Global Vision | Beverage 2020




Consumers are looking for shoehorn ‘wellness’ into aspects of their busy lifestyles. We have people trying reach the wellness with CBD mocktails, ‘energy boosting’ smoothie or nootropics beverages. This wellness trend is being met with more flexible formats in food service such as yoga brunches or lunchtime classes in communal eating spaces.


The consumers are bombarded with headlines about the current climate crisis. This is leading to a feeling of powerlessness coined ‘eco-anxiety’. However, we live in an age where individuals have more power than ever before. As individuals take on more of the responsibility, consumer choices are changing.


Many of the trends for 2020 focus on your health and well-being, but there’s also increasing concern for the world. Now, brands that are following regenerative agriculture practices will be more specific in labeling.





Sustainability

Beverage companies can no longer look at sustainability as a goal they want to achieve in the next five to ten years, especially as regulations around single-use plastic increase. Packaging like aluminumcans, glass bottles, and cardboard cartons were replaced by polyethylene terephthalate (PET), and now we’re seeing a resurgence of these products, along with new concepts.


Many companies are taking great strides to introduce products that make use of ingredients that would go to waste including banana peel, table grapes and unsold baked goods.



Premium Beverages

“Less is more” has become a mantra for consumers as they trade up to premium brands and abandon more traditional categories. This has led to the growth of niche categories including craft beer, origin coffee and premium cocktails.





Functionality

While consumers are willing to pay more, as reflected by the growth of premium beverages, they’re also expecting more functional benefits from their drinks. The jolt of energy from a low cost soda is no longer enough; consumers want clean ingredients, mental clarity, more energy, improved athletic performance, better mood, and lower stress.



New Routes to Market

Routes to market are evolving, in part due to new entrants that are providing more convenient options for purchasing compared to more traditional brick and mortar stores. Consumers are demanding beverages when, where, and how they want them.



Portfolio Management

Throughout 2020, we can expect to see plant-based drinks, hard seltzers, and FMBs to lead the surge in new product launches.

Beverage companies are no longer focused on a single category like soda or beer. They’re acquiring new or existing brands to fill gaps and divesting the products that are less relevant. In this rapidly evolving market, it’s important to assess portfolio gaps as well as the opportunity to reposition mature or orphan brands in the marketplace.


Source: KPMG - 2020 Beverage Outlook

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