It's Not Your Grandparents' Beverage Market Anymore

Submitted by Market Crumbs

Welcome to 2019. This isn't your grandparents' beverage market anymore. Soda is being replaced by seltzer water. Beer is being replaced by spiked seltzer. A whiskey glass is being replaced by a whiskey pod.

Soda consumption in the U.S. fell to a 31-year low in 2016. Last year bottled sparkling water volume grew by 26% versus just 4.2% for bottled still water. Those statistics were enough for Coca-Cola to introduce its first new beverage line in more than a decade yesterday. The company is introducing AHA, a new brand of sparkling water, which will launch in March.

This isn't their first attempt at sparkling water. With the introduction of AHA, they'll be pulling their Dasani brand of sparkling water. They also attempted to make a Smartwater version that never took off. Consumers want healthier alternatives, which was echoed by Coke’s head of North American still beverages unit, who said "We’re fairly focused with this on extending our new brand and creating a new brand, as well as extending in other categories of our core equities."

Just like soda companies need to find healthier alternatives, beer makers are increasingly offering spiked seltzer drinks for calorie-conscious customers. Also yesterday, Anheuser-Busch announced its tripling down on hard seltzer drinks. In addition to its Natty Light and Bon & Viv offerings, they'll now offer Bud Light seltz in 2020.

White Claw, which brought attention to the category, is now in the top 25 brands among malt beverages and beers with sales surpassing all craft beer brands, except for Blue Moon Belgian White. Spiked seltzer is on pace to see another year of triple, yes triple, digit percentage growth to $1 billion in sales. They've become so popular the Brewers Association even changed its definition of a craft brewer to include drinks such as seltzers and THC beverages after a poll of association members found the majority intend to produce drinks other than beer in the next 3-5 years.

With consumers' beverage tastes rapidly evolving, the largest beverage companies appear to be at the point of doing whatever it takes to have products that are currently popular. With so many smaller beverage companies constantly coming out with new drinks, their only option may be to continue to acquire that month's hot beverage maker.