Brain drinks, coconut water at forefront of beverage innovation

First the bad news: There’s been an across-the-board slowdown in beverage purchases, in 2008 and again in 2009, thanks to both less consumer discretionary income as well as higher ingredient prices and costs. Beer – beer! – declined in 2009 for first time in more than a decade.

Now the good news: People are drinking just as much as ever. One-third of consumers report refilling hitherto disposable plastic water bottles. And the new age beverage space is full of innovation – ready-to-drink teas, energy drinks, relaxation drinks, protein drinks and more.

“New and better functionality is moving in the market,” said beverage consultant Jim Tonkin, president of Healthy Brand Builders. ”Beverage innovation is clearly not dead.”

Perhaps the hottest new trend is coconut water, a sector Tonkin predicts “is going to be a billion-dollar category. This category is clearly on fire.”  Coconut water is also moving into fruit juices and drinks and coconut water-based smoothies, notes Tom Vierhile, director of product launch analytics at Datamonitor.

One new beverage launch is heralding the condition-specific age, with drinks purporting to aid certain organs or health conditions. Energy drinks and energy shots – 5-Hour Energy atop the heap of the shots world, Red Bull and Monster riding hard on the drinks – have caught on with, ironically, the age demographic least in need of energy, which is young males. In fact, the lines are blurring between energy shots and larger-size energy drinks.