Healthy and functional beverages are on the rise, and no and low alcohol ready-to-drink offerings have exploded from North America to Europe and Asia-Pacific, proving to be a more convenient and ‘safe’ option in a world still plagued by COVID-19 measures and barrier gestures.
However, we see many interesting new product developments, packaging innovations, and unexpected mergers and acquisitions worldwide. With movements such as mindful drinking and “sober curious” gaining traction, research shows that alcohol consumption has decreased, with younger generations drinking less as they become more interested in holistic wellness and health. And the beverage industry has been observing these shifts in concern, consciousness, and habits. So, what are the beverage trends in 2021?
Consumer demands and trends in 2021
Customers no longer drink for the sake of drinking or to quench their thirst. They require a reason to buy a beverage. People, for example, drink coffee in the morning to increase their energy and chamomile tea in the evening to help them sleep better.
People want more from a beverage, such as added value, functionality, origin, and storytelling, so they want a coffee and something else. The thought process goes something like this: “I need vitamins, but I also need caffeine in the morning; why can’t I drink these two things together?” We witnessed this in action two years ago when Coca-Cola launched a zero-sugar version of a Coke with Javanese coffee across the United States. We see two health benefits that consumers are increasingly seeking with the pandemic: immunity and digestive health.
Beverage trends 2021 focus on healthier and cleaner products
Beverage manufacturers will work hard in the coming years to meet consumer demands for more sustainable packaging, functional and convenient beverage formats, and healthier product offerings. Manufacturers have had to make adjustments as beverage consumers have become more discerning in their purchases, from their products’ basic formulation to the more sustainable or protective packaging.
According to a new PMMI Business Intelligence report (which covers soft drinks, juice, water, sport/energy drinks, functional/nutritional drinks, coffee/tea, and water but excludes alcoholic beverages and dairy products), consumers are looking for beverage products that add functionality to their lives, improve their overall health, and are available in convenient formats.
They are also concerned about the sustainability of beverage packaging, with 89% of companies polled saying they want to incorporate more recycled plastic materials into their packaging to reduce global plastic pollution.
These trends have resulted in a significant increase in the number of SKUs in the beverage industry, as manufacturers introduce new products, formats, and packaging to meet consumer demands. The beverage industry in the US is expected to expand 5.21% by 2025, with global growth of 6% during the same period. According to Euromonitor, there will be 1.23 billion total units sold in 2020, with the majority sold in the Asia Pacific (39.5%), North America (20.7%), and Western Europe (15.9%).
Consumers are looking for beverage products that add functionality, improve overall health, and are available in convenient formats
Besides, consumers also want to connect with brands. They want to know what they’re eating, who they’re helping, and the origin stories of both the products and the ingredients. Look at the tea brands in Vietnam, and you’ll notice that many of them place a premium on the origin and source of their ingredients.
Tan Do Beverage is one of Vietnam’s leading beverage manufacturing companies, well-known for its private-label services (OEM) for customers worldwide. We are the manufacturer, supplier, and distributor of beverages. The beverage products that we focus on are fruit juice, wherein tea drink is one of those. The tea-growing area in Thai Nguyen, the largest tea-growing area in Vietnam, is our source of green tea input for our green tea beverages. Tea drinks have many favors: honey, peach, pomegranate, mango, lemon, original, chrysanthemum honey lemon, soursop, passion fruit, lychee, watermelon melon, white tea, black tea, green tea, aloe tea.
Six beverage trends 2021
1. The bubble tea
Although it was invented in the 1980s, bubble tea is poised to skyrocket in popularity. The bubble tea industry is expanding globally, and its market is expected to expand by nearly $2 billion to $4.3 billion by 2027, from the United States to Germany, China, and Brazil.
The refreshing Taiwanese tea-based drink with its fruit jelly ‘bubbles’ or tapioca appeals to health-conscious individuals who enjoy the healthier variants low in sugar, with organic soya milk, green tea, or fruity mixes, as well as a younger generation enticed by its 200 or so different flavor combinations and even more customizable options, resulting in a truly unique, tasty, and enjoyable drink.
2. Fermented drinks
Increased awareness of the importance of fueling our bodies with high-quality, nutritious food and drink is fueling rapid growth in fermented beverages, which now account for a sizable portion of the functional and healthy drinks category.
Probiotic beverages are expected to generate over $77 billion in sales by 2025, nearly doubling the revenue generated globally in 2018. While kombucha has dominated the market for many years, it is now facing stiff competition.
Fermented drinks are one of six beverage trends 2021
With its more diverse probiotic strains that have been shown to help boost the immune system and aid digestion, water kefir is gaining traction and making inroads into the mainstream. Tepache, a fermented Mexican soda, is another healthy, flavorful, and sustainable alternative to kombucha. While it is not novel, it has promising prospects in this ‘health-conscious’ era, but hey, it’s just a gut feeling!
3. Wines and champagnes
Celebrity beverage endorsements are not a recent phenomenon. Consider George Clooney and Nespresso, Jennifer Aniston and Smart Water, or a slew of athletes endorsing energy drinks. Expect to notice an increase in the number of vineyards and champagne houses partnering with big names to capitalize on their glamorous images and expand their respective brand portfolios.
