'A Golden Age of Innovation'

Consumer trends are forcing a renaissance of beverage development

Retailers and consumers are living in “a golden age of beverage innovation,” according to a report from Packaged Facts that looks at packaged-beverage trends.

“Ideas are flowing like perhaps they haven’t in decades, if not a century,” said David Sprinkle, research director for Packaged Facts, Rockville, Md. “Indeed, until recently, the beverage industry had remained untouched by radical transformation. That is not the case any longer.”

After decades of being a rather staid business dominated by only a few major, national brands that were slow to innovate, a confluence of modern trends has unplugged the innovation pipeline for the beverage industry.

Those innovations include extended-release energy drinks that last longer, meal-replacement drinks customized to individual needs, water bottled from trees and easier-to-digest milk from a new kind of cow.

These are just a few of the innovations that everyone will be talking about in the next few years, according to the report, which concluded, “We are living in what can only be described as a golden age of beverage innovation.”

The report also identified several consumer trends driving innovation, including a desire for more healthful products with cleaner labels; the emergence of new ingredients, production processes and technologies; and the coming of age of millennials as the dominant consumer demographic, a group that is adventurous when it comes to trying new things.

Even beverage categories that have struggled in recent years—carbonated soft drinks and juice, for instance—are newly invigorated by the innovation, the report says.

A prime example worth watching is Plano, Texas-based Dr Pepper Snapple Group’s Bai, which launched in 2009 as a low-calorie fruit drink promising antioxidants and natural ingredients. Recent innovations have added bubbles (Bai Bubbles, pictured) and more familiar soda flavors (Bai Black).

Meanwhile, Farmington Hills, Mich.-based Living Essentials has expanded its popular 5-hour Energy shot line into a 6-ounce dietary supplement packed with 21 grams of protein, in addition to the caffeine.

“Innovation is touching every aspect of the beverage industry today, and there is a lot more on the horizon,” said Sprinkle.