In a post-pandemic era, consumers aren’t just looking for the lowest price, they’re now considering things like functional benefits, environmental impact, and the experience a product may provide. It’s not about the lowest price anymore, it’s about the most value.
According to NPD’s America’s Health Pulse: Closing the Gap Between Wants and Needs report, although 85% of consumers have adjusted their spending habits due to rising inflation, there are still areas they are not willing to compromise on, such as functional benefits. In order to compete for the consumer’s dollar, beverage brands have to find new ways of being different, accessible, and premium. This has brands striving for the “it” factor that makes it a need for consumers. For example, Hydralyte recently partnered with actress Shay Mitchell to develop a ready-to-mix hydration beverage mix designed for busy days and workouts. Not surprisingly, PepsiCo, Coca-Cola, and Nestlé were among the top 100 innovative companies. With these new innovations, it’s likely that there will be an added level of competition as more and more products are made accessible and affordable to appeal to consumers. Inflation, however, may be reducing brand loyalty as the Morning Consultant found that 67% of consumers have switched to generic brands to save money. Despite this, consumers still want to try new products.
Younger generations like Gen Z are aligning themselves with brands and products that best resonate with their values. One cause in particular is the environment. In fact, #EcoTok was a trending hashtag on TikTok last year with the number of videos using this hashtag growing 42%. As consumers are becoming more aware of their environmental footprint, they’re discovering alternative sources of protein and climate-forward diets. More than 50% of respondents indicated that environmental sustainability plays a more prominent role than it did a year ago and brands are catching onto this. For example, Peachy Inc., a company that makes women’s pre-workout supplements, uses edible packaging to ensure there’s no waste. This trend isn’t expected to go away soon either, as it’s predicted that there will be more sustainability efforts such as the push to decrease the amount of packaging, using more upcycled ingredients, and finding plant-based alternatives.
Companies are also prioritizing expansion and innovation as 72% of surveyed consumers said it was in their top three areas to address. As consumers are looking for healthier and more sustainable options, companies are responding with new products packed with functional ingredients and presented in unique ways. A few examples include a non-alcoholic canned cocktail from Molson Coors; a ready-to-drink bubble tea from BUBLUV, and a cannabis-infused seltzer from Endless Coast. While these products might not be the newest innovations, they cater to consumers’ interests and preferred experiences.
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