The food & beverages industry is transforming, with consumers’ tastes and preferences undergoing a paradigm shift. Well-being and physical fitness is the need of the hour, with young adults doing a self-assessment about their dietary preferences, opting for healthier options. Refined, sugar-loaded and packaged fruit juices are bothering consumers a lot. On the other side, the supposedly nutritious, cold pressed juices are simply low-fiber or almost no-fiber. Most bottled milk-based beverages also face a considerable backlash due to high content of artificial preservatives and flavoring agents.
With a sea of information available about how beverage companies are incorporating health & wellness in their offerings, consumers are becoming more purposeful and proactive with their choices of consumables. The trend of mindful drinking has come to light recently, propelling industry leaders to bring in some solid innovations in the market.
Following the promising success of health drinks or energy drinks, pioneered by Red Bull, fusion beverages subtly entered as a newbie in beverage business. Coca-Cola Co.’s coffee-infused cola (2019) was quite a hit and took the beverage world by storm. The idea of fusion beverages initiated a trend wave. Today, most beverage companies are riding this wave, constantly innovating their product pipelines while simultaneously aligning with consumers’ taste preferences. Although commercially in its infancy, fusion beverages are already proving adept at achieving this objective. The fusion space is highly dynamic and generous enough to let brands innovate to get the best to retail shelves.
Floral infused drinks are trending in a big way. These caffeine free herbal beverages are creating a stir among millennials. Consumers are becoming more adventurous and promiscuous, transcending the boundaries between drink categories to gain multi-sensory experiences. The trend of sober drinking is gaining traction. Tea drinkers are developing highly sophisticated palates. Essential oil infused teas are soaring on popularity.
Transformation in the food and beverages industry is influenced by changing dietary preferences of new-age consumers. For them, wellness has become top-priority, which is helping them make pragmatic choices about food and beverages they include in their diet. Consumers are no longer satiated by conventional beverages, wherein “taste” qualified as the single-most compelling factor. Instead they are circumventing retail aisles displaying conventional beverages to look for healthier variants that strike a perfect mix of taste and nutrition.
As niche categories continue to outperform traditional mass-market categories, manufacturers can position their fusion beverages as unique formulation, second to none. In addition to this, they can publish marketing documents stating the benefits of their products. These documents can provide information on value, premium quality beverages, and personalized products, among others. This stroke can help manufacturers woo their target audience segment aged between 18 and 34 years. It is prudent to state that focusing on customized beverages could earn manufacturers extra points.
The prevailing environment is conducive to mass production and economies of scale, enabling companies maintain low operational cost. However, incapacity to offer personalization and customization may not work in favour of a few companies. . Personalization and customization of products encourage consumers for their consumption due to targeted benefits.
Asia Pacific exhibits lucrative growth opportunities for the market. The rising demand from India, China and ASEAN countries will aid sales of fusion beverages in the region. In addition to this, increasing disposable income will give impetus to the market.
To uphold its commitment towards achieving sustainable development, the Coca-Cola company intends to allocate a significant proportion of its investments, amounting to €1 Bn, spread over a period of 5 years in conjunction with the Coca-Cola European Partners (CCEP). The primary focus would be on developing sustainable packaging practices, such as the introduction of recyclable plastic bottles, for which the CCEP has allocated €500 Mn.
The CCEP will invest in its Socx factory to introduce state-of-the-art aseptic bottling in mid-2020, which will also enable it to meet consumer demand for Fuze Tea and Tropico drinks. The plan is expected to be discussed between French President Emmanuel Macron and James Quincey, CEO of Coca-Cola in September 2020.
PepsiCo and Tata Global Beverages are striving to review their Indian joint venture NourishCo established a decade earlier in order to accommodate their individual business expansion plans and tweaks in their strategies. This comes in the wake of Tata’s resolute stance on broad-basing its presence to emerge as a larger player in the beverages sector. The company plans to expand its business in the tea, coffee and water segments which includes products like Gluco Plus, Water Plus and Himalayan Natural Mineral Water.
The arrival of two new Powerade beverages: Powerade Ultra and Powerade Power Water, hopes to diversify the already large market share held by Coca-Cola. The beverage giant commented that these are the first ready-to-drink (RTD) sports beverages which include shelf-stabilized Creatine that enhances recovery time during intense workouts. Moreover, they also contain Vitamins B3, B6 & B12.
Coca Cola launched these two products in mid-January 2020 and are perceived as potential competitors to Gatorade and Muscle Milk introduced by PepsiCo. Both variants come in three distinct flavors, with Powerade Ultra in Mixed White, Cherry and Citrus Blast and Power Water in Berry Cherry, Tropical Mango and Cucumber Lime.
South Africa’s Competition Commission has granted conditional approval to PepsiCo’s US$ 1.7 Bn acquisition of the Pioneer Food Group, concluding it is unlikely to reduce relevant competition. The deal was negotiated in July 2019 and through this, PepsiCo expects to expand further into sub-Saharan Africa by increasing its manufacturing facilities and collaborative efforts. The Commission expressed its consent, citing the reason that the benefits to be accrued from this deal were significant as it would create more jobs for the local population and an expansion of local investment opportunities.
