Diversify Beverage Offerings For a Healthier Bottom Line

Five opportunities to embrace as CSD sales drop

Published in CSP Daily News

grabbing beverage from the cold vault

OAKBROOK TERRACE, Ill. -- The moves consumers have been making toward health in the last few years can no longer be considered just a trend; they’re now the norm, and retailers and foodservice operators have had to answer the call for healthier options to compete for share of stomach.

In the same way, sugar-sweetened beverages—in particular, carbonated soft drinks (CSDs)—have been relegated to the back of the fridge in recent years, as concerned consumers have tried to cut added sugar and empty calories from their diets. Diet CSDs haven’t been exempt from this trend, either. In fact, this segment experienced a 2.8% decline in dollar sales from 2010-2012, according to Mintel’s June 2013 Carbonated Soft Drinks report.

Here’s a sampling of healthy beverage options that retailers and operators can offer to offset declines in CSD sales:

  • Sparkling water and seltzer. According to Mintel, the sparkling carbonated-soft-drink alternative segment—which includes seltzer, tonic water and club soda—increased 9.6% in sales from 2010-2012. By offering both flavored and unflavored sparkling carbonated-soft-drink alternatives, retailers and operators can appeal to consumers who enjoy carbonated beverages but want to cut calories.
  • Tea and coffee. Cold or iced, coffee and tea have long benefited from a “health halo” in the minds of consumers, and since they’re likely already in inventory for most retailers and operators, they’re an easy CSD alternative.
  • Sugar-free drink mixes. Offering versatility as well as portability, sugar-free drink mixes work well as stand-alone beverages as well as in “mocktail” recipes as a part of a signature beverage program.
  • Liquid water enhancers. Capitalizing on the customization trend, liquid water enhancers give consumers the opportunity to make their beverages their own while boosting bottled-water sales for retailers and operators.
  • Energy drinks. The energy-drink segment is expected to experience double-digit growth in 2014, according to a recent Beverage Buzz survey conducted by Wells Fargo Securities. These beverages provide consumers with an alternative to traditional, caffeinated CSDs.

Additionally, using menu callouts or special merchandising that promote these healthy beverage options can help drive incremental sales. According to Technomic, more than two-fifths of consumers report that they’re likely to purchase beverages that are advertised as “reduced-sugar” or “sugar-free.”