What is in this article?:
- 4 factors for selling functional beverages
- 1. What's hot
- 2. What's nutritious
- 3. What's legal
- 4. What's marketable
Functional beverages—natural and organic beverages that are fortified with vitamins, minerals or other nutrients—are a trend that retailers must understand if they hope to successfully target their consumers. We talk about what's in, what's nutritious, what's legal and what's marketable when it comes to these drinks.
The mind-bending array of functional drink choices available today may make retailers and consumers feel like Alice in Beverageland—dependent on marketing mad hatters to navigate the growing number of brands and formulations. Gone are the days when your beverage cases and aisles needed to contain only a simple selection of juices, waters, teas and sodas. Now consumers demand drinks that rev them up or slow them down, boost immunity and athletic performance, and even repair their skin or help them lose weight.
Functional beverages—natural and organic sodas, waters, teas and juices that are fortified with vitamins, minerals or other nutrients—are definitely a trend, not just a fad, says Jeff Hilton, partner and cofounder of Integrated Marketing Group, a Salt Lake City agency that specializes in branding natural products. “There are so many formulation possibilities that this category is far from reaching its full expansion potential,” he says. “I think it’s going to be huge.” So huge, in fact, that Hilton recommends most retailers devote 20 percent to 30 percent of their beverage mix to functional drinks.
The numbers back him up. Last year, shelf-stable functional beverage sales increased 59 percent in natural products stores, to $29 million, and 23 percent in conventional stores, to $118.3 million, according to Schaumburg, Ill.-based market research firm SPINS.
Within this category, energy drink sales in natural products stores rose 17.3 percent to $7 million, and sports drink sales skyrocketed 79.2 percent to $22 million. In conventional stores, energy drink sales grew 4.4 percent to $92.1 million, and sports drink sales jumped 238.4 percent to $26.2 million.
However, the news isn’t all good: Sales of functional juices and kombucha actually dropped 6.6 percent last year in natural foods stores, to $61.9 million, although sales were up in conventional stores, at $256.5 million.
You know you need to sell these types of beverages, but with hundreds of new product launches every year and a finite amount of space in your cases and aisles, how do you decide what to carry? Here are four factors experts say you should consider when making your decision.