Functional health benefits are delivered across categories, and they’re more frequently prevalent in platforms that consumers can enjoy while on-the go. Fad diets are out, while fringe is in (as in, consumers appreciate benefiting from lesser known ingredients). 

Before delving into some specific beverage categories slated to experience innovation and growth in 2018 and beyond, here are a few macro-trends that are greatly influencing the food and beverage industry.

Food Tribes: These movements are influencing the conversation that many brands are forced to react and respond to. The main food tribes regularly gaining followers are veganism, vegetarianism, flexitarianism (or semi-vegetarians), paleo, locavores, and sustainability advocates.

These dietary preferences (which, by the way, are not mutually exclusive and levels of engagement may vary) have contributed to some of the most popular claims and messaging we’re seeing, including things like plant-based, powered by nature or plants, high protein claims, local, and fair trade. 

Everyone’s a Chef: The prevalence of meal kits has allowed consumers to have access to new products, experiences and dishes. To further address this need for ownership and crafting a meaningful experience (and managing portion control) we’ve seen make-your-own bagel kits, kombucha starter kits, homemade gin kits, and even a shelf-stable make your own hummus kit by a brand called hummustirs. 

Since we also know that consumers are increasingly interested in the process, expect even more do-it-yourself (DIY) cold-brewing and attempts at DIY nitrogenation. 

Personalized Nutrition: Consumers are interested in understanding more about their individual biological needs, so companies like Habit, Orig3n and Everly Well have popped. Now a consumer can send blood or saliva samples to these companies. In turn, they have dedicated staffer to either create a personalized meal plan or, at a minimum, inform consumers about how his/her biology reacts to and metabolizes certain nutrients. Kits start at $150, making gaining insights into how to become healthier relatively accessible, especially given the cost of other healthcare related tests and procedures.

Natural Function: Many consumers are using easily accessible information to make more responsible food and beverage choices. Products that feature ingredients that have inherent health benefits to them will continue to be popular. 

Imbibe predicts some naturally functional ingredients to increase in usage are matcha (benefits are associated with cognitive health), aronia berries (high in antioxidants), oats (associated with lowering cholesterol), turmeric (a powerful spice believed to have anti-inflammatory properties) and chaga mushrooms (an adaptogen thought to lower stress levels and also have anti-inflammatory properties). 

Digestive Health: Digestive health is a top priority of consumers because approximately 70 million US consumers suffer from digestive issues like IBS, ulcerative colitis, GERD and heartburn. As much as we have seen other digestive health related ingredients gaining consumer attention and popularity (namely probiotics and vinegars), we predict that fiber claims will increase in the coming year.

Fiber, an essential nutrient, has many benefits including contributing to fullness, promoting healthy GI function and reducing the risk of Type 2 Diabetes, and most Americans are currently only consuming half of the recommended daily value. 

Now that we’ve looked at some of the most pervasive macro-trends, let’s explore how they’re impacting beverage categories. The information below is based on Imbibe’s in-depth understanding of the beverage industry, which has been gained through extensive field and online research and exposure to and collaboration with some of the biggest global brands and industry thought leaders.

Enhanced Water

There’s a strong health halo around water, and the global bottled water market is expected to grow at a compound annual growth rate of 8.7% through 2020. This includes still, carbonated, functional and flavored water, though some might argue that water with sweetener, flavor, calories and color isn’t water at all.

Despite the potential controversy, many brands are positioning different types of products as water. There are a few noteworthy trends within enhanced water.

Plant or tree waters: This includes market share leader coconut, as well as cactus, birch and maple water. 

Waters for wellness: Waters fortified with probiotics, antioxidants, fiber and even pomegranate seed oil often include a wellness claim or put the word “immunity” on their product. 

Premium hydration: This is a segment that includes several brands that are fortified with electrolytes and minerals to achieve a higher pH which proponents say helps the body absorb nutrients more efficiently. One brand called Hfactor falls into this category; it’s hydrogen infused water and the package says that it’s been clinically proven to improve athletic performance, reduce inflammation and boost energy.

