Choices in the beverage category have changed dramatically from Coke or Pepsi. Words like “natural energy,” “cold-pressed,” and “probiotic” are cropping up in every day drink conversation. It shouldn’t be surprising, then, that traditional beverages are losing ground to niche concepts. High sugar beverages, such as soda, are on the decline as better for you beverages move in to the category. These BFY beverages are heavy hitters with claims such as satiety, energy, and nutrition. This shift signals a change in shopper desire. Consumers want more than just refreshment; they want additional benefits. The challenge is for a beverage to give its functional claim mainstream/broad appeal in a competitive category.

One example of a beverage giant testing out the waters of BFY beverage claims is Gatorade’s announcement of an organic line. Organic purchasing behavior has been steadily increasing and Gatorade hopes their new line will be a way to reach those shoppers. Consumers increasingly demand organic products, but at the same time, lack clarity and understanding as to what organic means or what constitutes an organic product. A popular way of thinking is simply that organic means healthy. By launching this new line, Gatorade hopes to capitalize on this belief that their organic line will be a “healthier” version of their popular sports drink. With 71% of consumers wanting to avoid artificial flavors and colors, Gatorade (and its parent company PepsiCo), along with other traditional, artificial-friendly companies like Coca-Cola, will need to reformulate their products to buy in to this perception of being “healthier,” while still delivering on their iconic taste.

Keep in mind, however, that Gatorade’s entrance into a more health-focused sector is not a novel idea. Since its founding in 2012, ASPIRE Beverage Company has offered athletes a low-calorie and low-sugar sport drink alternative with no artificial colors, flavors or preservatives. Finding success largely through grassroots efforts, Aspire has utilized a marketing approach that involves the very athletes they wish to target. After turning down a national distribution offer from Target—at the risk of getting too big, too fast—Aspire opted to involve those using their products and have enlisted student athletes as brand ambassadors that raise product awareness across the United States. They plan to grow their brand organically and educate their consumers at the same time, rather than capitalize on a trend merely for a profit. Obviously, Aspire has the same goal as Gatorade—to sell more sport drinks—but ultimately, co-founder John Montague hopes to “solve the problem” of people “drinking junk in the name of sports.”

All these factors combine to create a very fascinating category, which has been experiencing explosive varietal growth in the last few years. As old school beverages decline, it will be curious to see how current trends (e.g. probiotics, natural energy sources) fit in corporate innovation; when niche market products experience such an increase in sales, how many eggs does one put in that basket moving forward? Are people buying that drink because they understand what a probiotic is and what, explicitly, that is going to do for their body? Is that shopper particular that her beverage exceeds 10 grams of protein exactly? Many micro trends move mainstream, but understanding the functional need or perceived benefit behind them may be more beneficial to big brands, rather than just copy-catting the niche products.

-Jessica Fisher, Project Director

Edited By: Sarah Morrison

About the Author REAL Insight

With over 25 years of experience, REAL Insight has led projects across a variety of industries that successfully identified consumer behavior and expectations in context, helping our clients make better decisions.

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