Grand View Research reports that product innovation is one of the major moves that most companies have been opting to enhance their revenue.. Dividing the inventory turnover ratio into 365 days yields the average length of time units are in inventory. Carbonated soft drinks. This ratio is a rough indication of a firms ability to service its current obligations. The beverage industry observers also spotlight emerging trends that retailers should keep an eye on. This figure must match total assets to ensure a balance sheet is properly balanced. Craft beverages of many types are on the rise, especially craft soda. Millennials, who are on the cusp of surpassing Baby Boomers as the largest living adult generation in the U.S. according to projections from the U.S. Census Bureau, tend to perceive dining as an experience. In this blog, well explore four key trends that drive carbonated beverage sales up. Beverage producers are responding to this push for more ethical drinks by supporting socio-economic and environmental causes that resonate with consumers. Senter similarly forecasts that plant-based beverages will see tremendous growth in the beverage category as consumers adapt to these offerings, as were currently witnessing with food.. They are inclined to pay more for authentic and flavorful beverages, and this shift is reflected in the new carbonated beverage flavors that are gaining traction, such as sparkling coconut water, vinegar drinks, and ready-to-drink teas and coffees. The higher the percentage, the relatively better profitability is. RTD varieties are in the spotlight as manufacturers develop new ingredient profiles that provide more benefits than ever before, i.e., protein, antioxidants, healthful herbal infusions, plant-based alternatives. According to Drizly, 71% of its current users and 50% of non-Drizly users anticipated that at least 50% of their alcohol shopping would take place online, versus in store, in the next year. Its no secret that these days, Americans are imbibing more often on their own premises. The onus is on U.S. retailers, suppliers and manufacturers to maximize a sizable revenue opportunity.. This percentage, also known as "return on total investment," is a relative measure of profitability and represents the rate of return earned on the investment of total assets by a business. Hybrid beverages, which offer opportunities for private brands to innovate via combining more challenging categories with beverage categories where private brands drive growth, i.e., water, coffee, recommends Taylor. Want to learn more about how RC Cola International can help you break into new markets with Royal Crown Cola? (null!=i&&i!=o.tag||null!=t&&t!=o.priority)}),gform.hooks[o][n]=r)}}); This field is for validation purposes and should be left unchanged. The products we are seeing are delicious, imaginative, beverages that also have clean, natural ingredients, in gorgeous packaging., For retailers looking to capitalize on this trend, Terrazzino advises: Adding an end cap display of beverages with added functionality gives the consumer the solution they are looking for: beverages that taste good and help build their immunity. This, in addition to an increase in the number of hours that the average person spends at work, is another trend impacting the craft beverage industry. Fizzy water or bubbly water or seltzer water is simply water that has been infused with carbon dioxide gas under pressure. The larger the ratio, the more able a firm is to cover its interest obligations on debt. Although bigger product packaging may be hot, Stone contends that [s]maller sizes will continue to expand to manage consumption intake and price-level issues, noting that Coke and Pepsi are offering 7- or 8-ounce options, and that energy drink shots are growing in popularity. beverage industry, Bottlers marketing, Out With the Old, In With the New: Whats Trending in Craft Soda, 1001 Tenth Avenue, Columbus, GA 31901, USA, One of Europes most popular craft beverages is carbonated soft drinks (CSDs), a growing interest in wellness and healthier beverages, Global Datas Top Trends in Soft Drinks 2018. the largest living adult generation in the U.S. new carbonated beverage flavors that are gaining traction, 52% of global consumers feel that they need an energy boost during the course of the day, Sierra Nevada acquired San Francisco-based brewery Sufferfest Beer Company, looking for innovation in the brands they love. craft soda This ratio is relevant for all industries. Examples of such liabilities include accounts payable, customer advances, etc. Increased at-home coffee consumption is likely to sustain beyond the pandemic as more of the population adapts to a remote work environment, she predicts. Mass Production or Craft Sodas - Whats Best For The Bottler? non-alcoholic drinks with ingredients that typically promote wellbeing). The pairing possibilities are endless. First and foremost, a growing interest in wellness and healthier beverages. Total Current Assets / Total Current Liabilities. However, conception