Energy: There is also a segment within the enhanced water category that’s devoted to energy. Energy water is sometimes fortified with protein, but many other brands (including Zevia, Hi-ball and Avitae) are adding caffeine (both natural and synthetic sources) to their water. 

Coffee

This customizable caffeinated commodity is a frequent platform for innovation—whether that’s through the addition of function to this global staple, or through textural manipulation. Here are the main innovations to watch in coffee.

Nitro: Nitrogen infusions give coffee a frothy or foamy texture that resembles beer. Coffee shops will continue to add taps to their establishments, and more RTDs will join La Colombe and Califia Farms on the shelves.

Sparkling: Carbonation adds textural complexity to flavor profiles that are potentially already complex, and it’s changing the landscape of the coffee category. Watch for expansion of brands like Matchless, Keeper’s and Chameleon Cold-Brew.

MCT Oil: There are an increasing number of products in the marketplace formulated with MCT oil, which is suggested to deliver benefits like increased energy and enhanced cognitive health. We expect even more butter coffee products like Picnik or Bulletproof RTDs.

Non-Dairy Milk Alternatives

Absolute Reports Pvt. Ltd. projects almond milk to grow at a CAGR of 15% through 2020, but this is hardly the only non-dairy milk alternative segment experiencing growth. In addition to the more established soy and rice milks, macadamia, tiger nut, pecan and pistachio dairy alternatives are available in a variety of flavors including strawberry horchata, dark chocolate, chai and banana. 

New nut milk lattes also continue to gain shelf space with combinations like matcha + coconut milk and maca + coconut milk from Rebbl Elixirs. Of course, there’s also Califia Farms, the trailblazer in premium plant-based milks. Califia developed a nitro cold brew latte with almond milk. 

Oat milk also will continue to make its way into third wave coffee shops and start to gain shelf space in the grocery store. 

Tea

Calling out the brew method is one way to enhance the premium positioning of a product and more tea brands are starting to offer cold brew teas. Evy Tea has offered cold-brew tea since 2014, and more recently, Argo Tea came out with a cold brew, biodynamic line of RTD teas. While the brew method plays into the taste profile more than the function, there are several functional tea segments experiencing growth: 

Kombucha: Dozens of kombucha brands have popped up over the past few years, and now it’s not uncommon to see kombucha on tap. A bit on the periphery, but a sub-category that we’re also watching is kombucha cocktails. One brand, Kombrewcha, leaves the alcohol in their kombucha, and we expect to start seeing more kombucha cocktails on menus and in the grocery aisle in the next one to two years. 

Matcha: The 2017 Google Beverage Trends Report took a deep dive into matcha and demonstrated that many consumers gravitate towards the earthy flavor of matcha. This versatile powdered green tea has popped up on a ton of menus and sales are still expected to grow. Its growth can also be attributed to its positive association with cognitive health.

Tea Lattes: Tea lattes are an emerging category, but so far, they all are using dairy milk. Non-dairy tea lattes are likely to make their way to the marketplace next, as they combine several health benefits with the demand for plant-based products. 

Veggie-Based

Veggies are being revived with upscale preparations and they’re also being used in more beverage applications. There are several brands that are highlighting less traditional vegetables in their products (peppers, lentils, sweet potatoes, etc.), which is a trend we expect to continue especially with the emphasis on sugar reduction. 

A few other ingredients that we expect to see more of in these veggie-based and/or savory beverages include beets, chaga mushrooms and algae.

Health and wellness will remain a priority for consumers, but close behind will be sustainability. You will start to hear about even more companies building their brand around upcycling. 

Also on-trend for 2018 and beyond: visually compelling products—we’re talking latte art, brightly colored foods and beverages, layered libations, and of course extreme indulgence, in whatever the next iteration of #freakshakes is. It just might be freak hot chocolate with donuts as the garnish of these sweet drinks, (similar to what Bombobar already is doing in Chicago).

Ilana Orlofsky is a marketing manager with Imbibe. Imbibe, Niles, Ill., is a beverage development company focused on formulating and commercializing new products. Imbibe designs custom ingredients, blends and flavors for products in all beverage categories. Visit www.imbibeinc.com for details.

Originally appeared in the March, 2018 issue of Prepared Foods as Drinks—As Delivery Agents.