Author: Mintel Group Ltd.
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Beverage Blurring - US - February 2016

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
The issues
Top categories struggle to grab consumer attention
Figure 1: Non-alcoholic beverage consumption, November 2015
Beverage health, function second to taste/flavor
Figure 2: Preferred beverages attitudes and behaviors – Reasons for drinking preferred beverages, November 2015
Expanding beverage selection can overwhelm, decrease product loyalty
Figure 3: Drinking attitudes and behaviors – Attitudes toward beverage availability, November 2015
The opportunities
Free offerings, taste, price influences new beverage trial
Figure 4: Drinking attitudes and behaviors – Preferred beverages, November 2015
Figure 5: Attributes that encourage new beverage trial, November 2015
Leverage consumer loyalty to inspire trial
Figure 6: Attributes that encourage new beverage trial, November 2015
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Top non-alcoholic categories struggles, remaining sees growth
Juice, CSDs, dairy milk has highest market penetration
Preference for bulk, single-serve shifts with age
Preferences for chilled, room temperature changes with age
Supermarkets, mass merchandisers top purchase locations
MARKET BREAKDOWN
Leading categories see stagnant growth and declines
Figure 7: Percent change in sales non-alcoholic drinks, by segment, at current prices, 2014-15
Carbonated Soft Drinks: Spotlight on Natural/Craft – US, June 2015
Juice, Juice Drinks, and Smoothies – US, November 2015
Mintel’s upcoming Dairy Milk – US, March 2016
Bottled Water – US, January 2015
Coffee – US, September 2015
Nutritional and Performance Drinks – US, January 2015
Energy Drinks – US, May 2015
Tea & RTD Tea – US, July 2015
Mintel’s upcoming Non-dairy Milk – US, April 2016
MARKET PERSPECTIVE – BEVERAGE CONSUMPTION
Juice, CSDs, dairy milk have highest market penetration
Figure 8: Non-alcoholic beverage consumption, November 2015
Figure 9: Individual carbonated soft drinks and bottled water mean consumption in a seven- day period, July 2014 to September 2015
Figure 10: Household mean consumption of juice, coffee, tea, or milk on an average day, July 2014 to September 2015
Figure 11: Individual energy drink/shot and thirst quenching/sports drinks mean consumption in a 30 day period, July 2014 to September 2015
MARKET PERSPECTIVE – BULK VERSUS SINGLE-SERVE
Preference for bulk, single-serve shifts with age
Figure 12: Size and refrigeration preferences – Size, by age, November 2015
Single-serve can encourage beverage trial
Figure 13: Size and refrigeration preferences – Attitudes toward single-serve, November 2015
Figure 14: Size and refrigeration preferences – Attitudes toward single-serve, by age, November 2015
MARKET PERSPECTIVE – CHILLED VERSUS STORE SHELVES
Preferences for chilled, room temperature changes with age
Figure 15: Size and refrigeration preferences – Refrigeration preferences, by age, November 2015
Consumers expect beverages to be on store shelves
Figure 16: IFT beverage blurring – Beverage placement, June 2015
MARKET PERSPECTIVE – PURCHASE LOCATIONS
Supermarkets, mass merchandisers top purchase locations
Figure 17: Preferred beverages attitudes and behaviors – Top purchasing locations, November 2015
Figure 18: Preferred beverages attitudes and behaviors – Top purchasing locations, by age, November 2015
MARKET FACTORS
Health concerns remain top-of-mind with consumers
Figure 19: Important to achieve good health – Any top three rank, May 2015
Consumers aged 25-34, older groups on the rise
Figure 20: Growth rates of population (% change), by age, 2010-20
Declining household income challenges some beverage categories
Figure 21: Median household income, in inflation-adjusted dollars, 2004-14
Households with children decline
Figure 22: Households, by presence of own children, 2003-13
Hispanic population experiencing growth
Figure 23: Growth rates of population (% change), by race and Hispanic origin, 2010-20
Overlap between Millennials, acculturated Hispanics, and parents
Millennials as parents
Figure 24: Households with own children, by age of householder, 2013
Hispanics as parents
Figure 25: Households with own children, by Hispanic origin of householder, 2013
Hispanics as Millennials
Figure 26: Generations, by Hispanic origin, 2015
KEY PLAYERS – WHAT YOU NEED TO KNOW
Cross-category beverages see growth
Beverage category crossover creates new flavors, functions
Grassroots promotional efforts move the needle
PRODUCT IMPACT
Iconic packaging can cause confusion
Brand name can interfere with consumer perception
Packaging/looks can be deceiving
Hybrid beverages may nudge consumers to new territory
WHAT’S WORKING?
Cross-category drinks hit on trends, see success at MULO channels
Characteristics of success
Branded by heritage and ingredients
Categories with healthier association
WHAT’S STRUGGLING?
