shop, featuring unique packaging and "hype kits" with related items like tissues. This campaign was a hit with Gen Z, leveraging TikTok’s e-commerce platform to drive buzz and sales through novelty and exclusivity.

Renew with Retro:

Retro packaging and branding is having a moment, with over 3,000 mentions on social media in the last six months, according to RILA Global Consulting . The ’80s and ’90s are especially popular, evoking positive vibes and simpler times. This nostalgic appeal isn't just for established brands; even new startups can adopt a retro look to evoke authenticity and simplicity.

Ocean Spray worked to nail the balance between tradition and innovation with its recent brand overhaul. The updated imagery reflects a “wildly uncommon” theme, meant to appeal to both long-time fans and new customers. By integrating its rich history into the packaging, Ocean Spray is tapping into an emotional connection, strengthening brand loyalty while drawing in a fresh audience.

Ribena is bringing back its beloved Ribena Berry characters from the 1980s to rekindle consumer love. These playful characters, representing British blackcurrants, highlight the brand’s local sourcing. Backed by a £5 million investment and a partnership with Hasbro, the campaign includes an on-pack promotion where consumers can win family games, adding fun and nostalgia to their purchase.

Source Ethically:

The demand for sustainable, ethically produced ingredients is skyrocketing. Consumers now see these as essentials, not just extras. Highlighting products that focus on thoughtful sourcing can set brands apart.

Touted as a complete source of protein and more environmentally friendly than neighboring nuts, Táche sources its pistachios from fourth generation family farmers. Requiring about 75% less water to produce and using recyclable packaging, the brand aims to be ‘better for you, better for the environment’.

Package Sustainably:

Eco-friendly packaging is more than a trend; it's a statement of responsibility. Brands that integrate sustainability into their packaging can create lasting customer bonds. By making it easy and rewarding to recycle or reuse containers, brands can enhance engagement and loyalty.

Coca-Cola introduced an innovative refillable drink program in Sweden, partnering with Stockholm's PBX convenience store. The program offered consumers more than 60 refillable soda flavors, as part of the company's initiative to achieve net-zero greenhouse gas emissions by 2040.

Build Trust with Clear Labeling:

With 76% of grocery shoppers valuing transparency, brands that provide clear labeling to communicate their sustainability efforts can significantly build consumer trust and confidence.   Even further, consumers are willing to pay a hefty premium for the same: An IBM study found that 71% of consumers were willing to pay "an additional average premium of 37% for companies providing full transparency and traceability."

HowGood and SES-imagotag's partnership brings sustainability data directly to store shelves via smart digital labels that provide insights into greenhouse gas emissions, water usage, and labor practices. In a UK pilot, products with these labels saw a 25.8% sales boost, with "Fair Labor" items leading at 45.1% . More than 80% of consumers were also willing to use QR codes, websites, apps, or other tools to seek more product details, whether in-store or online.

Gain Shopper Insights:

Gaining insights into how consumers shop across different channels allows brands to tailor their promotional strategies effectively. For instance, 82% of energy drink shoppers in convenience stores (C-Stores) plan their purchases ahead of time, compared to 73% in mass channels. Brands can leverage this information to craft specific marketing strategies for each channel in the energy drink industry.

Refine Product Offerings:

E-commerce platforms enable brands to test products quickly and efficiently, identifying best-sellers and long-tail products to offer in third-party retail stores. This approach allows consumers to explore beyond the top-selling SKUs, catering to both loyal fans and curious new customers in the ready-to-drink beverage segments.

Collect First-party Data:

Successful omnichannel marketing campaigns create a cohesive and satisfying consumer experience. By seamlessly integrating digital and physical touchpoints, brands can create immersive, engaging experiences while collecting valuable data for future marketing efforts.

