From Cola Wars to Health Drinks & More, Competition is Heating Up
It’s an exciting time to be a beverage brand in the CPG industry. This year has seen the landscape change in a variety of ways and competition is heating up. From the original cola wars that started in 1975 between soft drinks and have been ongoing since, to the explosion of demand for consumer health drinks, continued growth of direct-to-consumer offerings, sustainability pushes, and more, change is brewing.
Seek AI is on the cutting edge of AI in data analytics to help CPG brands understand their most critical insights from company data in an effort to generate better business outcomes. To give you a sense of how the CPG beverage industry is changing in 2024, here is a round up of the biggest trends impacting the sector to keep your eyes on.
2024’s Biggest CPG Beverage Trends
Evolving Landscape in Cola Wars
This summer, for the first time in decades, Dr. Pepper closed the gap in U.S. market share to tie with Pepsi as America’s second beverage of choice following Coca-Cola. Big marketing investments alongside product flavor innovations and a ubiquitous national restaurant chain offering have influenced an increased demand–particularly among younger Gen Z buyers.
Health-Conscious Buyer Demand Breeds New “Challenger” Brands
Consumers are thirsty for healthy drinks and startup brands are answering the call. Increasingly popular CPG beverage startups are disrupting the industry and nibbling at the profits of bigger players with their emerging products–many of which are health and wellness focused. Breakout brands like Olipop soft drinks, Koia plant-based shakes, and JuneShine hard kombucha are just a few examples of startups entering the market with beverage products serving increasing consumer demand for lower sugar/carb, higher protein, and nutrient rich household diet trends. In response to North America’s explosive weight-loss trend, several CPG giants are re-evaluating their product portfolios to meet consumer needs.
Strategic Pricing Adjustments Entice Value Conscious Shoppers
It’s no secret that consumer cutbacks in response to inflation have slowed CPG bottom lines. The National Retail Federation reported in March that while consumer confidence in the economy saw an uptick in January and February, the percentage of consumers prioritizing what they need to buy vs. what they want to buy grew 26% year over year.
Brands like PepsiCo have shared plans for increased marketing and adjustments to lower prices for certain snack category products that have seen sales decline. Meanwhile, 27% of consumers have opted for private label products to save on shopping costs, per NielsenIQ–supporting the private-label brand sales increase of 6% year-over-year in the U.S. to $217 billion in 2023. Danone reports that it has won back market share from private labels leveraging strategic pricing adjustments.
DTC Growth Continues - The global direct-to-consumer (DTC) food market as a whole is experiencing significant growth, with projected sales to reach $195.39 billion by 2031, growing at a CAGR of 18.7% during the forecast period of 2024-2031. Brands like PepsiCo expanded its DTC efforts with PantryShop.com and Snacks.com, which saw significant growth in 2023. NotCo, a plant-based food company has experienced substantial growth, particularly with its "NotMilk" product line now sold in over 3,500 stores across the U.S.
Conclusion
So, how do CPG beverage brands navigate this year’s evolving threats and opportunities for growth? According to recent research, as much as 41% of CPG companies are using Generative AI for data analysis to increase data effectiveness and scale actionable insights that can optimize growth. Seek AI offers the best natural language interface to ask your CPG data questions and extract answers you need to compete. Whether you need to segment buyers by brand affinity, analyze shopper basket data, or identify purchase trends in your data, Seek AI is the platform for your marketing team, category management team, and data team to rely on.
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