of whats healthy has shifted. a diet that encourages mostly plant-based foods while allowing meat in moderation) partly because plant-based products are viewed as more sustainable than their animal-based counterparts. This percentage represents all claims against debtors arising from the sale of goods and services and any other miscellaneous claims with respect to non-trade transaction. While the global soft drink industry has been struggling with a drop in sales for over a decade, its clear that craft soda is uniquely positioned as a sector of the soft drink industry that continues to grow and thrive despite the general slump. This ratio is also known as "inventory turnover" and is often calculated using "cost of sales" rather than "total revenue." Imbibes predictions for 2019 state that the consumers choice is affected by environmental concerns, and one example is the growth of plant-based beverage products. This percentage represents the total of cash and other resources that are expected to be realized in cash, or sold or consumed within one year or the normal operating cycle of the business, whichever is longer. A surprising place to look for functionality in beverages is the beer industry, and this trend is having a huge impact. Additionally, with grocery e-commerce on the increase a trend accelerated by COVID-19 more consumers than ever are buying their booze online. Functional beverage ingredients expected to rise in popularity include adaptogens, healthy fats like MCT oil, nootropics, global spices and botanicals, BCAA (branch-chain amino acids), and superfoods like turmeric. Expect categories often supplied in an office environment or school to benefit most over the long haul.. It reflects the combined effect of both the operating and the financing/investing activities of a business. This new-found love of do-it-yourself cocktails extends even to low- or no-alcohol options mimicking favorite mixed drinks, while a certain beverage alcohol segment is on course for a meteoric rise. As a result, 35% of consumers are preferring to add functional ingredients through their diet by way of inherently functional beverages. There is no formal definition of craft; every producer has a different description. Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain. A similar strategy applies to beverages that need to be prepared, like most peoples morning go-to, coffee. (Total Current Assets * 100) / Total Assets. Infused water drinks, such as energy waters and juice-infused waters, are one of the leading trends this year. Get news highlights delivered directly to your e-mail inbox. Source: Daymon, Soft drinks sit at the crux between health-conscious abstaining and premium mixing, Nielsen notes. Two-for-ones, BOGOs and XX% off can be effective incentives for shoppers who are making fewer but larger stock-up trips in store, and online shoppers will also appreciate the value proposition of these discounts. Health has become top of mind for consumers throughout the pandemic, and consumers will continue to focus on overall well-being in the future, observes Julie Terrazzino, senior category manager at Naperville, Illinois-based KeHE Distributors, who is responsible for the soda, water, shelf-stable RTD coffee/tea and juice categories. Meanwhile, consumers purchasing in larger quantities could mean a boost for certain soft-drink concepts, while the product shortages especially prevalent at the beginning of the pandemic have influenced what consumers are drinking. Another trend we expect to outlast the COVID-19 pandemic is at-home alcohol consumption, says Terrazzino. The lower the ratio, the more solvent the business is. This percentage represents obligations that are not reasonably expected to be liquidated within the normal operating cycle of the business but, instead, are payable at some date beyond that time. Kimberly Senter, Advantage Sales, Eighty percent of consumers are focusing on what they consume as part of taking care of themselves, with 77% of consumers looking to lead a healthier life than pre-pandemic. This ratio is not very relevant for financial industries. Includes the necessary information to perform SWOT, PEST and STEER analysis. The products that are coming out now that help boost immunity are not yesterdays chalky or horrible-tasting products. By continuing to use this website you agree to the use of these technologies. No matter whats going on in the world, to paraphrase an old saying, people still have to eat and drink. Also, despite soft drinks less-than-healthy halo, Chicago-based Nielsen, at least, sees opportunities for growth amid a landscape of better-for-you beverages, noting in January that as soft drink manufacturers and brands continue to evolve to meet healthier lifestyles (with reduced-sugar, healthier and premium options), the opportunity to effectively and strategically engage both regular and occasional [alcohol] abstainers will continue to grow. The market research firm also identifies the use of soft drinks such as cola, club soda and ginger ale as