Some drinks facing stronger competition at MULO outlets
WHAT’S NEXT?
Waters increase functionality and flavor offerings
Around the US
Around the globe
Teas cross with variety of categories
Around the US
Around the globe
Coffee flavor, function tapped for multiple drink types
Around the US
Around the globe
Juice fusions move to new categories
Around the US
Around the globe
Milk meets water
THE CONSUMER – WHAT YOU NEED TO KNOW
Confusion over cross-category beverage placement
Hybrid drinks struggle with positive perceptions
Majority only sometimes purchase new drinks
Consumers open to new beverage trial
Free trial, taste most important to encourage new beverage trial
Consumers enjoy wide beverage selection
BEVERAGE CONFUSION
Confusion over cross-category beverage placement
Vital Juice Co. Almond Cold Pressed Juice
Figure 27: Beverage placement – Vital Juice Co. Almond Cold Pressed Juice, November 2015
POM Supertea
Figure 28: Beverage placement – POM Supertea, November 2015
Mtn Dew Kickstart Energizing Sparkling Juice Beverage
Figure 29: Beverage placement – Mtn Dew Kickstart Energizing Sparkling Juice Beverage, November 2015
V8 V Fusion + Energy
Figure 30: Beverage placement – V8 V Fusion + Energy, November 2015
Starbucks Refreshers Sparkling Green Coffee Energy Beverage
Figure 31: Beverage placement – Starbucks Refreshers Sparkling Green Coffee Energy Beverage, November 2015
Hi Ball Sparkling Energy Water
Figure 32: Beverage placement – Hi Ball Sparkling Energy Water, November 2015
Jones Strawberry Lime Sparkling Water
Figure 33: Beverage placement – Jones Strawberry Lime Sparkling Water, November 2015
Rockstar Roasted Caffe Latte Flavored Energy & Coffee Drink
Figure 34: Beverage placement – Rockstar Roasted Caffe Latte Flavored Energy & Coffee Drink, November 2015
Harmless Harvest 100% Raw Coconut Water with Fair Trade Coffee
Figure 35: Beverage placement – Harmless Harvest 100% Raw Coconut Water with Fair Trade Coffee, November 2015
VIEWS TOWARD HYBRID (FUSION/CROSS-CATEGORY) DRINKS
Hybrid drinks has opportunity to leverage uniqueness
Figure 36: Beverage blurring – Positive attitudes toward hybrid drinks, June 2015
Figure 37: Beverage blurring – Positive attitudes toward hybrid drinks, by age, June 2015
Figure 38: Beverage blurring – Positive attitudes toward hybrid drinks, by demographics, June 2015
Hybrid/fusions drinks are challenged by consumer perceptions
Figure 39: Beverage blurring – Negative attitudes toward hybrid drinks, June 2015
NEW BEVERAGE PURCHASING BEHAVIORS
Majority only sometimes purchase new drinks
Figure 40: Drinking attitudes and behaviors – New drink purchasing behaviors, November 2015
Frequently purchase new or different beverages
Sometimes purchased new or different beverages
Rarely purchases new or different beverages
Frequent new drink shoppers visit a variety of retail channels
Figure 41: Preferred beverages attitudes and behaviors – Top purchasing locations, by drinking attitudes and behaviors, November 2015
Hybrid beverage drinkers
Occasional hybrid drinkers
No interest in hybrid drinks
ATTITUDES TOWARD NEW AND PREFERRED BEVERAGES
Consumers open to new beverage trial
Figure 42: Drinking attitudes and behaviors – Preferred beverages, November 2015
Open to new beverage trial
Sticks to preferred beverages
Prefers variety
Reasons for drinking preferred beverages
Figure 43: Preferred beverages attitudes and behaviors – Reasons for drinking preferred beverages, November 2015
Figure 44: Preferred beverages attitudes and behaviors – Reasons for drinking preferred beverages, by age, November 2015
ENCOURAGE NEW BEVERAGE TRIAL
Free trial, taste most important to encourage new beverage trial
Figure 45: Attributes that encourage new beverage trial, November 2015
Figure 46: Attributes that encourage new beverage trial, by age, November 2015
Opportunities to reach women with new drink trial
Opportunities to reach parents with new drink trial
ATTITUDES TOWARD AVAILABLE DRINK SELECTION
Consumers enjoy wide beverage selection
Figure 47: Drinking attitudes and behaviors – Attitudes toward beverage availability, November 2015
Enjoys the selection
Indifferent
Overwhelmed
Figure 48: Drinking attitudes and behaviors – Attitudes toward beverage availability, by age, November 2015
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Consumer survey data
Consumer qualitative research
Abbreviations and terms
Abbreviations
Terms
APPENDIX – MARKET BREAKDOWN
Figure 49: Sales non-alcoholic drinks, by segment, at current prices 2010-15

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