Innovation Filled the U.S. Non-Alcoholic Beverage Market in 2018

NEW YORK — When it comes to non-alcoholic beverages, U.S. consumers have a thirst for trying new products.

In 2018, innovation filled the U.S. non-alcoholic beverage market, with new products — including new product launches, brand extensions and new flavor offerings — accounting for 10 percent, or $5.8 billion, of the $56 billion beverage category, according to Nielsen.

When looking across the calendar year, Nielsen Innovation Measurement Activity data found that July was the heaviest month for product innovation with 621 new innovations and November was the lightest with 169 new products.

Innovation was widespread across the non-alcoholic beverage category, but buzz also surrounded the invigoration of beverage staple categories such as milk, water and tea. For example:

• Dollar sales increased 17 percent from last year in the $2.1 billion sparkling water category mostly due to new players and new flavor offerings.
• The $1.7 billion milk alternatives category saw consumers opting for alternatives like almond milk (up 12 percent in dollar sales growth vs. last year) and oat milk (up 69 percent vs. last year).
• Kombucha, a $433 million category, revitalized the tea market with new, compelling offers.

In the ongoing quest for improved health, water remained a top choice for consumers in 2018, with the staple experiencing a 6-percent increase in sales over the past year, pushing total sales to more than $16.1 billion. The raise in water sales hits well above the 2.4-percent growth that the overall beverage category experienced and was led by strong demand for both sparkling and value-added waters, Nielsen noted.

Bubbles were a top innovation characteristic in 2018, as 71 percent of new items to the category were sparkling waters, followed by water items with "calorie free" claims.

Innovation will continue to be a play an important role in the non-alcoholic beverage category in 2019; but, to be successful, U.S. beverage manufacturers will need to continue to work hard to maintain consumer interest and introduce meaningful innovation to stay competitive and relevant in today’s increasingly crowded product marketplace, Nielsen stated.