premium mixers in popular alcoholic beverages as a growth spot. The contrasting flavor of snacks and drink works to complement each other. According to Terrazzino: [P]eople are not shopping as often, which means promotion frequency may be more strategic than depth of promotion. The higher the percentage, the better profitability is. beverage industry Provides Market Size information to assist with planning and strategic decisions. This percentage indicates the profitability of a business, relating the business income to the amount of investment committed to earning that income. It excludes loan receivables and some receivables from related parties. Lets take a look at some of the trends that are driving the growth of craft soda, and at how beverage producers and distributors can leverage these trends to their advantage. For his part, Stone believes that CBD beverages will come of age as FDA approval will happen, and especially as they will be formulated for lower impact per serving, and that [a] very high priority will focus on innovative packaging, as seen by the recent flurry of renewable packaging, especially from sustainable pulp sourcing, as brands [such] as Diageo, Unilever and Nestl lead the way., Consumers are seeking multiple benefits in a bottle, especially for immediate-consumption products." Meanwhile, Boston Beer Company, Americas second-largest craft beer producer, launched 26.2 in March, a light ale developed for runners with Himalayan salt and coriander. From the iconic Coca Cola and Pepsi to Sprite and Fanta, thats no surprise. La Croix. However, companies within the same industry may have different terms offered to customers, which must be considered. (Net Tangible & Intangible Assets * 100) / Total Assets. In fact, Senter sees the coffee segment in general as ripe for growth. Also, lower sugar content is another major trend as people have adopted dietary regimens that focus on low carbs/sugar. This percentage represents all current assets not accounted for in accounts receivable and closing inventory. Fifty-two percent of consumers surveyed said that theyve made more cocktails at home during the past three months, and 54% predicted that theyll continue to do so. Taking half of the global market share for 2019? Bottlers Net fixed assets represent long-term investment, so this percentage indicates relative capital investment structure. When Pets Need Oxygen Therapy, And What Your Veterinary Clinic Should Know, CalOx Helps LA Hospitals Manage the COVID-19 Crisis, https://www.grandviewresearch.com/industry-analysis/carbonated-beverages-market. Source: Daymon, Forty-four percent of coffee drinkers say their ideal coffee would have antioxiants, promote brain health (37%), help with relaxation (37%), or have high caffeine (28%). This percentage represents the net worth of businesses and includes elements such as the value of common and preferred shares, as well as earned, contributed and other surpluses. Generally, the greater the number of days outstanding, the greater the probability of delinquencies in accounts receivable. Craft sodas are increasingly becoming viewed as a popular alternative to traditional soft drinks, and as a substitute for alcoholic beverages. This ratio is also known as "times interest earned.". Retailers should consider carrying larger beverage sizes and multipacks and promoting items more strategically to accommodate consumers shopping in stores less frequently. How to Identify Beverage Industry Trends Before Your Competitors. Terrazzino observes that these offerings have become a stress reliever and brought feelings of well-being during COVID-19.. While sugar content is a major consumer concern in categories such as juice, hybrid drinks offer an avenue to enhance functionality while decreasing sugar content.. Bubly. The increase in sales comes from consumers limiting the frequency of their shopping trips, along with the closures of restaurants, bars, events, schools and other gatherings, forcing consumers to eat and drink at home. The company has seen a sharp uptick in sales of cocktail ingredients since mid-March, with mixers, syrups and bitters becoming the fastest-growing category on the platform. IBISWorld provides research covering hundreds of similar industries, including: Purchase this report or a membership to unlock the average company profit margin for this industry. IBISWorld reports on thousands of industries around the world. Water and soda have been the biggest winners in this trend, with their gallon or multipack sizes., That being the case, she continues, Creating a mass display of multipacks or large sizes, like sparkling water, noncarbonated water, soda and juice, will help the consumer fill their basket quickly with products that they want and will keep the retailer in stock while reducing labor and touchpoints.. This percentage represents all current loans and notes payable to Canadian chartered banks and foreign bank subsidiaries, with the exception of loans from a foreign bank, loans secured by real estate mortgages, bankers