Cameron Diaz is the most recent celebrity to enter the wine industry, following John Legend, Kylie Minogue, and Brad Pitt with her “clean” wines. Diaz’s range includes an organic and vegan French rosé and a Spanish white with no added sugar, with Diaz capitalizing on both the wellness trend and the growing “thirst” for “pink” wine.
Such collaborations are also useful in introducing wines and champagnes to new consumers, particularly millennial drinkers who are drawn to celebrity and wellness lifestyles and aren’t opposed to the Instagrammable aesthetic of a fizzy or rose-tinted drink. And there is a growing trend of teaching wine and knowledge courses to the younger generation because they enjoy drinking but want to understand the products and heritage better.
4. Boxed wine
During the COVID-19 pandemic, did you know that supermarket alcoholic “go-to” beverage was bag-in-a-box wine?
While wine connoisseurs may assume that boxed wine is of poor quality, industry experts believe this is changing quickly as sales continue to surge globally in 2021.
Boxed wine will explode globally
What’s the allure? Aside from the product inside the bag, boxed wine is easier to store, better preserves open wine, and is a more hygienic and sustainable option, especially for restaurants. With each three-liter box emitting roughly half the carbon dioxide emissions of a glass bottle, boxed wine is also less expensive to transport and store, as well as more environmentally friendly. Something that even the most prestigious wineries can’t ignore.
5. Canned cocktails
While some people might have enjoyed watching online mixology tutorials to make their homemade cocktails, many people miss the days when original creations were served ready to drink.
Spirit companies and hotel chains like the Marriott have jumped on the bandwagon and created various delicious, bartender-quality, ready-to-drink cocktails in cans. According to Nielsen Premium Panel data, the development of prepared cocktails-to-go sped up 171% in 2020 and showed no signs of slowing down. It is expected to be the hottest trend in the alcoholic beverage space in 2021.
Grab-and-go cocktails are here to stay thanks to high-quality ingredients, authentic flavors, options for low-calorie, sugar-and-alcohol, or premium spirits, and convenient and sanitary packaging.
These alcoholic carbonated waters, packaged in slimline cans, are relatively low in calories, have a similar strength to beer (around 4%), and are primarily aimed at young female consumers.
6. Alcohol-free beers and spirits, as well as spiked sodas
With interest in low and no alcohol by volume (ABV) drinks in recent years, more and more people are looking for a happy medium between tee-total and drinker, functional and indulgent, high-quality, and convenient.
The boom in alcohol-free beers in 2021
As a result, low and non-alcoholic beverages are flooding the market, which is an area to keep an eye on. Consumers will be spoiled for choice, with non-alcoholic beers and premium mocktails from spirit brands, as well as the boom in hard seltzers, which is now spilling over into hard coffees and kombucha. Whether it’s looking for something with less sugar and alcohol, premium products, a slight “kick” in traditional non-alcoholic beverages, or an alternative to beer, this growing category has something for every taste bud and type of drinker.
The future of Southeast Asia’s beverage industry
Asia is a fertile ground for plant-based foods and beverages. Besides, Asia is also a fertile market for functional beverages because we are a culture that has long associated beverages with health benefits and function. In Chinese culture, you drink tea with your meal to aid digestion, herbal tea to boost your immunity, or when you’re sick, whereas, in the United States or Europe, you drink tea to quench your thirst or as a palate cleanser.
In conclusion, the future of Southeast Asia’s beverage industry can be summed up in 7 key beverage trends 2021:
- Plant-based and dairy-free alternatives are making their way into mainstream beverage categories (coffee & tea): Because taste is king, we’ll see more substitutes that are like their non-dairy or plant-based counterparts.
- Functional mainstream beverages: We will see more beverages that combine multiple consumption points. See an increase in the popularity of mainstream beverages with health benefits, particularly those related to immunity and digestive health. Consider 50-calorie chocolate coffee mochas that look good, taste the same as a 500-calorie version, and promote gut health. Yes, these are today’s consumers.
Asia is a fertile market for functional beverages
- Permissible pleasure items with an emphasis on the origin and high-quality ingredients.
- Increased Customisation: People want to personalize their flavors and sugar levels. People in Singapore can now customize their favorite drinks, including sugar and ingredient levels, at Starbucks.
- On-demand technology: Consider Kopi Kenangan in Indonesia, Luckin Coffee (now bankrupt) in China, and Rocket Internet’s Flash Coffee in Thailand and Singapore – these are retail technology beverage apps that allow customization (sugar levels, ingredient levels, etc.) as well as on-demand delivery and scheduled pickups.
- Premium Robusta Coffee
- Asia-born craft spirits going global
While there is still much uncertainty, beverage trends 2021 are clear that growing consumer interest in health, wellness, and mindfulness is shaping the beverage industry as it seeks to quench this thirst for holistic balance.
Under the circumstances, the world’s largest beverage companies have already begun some new strategies to keep up with this cultural shift by innovating new products that are not only non-alcoholic but also align with health, wellness, and sustainability trends. More healthy and nutritious drinks, such as coconut water, vitamin water, or protein drinks, are gaining market share worldwide.