Coca-Cola’s Innocent Drinks launched a digital out-of-home campaign in London metro locations. Consumers who scanned QR codes on billboards could learn about the brand’s sustainability initiatives via a microsite, which also captured first-party data including names, emails, addresses, and birthdates. The campaign achieved a 65% engagement rate and a 10% repeat engagement rate, exceeding expectations by 5,000%.

Tap Into Events:

By partnering with high-profile events, beverage brands can connect with larger audiences, amplify their messaging, and create memorable experiences that foster consumer loyalty.

Peroni 0.0% leveraged its Formula 1 partnership to enhance brand visibility through in-person activations and limited-edition merchandise. Fans could take pictures with a replica of a Ferrari Formula 1 car on a yacht while sampling Peroni 0.0%. This association with the excitement and prestige of Formula 1 created an unforgettable brand experience that resonated with fans and boosted engagement.

Featuring gymnast Simone Biles, Powerade’s 'Pause is Power' Campaign highlighted the importance of mental and physical well-being during the Olympic Games. The emotional campaign emphasized supporting athletes that 'take a pause' to come back stronger, with improved health and performance.

Design Unique Experiences:

Brands can make a significant impact at events by designing unique, interactive experiences that leave lasting impressions on attendees.

Red Bull’s annual Flugtag event, where participants build homemade flying machines and launch them off a pier, embodies the brand’s adventurous spirit. This hugely popular event draws large crowds and generates extensive media coverage, reinforcing Red Bull’s image as a fun, daring, and innovative brand in the beverage industry.

Create Pop Culture Tie-Ins:

By tapping into current trends and entertainment, brands can reach broader audiences and create strong associations. Pop culture tie-ins generate buzz and excitement, making brands more relatable and engaging.

Pure Leaf’s 'Unbelievably Sweet Files' campaign featuring 'Ghostbusters' actors promoted its zero-sugar sweet tea with a humorous, myth-busting theme. This campaign not only engaged consumers with its fun, nostalgic appeal but also collected valuable first-party data. By leveraging the enduring popularity of 'Ghostbusters,' Pure Leaf crafted a memorable and engaging marketing campaign that resonated with a broad audience.

Liquid Death partnered with Netflix to offer prizes like a year of free Netflix. Aligning with a highly anticipated film, Liquid Death reached a wider audience and generated significant buzz. Snipp built a sweepstakes entry system where consumers could register for a chance to win prizes, including free Netflix for a year, a TV, and a soundbar.

Snipp’s PMN gives beverage brands access to over 67 million shoppers via top-tier bank partnerships, offering SKU-level, grocery cash-back promotions directly on consumer cards. By targeting customers at the point of sale, it has the potential to boost spending while also guaranteeing 100% marketing attribution with comprehensive data analytics.

Create Targeted Rewards:

Through regular, targeted rewards promotions, brands can make their customers feel valued for their loyalty and repeated patronage, while maintaining a constant connection with their consumer base.

Mtn Dew launched a targeted rewards promotion aimed at gamers and outdoor enthusiasts. The Outdoor Gear Program featured codes on select bottles and packs, redeemable online for prizes like National Park Service annual passes, The North Face sleeping bags, and Engel coolers. Meanwhile, the Gaming Rewards Program, in partnership with Xbox, offered prizes designed to enhance gaming setups. Certain flavors even provided double points, encouraging more frequent purchases and deeper engagement with the brand.

Offer Receipt-Based Promotions:

Receipt-based promotions, such as instant win contests, buy-get offers, and sweepstakes, add a layer of excitement to consumer purchases. By entering these contests with their purchase receipts, consumers are incentivized to buy, while brands gain valuable insights into their behavior.

Nescafe's 'Get Rich Quick' campaign leveraged receipt-based entries to boost consumer engagement. Customers who bought qualifying products could upload their receipts online for a chance to instantly win a daily $500 prepaid digital card and enter a larger sweepstakes. The program also accepted non-purchase entries via a brief essay and a skill-testing question. Additionally, a status tracker displaying total winnings introduced a competitive edge to the experience, boosting engagement further.