acceptances, bank mortgages and the current portion of long-term bank loans. Millennials, in particular, are interested in small batch, artisanal products and mission statements that place an emphasis on the environment and healthy living. This attraction to plant-based beverages and products that are viewed as having a strong ethical stance is another trend contributing to the growth of the craft beverage industry. Finally, the last trend we are seeing is the powerful pairing of the right carbonated drink with the perfect food. 1. https://www.grandviewresearch.com/industry-analysis/carbonated-beverages-market. Successful innovative beverage offerings must align with more general health-and-wellness aspirations, including natural and clean ingredients [and] transparency, as well as the desire for higher-quality experiences., Noting that [t]he time is now for retailers to take advantage of the accelerated growth within the functional space, providing communication around the end benefits of various functional claims, Taylor advises that private brands must innovate within functional beverages to maintain or outpace competition, [and] have the opportunity to lead growth. The lower the positive ratio is, the more solvent the business. Time-starved professionals seeking ready-made, wholesome food and beverages that can be consumed on the go is another driver contributing to the growth of the craft beverage industry. See if you qualify for a free subscription to our industry leading paper magazine. Because it reflects the ability to finance current operations, working capital is a measure of the margin of protection for current creditors. They appeal to todays consumers, who are more health conscious and seeking clean and wholesome alternatives that reflect their lifestyle. Taylor, meanwhile, as noted earlier, has identified the celebrated bean as ripe for a functional upgrade, along with its leafy counterpart, tea. Even as states reopen and allow for some form of on-premise consumption, those who became accustomed to imbibing more frequently at home are likely to keep at it, the company notes. From 2020 to 2027, the compound growth rate is projected to be 5.1% annually. This figure represents the average value of all resources controlled by an enterprise as a result of past transactions or events from which future economic benefits may be obtained. The fizz from an ice-cold drink helps in enhancing the mealtime experience.. It indicates the profitability of a business, relating the total business revenue to the amount of investment committed to earning that income. According to Grand View Research, These beverages are paired by contrasting or mirroring the flavor of the snacks. Generally, the higher the current ratio, the greater the "cushion" between current obligations and a firms ability to pay them. Carbon dioxide, of course. Coffee shoppers are adapting to preparing their own coffee and are seeing the value in more affordable coffee versus away-from-home premium prices.. Conversely, demand for customized or personalized concepts of SKUs will make it difficult to gain retail access, and more innovative brands will likely increase DTC [direct-to-consumer] efforts to go directly to consumers with expanded assortments, in addition to larger-case sales offerings, he observes. From a consumer standpoint, coffee drinkers say their ideal coffee would have antioxidants (44%), promote brain health (37%), help with relaxation (37%) or have high caffeine (28%). C+7 u F[ 8 ! Now, the trend has been extended to include both non-alcoholic and alternative beverages (i.e. This percentage represents tangible or intangible property held by businesses for use in the production or supply of goods and services or for rental to others in the regular operations of the business. There has been a major lifestyle shift in the last 20 years or so that is largely internet based, which allows for remote work and life on-the-go. This figure expresses the average number of days that receivables are outstanding. Considering these changes, its no surprise that Grand View Researchreported that organic craft soda emerged in 2017 as the fastest-growing beverage in the industry. @=S #}z] ' Spindrift. Unsurprisingly, given the ongoing concern about getting sick, health and wellness is a key long-term trend identified by various industry observers. 70% of respondents said they are planning to continue to drink less away from home, and 30% are poised to do so more at home for the remainder of the year, at least.. Consumers are looking for other functional benefits, such as beauty, weight loss and gut health, and particular hype surrounds drinks with superfoods, such as turmeric, matcha, melatonin, aloe vera, and others. It excludes assets held for rental purposes. We also use third-party cookies that help us analyze and understand how you use this website. If you havent tried a carbonated sports and energy drink, its likely in the near future that you will. But according to market researcher Imbibe, being green isnt just about plastic. Generally, it stands for natural ingredients and minimal preservatives. Once discovered or rediscovered such seductive solaces often prove hard to relinquish, even when times improve, so these beverage choices may well persist beyond the current health crisis. This will lead to the continued growth in energy, RTD coffee and sports drinks, whereas carbonated soft drinks, bottled juices and iced tea may continue to decline., Health-and-wellness-focused beverages, including the use of functional ingredients, will outlast the pandemic, asserts Michael Taylor, president of Stamford, Conn.