Danone Waters has begun marketing Ferrarelle sparkling mineral water from January 2020 in 25.4 and 11.6 ounce-glass bottles. The long-term distribution agreement will focus on building the brand in the US which includes Ferrarelle glass formats via on-premise channels, reports Beverage Industry. According to Henri de l’Epine, CEO of Danone Waters of America, “Ferrarelle is a global brand with a great potential in the U.S. market that complements our current portiolio of brands, including Evian natural spring water and Volvic natural spring water”. He further stated, “With its unique and delicate balance of bubbles, Ferrarelle is a premium offering that pairs perfectly with Evian’s unique taste”.
Coca-Cola-owned Sprite is coming out with a new ginger flavor while maintaining its traditional lemony-lime taste. The company has been busy with innovations since the beginning of 2020 and has also announced the launch of Cherry Vanilla Coke. The traditionally lemon-based drink has already been hiting shelves in regular and sugar free varieties.
“With every sip, you’ll get a crisp, refreshing cut-through of lemon-lime up front, balanced with a hit of ginger on the back-end,” said Sprite’s brand manager, Mark Shorey. He further added, “The Sprite Ginger launch is all about reinvention… reimagining the signature atiributes Sprite fans know and love, with something new and unexpected”.
PepsiCo’s Pepsi Café which combines the taste of deep-flavored coffee with that of Pepsi Cola, looks to tap into consumers’ demand for instant energy. The beverage is slated to hit U.S. markets by April 2020 and shall be available for a limited duration in two flavors - vanilla and original with the coffee flavor from the Arabica bean. The caffeine content is almost twice the amount contained in a regular Pepsi can, ranging between 37.6 mg and 95 mg.
Moreover, this is the third attempt by the beverage giant to introduce a coffee-based cola drink into the fusion beverage market. In 1996, PepsiCo had introduced Pepsi Kona in 1996 and Pepsiccino in 2000 but failed to gain much popularity. Todd Kaplan, PepsiCo’s marketing VP, however, remains optimistic about the recent venture, citing the ever-evolving consumer demand as the main reason. It targets cola fans, iced coffee drinkers and anyone in need of an extra caffeine boost.
CELSIUS has successfully incorporated the Jackfruit flavor within its ambit of energy drinks. The latest flavor shall be available in the new CELSIUS HEAT packaging in a 16 ounce can and has a tropical taste with a tangy twist along with a burst of sweetness. According to Celsius Holding Inc. CEO John Fieldy, “Jackfruit is another great tasting option that further expands our line of flavors and we expect it to entice fans and new consumers alike”.
BevCanna Inc Enterprises and Nextleaf Solutions Ltd are set to deploy a state-of-the-art nano delivery technology in their new line of CBD infused beverages. The technology will allow consumers to feel the effects of CBD in under 10 minutes. This will give both companies a clear advantage over their competitors.
Coca-Cola’s European Partners have expanded their Monster Energy portiolio with two new tropical flavored variants. These were added to their Monster Juice and Monster Ultra range of beverages. Monster Pacific Punch and Monster Ultra Paradise are the new variants. Now available in the market, these variants will enable the company to meet the growing demand for flavor innovation in the energy drinks sector, accelerating retail growth by 8%.
While Ultra Paradise has traces of Kiwi, Lime and Cucumber, Pacific Punch offers a blend of real fruit juices with an added caffeine kick. According to Simon Harrison, Vice President of Commercial Development at Coca-Cola European Partners GB, “The energy sector has grown by £99 million over the past two years and Monster has been a key driver of this, adding £68 million of value to the sector thanks to a growing core range, innovative new flavors and impactiul marketing campaigns”. He expects these beverages to tap into the ‘Energy Up, Calories Down’ category driver and the ‘Refreshing Kicks’ driver identified in their Energy Vision, both of which will help retailers boost their energy drink sales.
Despite lucrative growth prospects, leading beverage brands are wary about regulatory and environmental concerns. But their biggest issue is demand and the impact that it has on volume growth. As a result of this, numerous companies are focusing on two areas — innovation and emerging markets — to plug the gap
Meanwhile, in the developed world manufacturers are targeting the ‘bifurcated consumer’ — split between cash-poor value-seekers and richer purchasers, who seem interested in innovative premium products as fusion beverages.
Overall, the demand for non-alcoholic fusion beverages is on a rise. The rising health consciousness and the increasing demand for mouth savoury beverages will propel growth in this category. In the alcoholic beverages category, value will increase more as fusion wines are gaining demand in the premium wines categories.
Fused energy and sports drinks is estimated to be the most attractive segment among product types of fusion beverages over the forecast period. Since disposable income is snowballing, consumers are opting for premium wines and spirits; which in turn is enabling growth in the market for fused energy and sports drinks.
The beverage landscape is witnessing intense competition between enterprise and indie brands. Successful brands are scaling up with award-winning content strategies, emphasizing brand storytelling.
Present wave of beverages claims is no longer constrained even by the ethics of half-truth
Established Brands Emerging players/ Start-ups
Food & Beverage Products
Exclusively Fusion Beverages
US$ 7.3 Bn
(2019 – 2029)
Market Share by Product, 2019 Market Value (US$ Mn), 2019-2024
Percentage of Mentions
by Gender | Age Group
Percentage of Mentions
Percentage of Mentions