SPECIALTY BEVERAGES
Specialty beverage space is in a period of change as trends evolve Some manufacturers have noticed changes in consumer habits around specialty beverages and have started to supply the market with new and interesting product varieties. Adam McCleery reports.
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s consumer tastes continue to evolve, the specialty beverages market continues to reap the benefits. In recent years, the specialty beverage space – everything from craft beers and spirits to sugar-free juices and sports drinks – has seen a spike in popularity on the back of several factors. Research figures from Ibis World give some insight into the current state of the specialty beverage market in Australia. The Australian beverage market grew by 9.2 per cent over the past year with earnings expected to see growth up to 18 per cent per year soon. As of 2022, the Australian functional beverage market was worth $451 million, with an expected growth rate of 2.8 per cent by the end of the year, which is a large increase considering the market only saw growth of 0.9 per cent from 2017 to 2022. Functional beverages are
non-alcoholic drinks that contain non-traditional ingredients such as vitamins, minerals, fibres, probiotics, and added fruits. This includes products like energy drinks, sports drinks, and enhanced water. The report attributed functional beverage market growth to several factors including a rise in health consciousness in consumers, which is causing an increased demand in products like nootropic and other health drinks. The main factor expected to impact the growth of the functional beverage market is a rise in competition as manufacturers continue to move into the space. However, the expected containment of the COVID-19 virus will also help production and distribution numbers. Currently, there are 32 manufacturers of functional beverages in Australia including Coca-Cola Amatil, Asahi Holdings and Nexba Beverages. However, these figures are expected to grow with the popularity
22 Food&Beverage Industry News | March 2022 | www.foodmag.com.au
of functional beverages. Innovation in energy drinks is expected to slow as manufacturers address product variation and innovation in other areas of functional beverages. One such beverage manufacturer, Nexba, is seeing continued success in the specialty beverage space and founders Drew Bilbe and Troy Douglas expect that growth to continue well into the future. During his early market research, Bilbe discovered that consumers were looking for healthy alternatives to traditional soft drinks. “It was only about one to two per cent of the beverage market and it seemed like they just weren’t resonating with Australian consumers because they were packed full of sugar, which caused consumers not to recognise them as a better-for-youbeverage,” he said. “At that time, we didn’t have much else. There were traditional energy drinks, but people understood they
weren’t healthy. This concept of better-for-you-beverage space really didn’t exist in Australia.” A jump in brand awareness for Nexba was also an indicator that the consumer was eager for more specialty beverage offerings, whether better-for-you or functional and similar offerings. The rapid growth of Nexba wasn’t just an Australian market phenomenon, the company launched its line in the United Kingdom in 2018 and within a few years became the nation’s number one Kombucha brand. “But the idea of functional health, gut health, cognitive health and all these other things have been a more recent focus, COVID has helped drive that. People are more aware of their immune system requirements, for example,” said Bilbe. According to figures from the Australian Bureau of statistics, non-alcoholic beverage consumption accounted for 22.6 per cent per daily capita in 2019-20, indicating
