9 More Insights From the 2017 Beverage Forum
By Steve Holtz on May 16, 2017CHICAGO -- More insights from the 2017 Beverage Forum hosted by Beverage Marketing Corp., New York, and Beverage Industry magazine, Troy, Mich. …
1. Sparkling opportunity
With nearly 36% volume growth in 2016, sparkling water was the clear star of the beverage universe last year. And with only 4.5% share of the overall bottled-water market, there’s clearly plenty of room for more growth. “The growth rate is astronomical,” said Gary Hemphill, managiong director and COO, BMC Research, Beverage Marketing Corp. “That’s a matter of carbonated-soft-drink consumers still wanting carbonation.”
2. Made to order
Will the plethora of new bottled cold-brew coffees and the launch of Dunkin' Donuts iced coffee through Coca-Cola Co. make 2017 the year ready-to-drink coffee breaks out of the niche category? Maybe. “We’re likely to see continued healthy growth,” Hemphill said. “One thing that’s held that back is you can walk into a Starbucks or Dunkin' Donuts [and many convenience stores] and get your coffee prepared just the way you like it.”
3. Better beers
“Beer has lost share for 20 consecutive years to wine and spirits,” said Brian Sudano, managing partner of BMC Associates, Beverage Marketing Corp. And that share is coming out of the budget end. “All the top players [in beer] have moved up market, [and] the consumer is leaving the mainstream.” As a result, 58% of the beer market is now in upscale offerings, such as craft beer, imported beer and alternative alcohol beverages.
4. Too much of a good thing?
“Retailers like craft beer. It brings in consumers. It increases basket ring,” said Boston Beer Co. brewer and founder Jim Koch. But there’s a downside, too. “In the last few years, retailers expanded space [for craft]. Now they’re at the point where they’re saying, ‘No mas!’ There’s too much choice, and customers are less satisfied.”
5. Bai buy
One of Dr Pepper Snapple Group’s (DPSG’s) biggest coups in recent months was its acquisition of Bai Brands and its line of antioxidant-infused beverages in November. So how does DPSG ensure the previously independent beverage maker keeps its edge? “We’re keeping Bai operating as a small company,” said James Trebilcock, executive vice president and chief commercial officer of DPSG. “We’re going to let them run their business but help them with data. My direction is to stay out of their business.”
6. Get in the game
Time was, sponsoring a sporting event simply meant slapping a beverage logo on the banner or poster for an event. Not anymore, said Azania Andrews, vice president of marketing for Michelob Ultra, Anheuser-Busch InBev. “Now it’s ‘How can we be an authentic part of that activity (or event)?'”
7. Pot calling the kettle
Some industry watchers fear that the trend of states legalizing recreational marijuana could be challenging for beer sales. Pete Coors, vice chairman of the board, chief customer relations officer of Molson Coors, said he hasn’t seen reason to worry in Colorado just yet. “We aren’t seeing an impact on beer as much as we would have expected,” he said.
8. Retailer beware
What was the No. 1 beverage brand in 1950? Coca-Cola. What is it today? Coca-Cola. Similarly, Tide has ruled the laundry-detergent category for decades. Clint McClain, senior vice president and general manager of brand-watching firm GigPig, says extreme change doesn’t happen much in the top levels of major product categories. What does change is where consumers make their purchases.
9. Most-improved
The four fastest-growing up-and-coming packaged beverage types in 2016, according to Beverage Marketing Corp. data:
- Cold-brew coffee (+88%)
- Kombucha (+41%)
- Plant waters (maple, coconut, etc.) (+17%)
- High-pressure processing/cleanse juices (+17%)