NEW YORK -- Innovation accounted for more than 10% of the total sales in the nonalcohol packaged-beverage category in 2018, according to a year-end report from New York data firm Nielsen.
Across all Nielsen tracked retail channels, including convenience stores, $5.8 billion in sales from the $56 billion beverage category came from new products, including new product launches, brand extensions and new flavor offerings.
While innovation was widespread across the nonalcohol category, a lot of buzz surrounded the invigoration of beverage staple categories such as bottled water, milk and tea. For example, dollar sales in the $2.1 billion sparkling-water category increased 17% from last year, mostly due to new players and new flavor offerings, Nielsen said. A growing menu of milk alternatives ($1.7 billion) entered the category, with consumers opting for things like almond milk (up 12% in dollar sales growth vs. last year) and oat milk (up 69% vs. last year). Meanwhile, new offerings of kombucha drove the tea market to a $433 million category.
In consumers' ongoing quest for improved health, water remained a top choice in 2018. A Nielsen study showed 77% of surveyed Americans are trying to drink more water as the primary way they actively manage their health and lifestyle. They’re also following through at the checkout counter, as their health-focused mindset contributed to a 6% increase in water sales over the past year, pushing total sales to more than $16.1 billion. This hits well above the 2.4% growth that the overall beverage category experienced during the year and was led by strong demand for both sparkling and value-added waters.
Bubbles were the top innovation characteristic in 2018, as 71% of new items to the category were sparkling waters, followed by water items with “calorie-free” claims (58%). Both cases align with what eventually manifested in the category’s overall performance: fizzy and calorie-conscious enhanced waters driving category sales.
Top Innovation Characteristics in Water
| Characteristic | % Share of innovation Items |
|---|---|
| Carbonation/sparkling | 71% |
| Low- or no-calorie claim | 58% |
| Packaged in cans | 31% |
Source: Nielsen
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