Spend enough time with anyone in the beverage industry and they’ll all eventually tell you the same thing: the most important thing a drink can do is taste good.
That old adage may still hold true, but it doesn’t make the entrepreneur’s job any easier. At the dawn of a new decade, consumers are not only demanding great taste, as they always have, but they’re also seeking answers to a litany of suddenly critical questions. Where was this fruit sourced? Is this plant-based? What is this ingredient and how will it make me feel? And, of course, does this have CBD?
Those queries, and others, will serve as the wellspring for beverage innovation in 2020, and BevNET sought out the expertise of suppliers, brands and industry experts to help explore the trends and market forces shaping flavors and ingredients this year.
Flavors: Exotic But Accessible
Seemingly year by year, consumers have become more open to and interested in a broadening array of beverage flavors. As the world has become more connected, ethnic and regional tastes that were once exotic curiosities have been introduced and, in some cases, embraced by a new generation of cultured shoppers seeking out new drinking experiences. That desire to explore looks set to continue in 2020.
“As consumers visit international destinations, many opt to live like a local to uncover a region’s cuisine and these foreign experiences have influenced the daily life of Millennials and Gen Z in particular, encouraging them to try new flavors and ingredients,” said Alex Massumoto, marketing associate at Synergy.
Looking ahead to what’s next, many we spoke with expect this year’s flavor innovations to carry a strong Asian influence. With Tokyo set to host the 2020 Summer Olympic Games in July, Synergy noted that Japan will be “in the global spotlight in 2020,” which has inspired the company to focus on creating a Red Cherry Blossom flavor that combines “delicate floral notes with a subtle hint of red berries.” Micah Greenhill, beverage marketing manager at ADM, said he is also expecting to see expanding interest for Japanese cherry blossom — specially Sakura, the pink variety — as part of a “wider acceptance of exotic ingredients combined with flavors consumers already know and love.”
Beyond botanicals, Asian fruits and citrus flavors are also projected to grow in beverage. Dylan Thompson, marketing and consumer insights manager at Symrise Flavor Division North America, said that his company will continue to focus on “Accessible Asian” flavors, such as yuzu, calamansi, ume and misugaru. In its 2020 U.S. Taste Charts, Kerry Flavors listed yuzu as an emerging flavor for dairy-based and hot beverages. Within cold beverages and water, however, Kerry listed “New Age Citrus” — a category which includes yuzu, calamansi, satsuma, dekopon and dalandan, among others — as a “key” flavor for 2020, while also noting lychee as one of the 20 fastest growing flavors in the last three years. Vinegar was also listed as an up-and-coming flavor for water and cold drinks.
Outside of sweet fruit flavors, the influence of traditional fermented foods from Asia is also beginning to be felt in beverages. According to Christina Witter, director of corporate communications at Symrise, U.S. consumers are getting more comfortable with “funky” ingredients and flavors, as seen with the rise of kombucha, drinking vinegars and even natural wine. Fermented flavors from Korea specifically, such as gochujang (a spicy red chili paste) and kimchi, will become more prominent this year, according to the Specialty Food Association’s (SFA) 2020 Trendspotter Panel. In its State of the Specialty Food Industry research study, the SFA noted that retail sales of refrigerated ready-to-drink functional beverages have grown 55%. Vinegar was also listed as an up-and-coming flavor for water and cold drinks in Kerry’s 2020 U.S. Taste Charts.
Consumers: No/Low Alcohol
Knowing what consumers don’t want is often just as important as knowing what they do want. And in 2020, they’ll likely be asking for less alcohol.
But even though they might not want some of the effects of drinking alcohol, consumers are still seeking familiar flavors inspired by spirits and cocktails. Health conscious millennials have helped drive the proliferation of high-end mocktails made with zero-proof spirits, exotic juices, and bitters, according to beverage incubator Imbibe. The group expects beer, wine and spirits options with up to half of the alcohol by volume (ABV) of traditional products to continue growing. According to the 2020 Kerry Taste Charts, “alcohol” — a group which includes margarita, mojito, sangria, hops and other notes — is an “up and coming” flavor in water and cold beverages, meaning it is among the 20 fastest growing categories over the last three years.
“With all the fervor surrounding zero proof and alcohol-free bars, the interplay between soft and hard drinks has never been more tightly woven,” said Jonas Feliciano, manager, strategic marketing, global sugar reduction at Illinois-based Ingredion. “While some indicators point to the rise of sober culture or the rejection of alcohol in favor of THC products, the result is a consumer base that is seeking the inherent sophistication of barrel-aged bourbons in non-alcohol concepts such as flavored energy drinks or whiskey-infused coffee.”
