It's a tumultuous time in the beverage industry. With health regulators, city officials and the average consumer expressing backlash against sugar-laden beverages, many are looking to health drinks with a specific focus on organic drinks as the new trend in the beverage industry. However, consumers will not likely sacrifice taste for health, spurring a very important question: what exactly will the global organic drinks market look like through 2020? Fortunately, Technavio has done some of the legwork for us. According to Vijay Sarathi, a Technavio industry analyst for non-alcoholic beverages:
"In North America, more than 3 million hectares of farmland were managed organically in 2012; of these, 2.2 million were in the US and 0.8 million in Canada, representing approximately 0.7% of the total agricultural area in the NA region and 8% of the world's organic agricultural land. Proximity to arable land and organic crops therefore make the North America region a key consumer of organic drinks."
Technavio believes there will be an increase in product innovation during the four-year stretch, including zero-calorie beverage offerings, unsweetened and caffeine-free teas and organic soda, which could all become popular by 2020. High pressure processing technology was also touted as an important manufacturing factor to watch going forward; as the technology allows for the preservation of drinks for longer without a distinct alteration to nutrition and taste, making it possibly a pivotal change in the beverage industry.
Private label brands will also likely jump in the next four years. Private label organic drink brands are already gaining prominence globally, and are offered at a better price point when compared to nationally-branded products. Examples include Kroger’s Simple Truth, Supervalu’s Wild Harvest, and Aldi’s Simply Nature, and some retailers expanded their portfolios to include premium products and brands in the organic and natural segment. Private label brands are expected to reach a market size of close to $122 billion by 2018, and many products contributing to this growth will be organic.
Organic alcohol will also likely be a hot seller through 2020. Organic beers and wines are expected to grow at a rate of 24.5% between 2013 and 2019. Organic labels do not typically emphasize taste, but consumers are often attracted by the quality of ingredients. Many breweries are expected to launch organic labels within the next few years to help carve out a niche for themselves in the competitive beer market.
What organic drinks do you think will take the market by storm in the years leading up to 2020?
Ninety-eight bankruptcies were filed by companies with at least $50 million in liabilities year-to-date, the highest since 2009, reported Bloomberg (May 28).read more
Chris is a business writer and market analyst that focuses on the Markets, Legal and Washington sections of the Food Institute Report. In addition, he assists in compiling data for various Food Institute publications throughout the year. He invites you to contact him via email at firstname.lastname@example.org to talk about anything food-related.
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