Your daily cup of coffee just got a lot more interesting. In fact, the U.S. beverage market overall is benefitting from the added intrigue of new innovations and formulations in recent years. Such efforts by marketers and manufacturers have given the otherwise mature beverage industry the buoyancy necessary to stay afloat and thrive, according to U.S. Beverage Market Outlook 2019, a brand new report by market research firm Packaged Facts.
Among the most important recent innovations identified by Packaged Facts in the report involves mashups—the crossover fusion of two or more beverage products that traditionally wouldn’t be expected to go together.
Here are three key mashup trends Packaged Facts sees spurring future growth in the beverage industry:
Trend 1: Coffee jolts soda, energy drinks, juice, and bottled water
More frequently, coffee is being integrated into sparkling beverages, energy drinks, and juices. This is a trend that should see continued expansion as consumers seek the indulgence and flavor of coffee while also thirsting for the effervescence of a carbonated beverage, the additional boost of energy ingredients, and/or more taste options.
“The carbonated soft drink or soda category is challenged, but many consumers moving away from soda still want flavored drinks that have bubbles. They also want healthier, more natural versions with less or no sugar. One of these soda alternatives is ready-to-drink coffee, which has seen a spate of sparkling versions on store shelves,” says David Sprinkle, research director for Packaged Facts. “Even more interesting is when we see coffee and sodas converge into an amalgamation that satisfies multiple tastes with a single beverage.”
One example, Matchless Coffee Soda, is made from locally roasted coffee which is brewed hot and flash-chilled. The drink is sweetened with Demerara sugar and carbonated. Similarly, Brooklyn-based startup Keepers produces sparkling coffee in two versions—Citrus and Black. The company roasts organic beans using a Japanese flash cold-brewing method, and blends the coffee with fresh-pressed Florida tangerine juice to make the Citrus version. Also in the conversation is Upruit, which offers a blend of cold-pressed fruit juice and cold brew coffee with light carbonation.
And because C-stores and coffee are nearly inseparable, convenience store chain 7-Eleven adds a twist to coffee soda with a packaging innovation for its private label Fizzics Sparkling Cold Brew Coffee. The product is packaged in self-chilling cans that cool the coffee when the user turns the can upside down and twists the base until a hissing sound is heard. The product is cold in 75 to 90 seconds. The cans are also recyclable, which is advantageous with more consumers increasingly worrying about beverage packaging and waste.
Beyond soda and juice, coffee is also being paired with bottled water. Happy Tree combines cold brew coffee with its maple water, which is marketed with a focus on its naturally-occurring nutrients not found in traditional water and on the fact that the beverage is sweet yet low in calories.
Trend 2: Tea brews up healthier flavor fusions that appeal to Millennials
On a similar development trajectory to coffee, tea is increasingly being incorporated into sparkling beverages, energy drinks, and juices. The results impart tea’s health benefits into beverages whose energy ingredients, carbonation, and flavors often have a wider appeal to younger adults.
As a soda alternative, new products to market include sparkling versions of ready-to-drink (RTD) tea. An interesting sparkling iced tea brand is Sound Sparkling Tea, available in Chamomile, Green Tea, Rose Tea, Yerba Mate, and White Tea versions.
Tea merges into the energy drink space not only with stimulants like guayusa, green tea, and matcha, but also yerba mate, which is starting to catch on with young Millennial consumers who are more adventurous with their food and beverages. The Guayaki organic iced tea brand features yerba mate more prominently than its own name on its bottle’s label.
Similarly, DanoneWave’s STōK brand added a new range of cold brewed teas, STōK Yerba Mate Cold Brew Teas, to complement its cold brewed coffees. The teas contain 75% more caffeine than typical RTD iced teas.
Trend 3: Energy and sports drinks created with more “natural” caffeine sources
There is an increasing blurring of the lines between sports and energy drinks, and indeed for many beverage categories. An excellent example of that are hybrid ready-to-drink energy teas and coffees. Coffee and tea are naturally energizing. And indeed, most Americans would consider these beverages their original energy drink. After all, they share the most ubiquitous energy ingredient—caffeine—with today’s most popular energy drinks. Even everyday cola and its caffeine are used by many consumers as energy drinks. More recently, entrepreneurs have launched coffee and tea-based beverages that more clearly play upon their energy functionality.
Energy drink Runa, backed by celebrities Channing Tatum, Leonardo DiCaprio, and others, gets what it calls its “clean energy” from the Amazon rainforest guayusa leaf, of which the company has built its own vertical supply chain.
Meanwhile, energy shot segment leader 5-hour ENERGY turned the tides with 5-hour TEA Shots, launched in 2018. The product, designed to appeal to more health-conscious users, gets its caffeine from green tea leaves. The drinks contain the same ingredients as regular 5-hour ENERGY except for caffeine.
Phocus sparkling waters border on being energy drinks with 75 mg of natural caffeine from green tea in each can. The waters also contain L-theanine, an amino acid said by the company to provide a “smoother energy lift.” Phocus promotes “clean energy,” which is trending, and sets itself apart from traditional energy drinks by claiming the boost of caffeine, “without the crash.”