According to Susan Zaripheh, group director, transformational innovation at Coca-Cola North America, alcohol-free products that feature “adult beverage profiles” with complex flavors and sour/bitter notes will continue to gain steam in 2020. Coca-Cola has dipped its feet into the category with Bar None, a line of non-alcoholic mocktails that the company has been piloting in the Atlanta area since last year. “The emergence of consumers who want an adult beverage experience without the alcohol will accelerate, and we’ll likely see an increase in the introduction of zero-proof adult beverages,” she said.
Aiming to tie the trend of non-alcoholic drinks with consumer interest in “vintage” flavors, Synergy is making the 1920’s-era cocktail French 75 (gin, champagne, lemon juice, sugar) one of its featured flavors of 2020. That decision underscores the idea that consumers believe that elevated drinking experiences and non-alcoholic products are not mutually exclusive.
“Look for a continuation in 2020 with the trend expanding with more cocktails in cans and bottled mocktails that offer sophisticated alternatives for non-drinkers or curious consumers,” said Andrew Freeman, founder of San Francisco-based restaurant and hospitality consultancy group af&co and a member of the SFA Trendspotter Panel.
Ingredients: Mastering CBD
Though still relatively new to the market, CBD (or hemp extract) beverages have quickly matured into a viable new category. Yet despite the steady increase in consumer demand, brands are still exploring and experimenting with CBD formulations to create products that can deliver the expected functional benefits without sacrificing taste, a process that will continue into 2020.
In terms of the ingredient itself, product formulation is expected to improve as ingredient suppliers become more familiar with CBD’s chemical structure and behavior in liquid.
“We’re going to continue to see other innovations and developments in the industry as we learn more about how CBD products on the market hold up over time,” said Tom Gibson, director and flavor architect at Flavorman. “Specifically, we’ll see innovation surrounding how to integrate hydrophobic compounds (like CBD) into finished beverages.”
With the range of CBD beverages continuing to grow across categories, suppliers are focused on delivering water-soluble CBD sources that are versatile and flavorless. If offered in an efficacious and easy-to-use format, CBD has vast potential, regulations notwithstanding, as a value-added functional ingredient in a wide range of both ready-to-drink and instant beverages.
“CBD will continue to thrive as an ingredient in beverages of all types,” said Gibson. “Maybe you have a flavored water or a natural soda; adding CBD allows you to take that beverage — or any beverage — and essentially make it more functional, which has implications for line extensions as well as brand new products. Its potential in the beverage space parallels that of caffeine.”
Ingredients: Fine-Tuning Functionality
After a decade of steady growth, functional beverages have found their place at U.S. retail. According to market research group SPINS, functional beverage categories — including kombucha, energy, enhanced water and other drink types — are up 5.9% cross-channel through April 2019. That growth is expected to continue, even as consumers begin demanding different — and more specific — types of functional benefits.
Part of that evolution can be already seen in the rise of CBD, which has been hailed by some for its anti-stress and relaxation effects. CBD’s popularity is indicative of consumer interest in holistic natural wellness products aimed at improving mood, sleep, cognition and other specific health areas. According to Micah Greenhill, beverage marketing manager at ADM, ingredients and flavors that “support mental clarity and focus” will rise in demand in the coming year. Even a legacy strategic brand like Coca-Cola’s Powerade is open to embracing new functional offerings; the company’s new Powerade Ultra contains on-trend fitness ingredients like creatine and brain chain amino acids (BCAAs).
The shift in tack from brands reflects how consumers are now looking for food and beverages that will “help them fulfill their holistic health needs,” according to Christina Witter of Symrise.
“That means products and consumption occasions have the opportunity to add functional ingredients targeted at specific wellness properties like brain health, gut health, calming properties and soft energy, just to name a few,” she said.
Gut health and digestion also continue to drive interest, with consumers “increasingly viewing digestive health as an important factor in overall wellbeing,” Greenhill added.
“We’re anticipating a large focus on digestive and metabolic health as many consumers link healthy digestion to playing a key role in both short-term and long-term health and well-being,” he said.
That health halo can also extend into flavoring. The desire for alternative natural sweeteners in reduced sugar products has helped drive interest in subtle, sweet flavors, like honey and florals.
“The health and wellness concept has evolved into an overall conscious state of awareness, embracing health of the body, mind and the environment,” said Massumoto. “This state of being is influencing consumers to look for beverage solutions that will complement their evolved state, creating an incredible room for innovation to support these claims.”