Key Findings in Health and Wellness Beverages 2018 Edition

The global health and wellness beverages market (including soft drinks and hot drinks) performed well in 2017, with naturally healthy (NH), and fortified and functional (FF) products driving growth. A string of acquisitions in organic produce is also stimulating the market environment.

Key findings include:

  • Global sales of naturally healthy bottled water are outpacing FF energy drinks and NH fruit/vegetable juice. Global sales of natural mineral water increased by USD3 billion in 2017, with China contributing around 36% of this growth. Despite this, energy drinks remains an attractive category for investors.
  • Compared to China and Western Europe, the US natural mineral water category has plenty of room to grow, and increased by 10% in the period of 2016-2017. International brands Perrier and S Pellegrino, seen as affordable foreign luxury, recorded another boom year. The Coca-Cola Company acquired Topo Chico, which has also helped build the category.
  • Sales of organic beverage amounted to USD5 billion in 2017 and are forecast to see further gains of USD1.4 billion over 2017-2022. Both organic coffee and tea are set to expand in sales by USD360 million each in the same period. East West Tea Co LLC, Lavazza SpA, Luigi, Starbucks Corp and Coca-Cola Co are the prominent players in this fragmented market. There were numerous acquisitions, most notable of these being Unilever’s purchase of Pukka and Lavazza’s Kicking Horse. Unilever is the world’s tea leader and the Pukka acquisition has raised the profile of organic tea plantation.
  • Globally, sales of NH RTD tea slowed, affected by decline in China and Indonesia. However, The US, Vietnam and Japan continued their growth momentum in 2017.
  • Global demand for green tea continues to rise, with significant export opportunities for Chinese and Japanese players. Sustainable sourcing of tea is a growing interest; major ethical labels include Ethical Tea Partnership and Rainforest Alliance.
  • Many countries have introduced sugar taxes, or on the verge of introducing such taxes. Despite this, global sales of reduced sugar carbonates are underperforming other major categories, such as tea and bottled water, growing by 2% in 2017; Western Europe recorded positive growth offsetting decline in the US. Diet Coke remains the world’s number one reduced sugar carbonate brand.