-based private-brand consultancy Daymon. Within the functional segment, Taylor points to solutions for the aging population and parents with kids, as well as to beverages as meal or snack replacements. Another trend impacting the craft beverage industry is a growing consumer interest in beverages that provide particular functional benefits. (Current Bank Loans * 100) / Total Assets. Emerging trends include high-protein plant-based beverages, the mainstreaming of CBD beverages, and sustainable packaging innovation. This is a solvency ratio indicating a firm's ability to pay its long-term debts, the amount of debt outstanding in relation to the amount of capital. These products provide an opportunity for soft drink producers and distributors, because they maintain health appeal while still delivering on sensory and functional levels. Examples of such items are plant, equipment, patents, goodwill, etc. Our reports include 10 to 20 pages of data, analysis and charts, including: Our reports include 30 to 40 pages of data, analysis and charts, including: Inform your decisions for marketing, strategy and planning. What gives bubbly its bite? (Other Current Assets * 100) / Total Assets. When you relate the level of sales resulting from operations to the underlying working capital, you can measure how efficiently working capital is being used. While everyone is anxious to get back out to bars and restaurants, the at-home experience has allowed many people to creatively reconnect to family and friends while enjoying a cocktail. Whats more, this market size is anticipated to keep growing. Predicting that the beverage alcohol mashup will continue as mocktails with low/no ABV, Stone also acknowledges that hard seltzer brands like White Claw and Truly are rewriting new approaches to reach the consumer. This observation aligns with Nielsens recent assessment of the beverage as the most resilient alcohol segment in the U.S., due to its correlation with health and wellness, convenience, and an intriguing variety of flavors.. Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers businesses, or your competitors businesses. The debt to equity ratio also provides information on the capital structure of a business, the extent to which a firm's capital is financed through debt. The inherent functionality of coffee and tea has made this category an easy-to-adopt vessel to provide consumers with enhanced functionality, he points out. And they particularly love it when it is flavored with a touch of fruitlemon, grapefruit, tangerine. Consumers have moved away from looking for low fat/no sugar products to seeking ingredients that are organic, environmentally sustainable, and wholesome. Also noting the runaway popularity of wine, followed by cocktails and beer, Stacy DeBroff, founder and CEO of Boston-based social media and digital marketing firm Influence Central, urges marketers of alcohol brands and services to capitalize on the growing momentum of online grocery and pickup. *Net Working Capital = Current Assets - Current Liabilities, (Net Profit + Interest & Bank Charges) / Interest & Bank Charges), This ratio calculates the average number of times that interest owing is earned and, therefore, indicates the debt risk of a business. It includes obligations such as long-term bank loans and notes payable to Canadian chartered banks and foreign subsidiaries, with the exception of loans secured by real estate mortgages, loans from foreign banks and bank mortgages and other long-term liabilities. More people are adopting a flexitarian lifestyle (i.e. Vital industry facts, trends and insights in a new, shorter format. This percentage represents all other assets not elsewhere recorded, such as long-term bonds. A major factor in the rise of in-home consumption of alcohol, as with such old standbys as hot cocoa or favorite sugar-laden beverages from childhood, is the need for simple comforts in difficult times. This trend is meeting the need for sustainable craft beverage products, which are known for their use of glass bottles, and carefully selected ingredients. If youre in the industry, it may not surprise you to learn that the global carbonated beverages market size was valued at approximately $407 billion in 2019. Old players have an advantage in brand-loyal consumers; trust and familiarity are top drivers for a consumers purchase decisions, and people tend to stand by trusted brands while continuing to seek out other options.