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CHICAGO — Despite the packaged beverage category's shift toward better-for-you alternatives, taste and flavor are the main influences cited by consumers when choosing their preferred beverages, at 72 percent. Health/nutritional attributes and functional attributes are far less influential at 21 percent and 16 percent, respectively, according to new research from Mintel.
Accordingly, cross-category beverages are becoming increasingly available as brands attempt to cater to consumers' better-for-you demands while delivering innovative new flavor options, Mintel said. Cross-category beverages, or hybrid drinks, are products that combine two or more drink categories, blending flavors and functionality to create a new beverage that could fall under multiple categories.
Sales of the top three categories of non-alcoholic beverages stagnated or declined from 2014-2015, with carbonated soft drinks (CSDs) and juice each seeing 0.1-percent growth, and dairy milk seeing the biggest decline at 7 percent.
The majority of consumers still drink juice (66 percent), CSDs (64 percent) and dairy milk (64 percent), but Mintel research indicates that consumers are looking for alternative drink options as well. Sixty-seven percent of Americans say they sometimes or frequently buy new/different beverages and 18 percent say they drink a wide variety of beverages.
"While the non-alcoholic beverage market is innovating to address consumer interest in healthy options, taste and flavor remain the most influential reasons for consumption. No matter how healthy a drink is, if it doesn't taste good, consumers won't buy it, and the amount of available products on the market makes it easy for consumers to simply move to another option," stated Elizabeth Sisel, beverage analyst at Mintel.
"Sales trends suggest the better-for-you movement is reshaping the non-alcoholic beverage industry, but brands should consider a stronger focus on communicating flavor, in addition to health-centric or function attributes, of cross-category products," she continued.
Even as cross-category beverages present an opportunity for brands to meet trending consumer preferences, they also present new challenges. The Mintel Trend Guiding Choice shows that the sheer number of options can overwhelm consumers, as 21 percent say there are too many beverage choices.
Additionally, the majority of consumers do not strongly favor hybrid beverages, as just 14 percent agree that hybrid drinks are more interesting than non-hybrid drinks and fewer than one in 10 think they are better tasting (8 percent) or healthier (7 percent) than non-hybrids. Twenty-four percent of Americans agree that hybrid drinks have too many calories, and 20 percent say they taste artificial.
"The emergence of cross-category beverages has led to the development of new drink fusions, and the array of beverage options can be overwhelming for some consumers. This presents big challenges for brands looking to retain their customer base without polarizing those who are inundated by the growing selection of beverage options," Sisel said. "Adding to overall category confusion, some consumers struggle to identify certain drink fusions. It is essential that brands use clear messaging to illustrate what sets products apart."
Despite the challenges facing cross-category drinks, Mintel research shows consumers are willing to try new/different beverages. Nearly half of consumers polled (48 percent) enjoy the wide selection of beverages available in-store, and 40 percent would be encouraged to purchase a new beverage offering if there was a sample they could try in-store first.
Sisel concluded that there are many opportunities for beverage brands to engage with consumers and encourage trial of cross-category products.
"Our research suggests that brands should offer consumers the opportunity to taste-test new products before committing to a purchase, such as free product trial or in-store sampling," she said. "This could help cut down on consumers' product confusion and the sense of being overwhelmed by too many options."