Since this is our annual Disruptors issue, I thought it would be useful to also take a look at what we can expect in 2016 in the way of beverage category disruption.
There are a few overall trends that are behind most of the disruption the industry is currently experiencing. These include: a shift in many categories from mass-produced or mass-marketed beverages to hand-crafted, artisanal and local; a shift to beverages perceived to be more healthful and/or natural, and finally, a shift in beverage distribution. I’ll delve into each of these and explain why I think they will be the disruptions to watch in the coming year.
The shift from mass-produced, mass-marketed beverages to premium local, craft aka artisanal, is one of the most obvious trends the industry has been experiencing in recent years. The trend is far from over; 2016 will see a continued shift to craft beer and spirits and increasingly craft sodas. Authenticity is one of the big mega-trends behind this shift. Younger consumers today, armed with the ability to communicate with each other and fact-check over the internet, resent brands that they believe disrespect them by clouding the truth about things like ingredients or place of origin.
Tied into this is the continuing concern about the healthfulness of products. As the story on energy drinks points out in this issue, and the ever-growing size of the trade show Expo West attests to, there is no end in sight to the demand for healthier beverages. Functionality is a part of this. I think 2016, for instance, will be the year that probiotic drinks finally turn the corner in the U.S. and start to really gain traction. Even some in the American medical community are warming to the efficacy of probiotics. You can expect in 2016 a thinning of the probiotic herd, however, as those offerings with real efficacy survive while the others that don’t deliver real benefit fall by the wayside.
So expect continued rollouts of probiotic beverages in 2016. Also, disrupted by the health trend will be older, bigger brands that aren’t able to adjust fast enough and alter their ingredients to be more natural. Also, plant-based beverages like almond milk should continue to benefit from the shift toward more healthful and natural.
The fact is, consumers are increasingly looking for simpler ingredient labels with words they easily understand and recognize. It’s no accident, for example, that one of the major disruptions occurring is the shift from sugary sodas to simpler offerings like naturally flavored carbonated waters. Expect that disruption to continue unabated in 2016.
And finally, there is distribution. Technology is changing the way consumers buy their beverages with companies like Amazon, Drizly, and others really beginning to disrupt traditional brick and mortar retailing. Still find delivery drones amusing? You may want to take them more seriously. Just think about the disruption when it takes just hours to get product delivered to the home by drone.
Some other disruptions to keep an eye on in: marijuana-based drinks (just in their infancy), the continued shift to premium juices, and the individual packaging sizes in age-old categories like wine. There’s a lot of disruption to look forward to—or adjust to—in the coming year.