Beverage Industry Overview: Revenues by Category
In the beverage industry, energy drinks led in generating revenues, followed by coffee, tea, sports drinks, and juices. Energy drinks saw a significant increase in sales, while coffee and tea also experienced growth. Sports drinks showed promising growth forecasts, while juice categories faced challenges due to high-sugar content. The industry is evolving to meet changing consumer preferences and health trends.
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Energy Drinks Generated the Most Revenues According to Beverage Industry s 2017 State of the Industry report, the energy-drink category generated the most revenues among all miscellaneous beverages categories, or $12.15 billion (52 weeks ending May 14, 2017). Energy drinks accounted for $11.06 billion of the total, a 4.0% increase from 2016, while energy shots total dollar sales were $1.09 billion, a 6.4% decrease. Beverage Marketing Corporation estimates the energy-drink category will reach $18.5 billion in total sales by 2020; however, the energy-shot sub-sector is expected to continue to decline, or an additional 1.8% by 2020.
Americans Love Their Cup of Joe Coffee was the second-largest category, at a total of $8.18 billion, with ground coffee the largest sub- sector, at $4.02 billion, but that was a 2.2% decrease from 2016. Although a small segment of the coffee category, cold-brew coffees had the largest YOY change, or +22.3%, and total dollar sales of $245.93 million. Single-cup coffees accounted for $3.91 billion of the category and sales increased 2.3% from 2016. The coffee category forecast is an annualize rate increase of 0.4% through 2022, reaching a total of $13.6 billion. Research reveals coffee drinkers are becoming more sophisticated in their choices, which is why traditional coffee brands have stagnated.
Tea Is Healthy to Drinkand Sell Beverage Industry reported the teas category of miscellaneous beverages totaled $6.02 billion in dollar sales, with canned and bottled teas responsible for $3.62 billion of the total, which was a 3.4% increase (52 weeks ending May 14, 2017). Refrigerated teas had the largest sub-sector increase, or +7.1%, with total dollar sales of $1.23 billion, while loose-leaf and bagged teas experienced a modest gain of +1.4%, on total dollar sales of $1.17 billion. The healthy attributes of tea are the primary drivers of the category s interest among consumers. Approximately one-third of consumers are attracted to teas longevity or therapeutic benefits.
Active Lifestyles Rely on Sports Drinks The sports-drinks category generated total dollar sales of $6.62 billion, with the non-aseptic sub- sector responsible for virtually all of the total, at $6.53 billion, or a 4.7% increase (52 weeks ending May 14, 2017). The sports-drinks mixes sub-sector accounted for just $88.67 million of the category s dollar-sales total, which was a -1.8 decrease from 2016. The Beverage Marketing Corporation has forecasted a 4.4% compound annual growth rate (CAGR) for this category of miscellaneous beverages through 2020, reaching total dollar sales of $8.5 billion.
High-Sugar Content Has Brought Many Juices Low Three of the four juices sub-sectors generated total dollar sales of $1.88 billion; however, dollar sales for juice concentrates were not provided in the Beverage Industry report, but they did increase 4.5% for this sub-sector (52 weeks ending May 14, 2017). Total dollar sales for the top brands in the shelf- stable bottled tomato/vegetable juice/cocktail sub- sector declined 1.5%, to $455.6 million, and refrigerated juice and juice drink smoothies also declined, or 3.4%, to $883.1 million. Industry analysts attribute the stagnant or declining condition of the juice category to consumers concern for high-sugar content; however, raw, or unpasteurized juices; cold- pressed, or HPP juices; and fringe juices, such as coconut water, are proving popular.
Dairy Alternatives Offer the Options Consumers Want The three dairy-alternative sub-sectors in the Beverage Industry report refrigerated almond milks, refrigerated soy milks and kefirs generated total dollar sales of approximately $1.38 billion (52 weeks ending May 14, 2017). Almond milks accounted for $1.02 billion of the total dollar sales, with soy milks contributing $237.1 million and kefirs $118.5 million. Industry analysts forecast a decline in the total dairy products market in which milk accounts for approximately 68% of the entire market; however, dairy alternatives are projected to have a compounded annual growth rate (CAGR) of 2.8% through 2020.
Advertising Strategies Suggest grocers and other channels where miscellaneous beverages are sold to promote a Mix-and-Match package to introduce and generate consumers interest in these beverages. The package could consist of 6 choices at a discounted price. Retailers may find it beneficial to offer youth and adult athletic teams free samples of sports drinks for an entire team during a game with coupons for a future purchase. Because coffee drinkers are becoming more sophisticated in their choices, consider a weekend special that includes a display of more exotic blends and whole-bean brands, free samples and coupons for a future purchase.
New Media Strategies Retailers and independent coffee shops may want to share recent news stories about the growing body of research about the health benefits of coffee and tea in a Website blog and on social media pages. Use social media to conduct a poll/survey to ask consumers who regularly exercise and/or are weekend warriors to tell their stories about the use of various miscellaneous beverages to help them hydrate. Use the table at the top of page 4 of the Profiler as a guide for social media posts, highlighting information about these consumer preferences, the brands you carry and a digital coupon for customers favorites.
