Trends: Consumers Want More Functional, Healthy Beverages

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Consumers approach wellness in a holistic view these days. They prefer foods that come are organic and GMO-free, and other clean label cues. This trend is taking over drinks as well as more consumers want functional and healthy beverages.

The Trend for Healthy Beverages

Innova Market Insights, a Netherlands-based company, noted that many consumers are now becoming savvy when it comes to buying their favorite drinks. In 2016, a trend regarding the rising consumption of functional beverages rose to 27.2% from 12.6% in 2012. This means that more people opt for drinks that are fortified with vitamins and minerals or those that contain high amounts of protein for muscle buildup. These drinks are touted for their health benefits. The result is many companies in the US and UK are shifting their focus to healthy beverages to supply the growing demands of the market.

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Aside from functional beverages, there is also a growing trend called “lighter enjoyment” where consumers are opting for alcoholic drinks that have lighter alcohol content and more flavor and texture to reap the benefits of the alcoholic beverage without the need to be intoxicated.

Today’s shoppers are taking health and other wellness-related matters into their own hands, and this has created a niche within the beverage industry to meet the growing demand. There is an increasing number of consumers who are following healthy routines such as training and exercising, so they need a drink to support their lifestyle.

The Effect of The Healthy Beverage Market

So why are many people turning to healthy foods and beverages instead of medicine? People who are not getting their desired results from traditional medicine are trying out health and wellness products. The trend here is an opportunity for companies to innovate their products into functional food and beverages.

This is where personalization of products comes in as people have different preferences when it comes to their health and wellness. For instance, people who follow specific diets tend to avoid specific ingredients in their beverages. So the traditional, one-size-fits-all approach to creating drinks is no longer a reliable concept for manufacturers.


Many shoppers are making more focused and informed buying decisions. They are very mindful of the types of products that they buy.  Aside from the kinds of ingredients, the “why,” as well as the “how” behind the product, is an essential factor in the decision making process of today’s shoppers. This adds another layer of complexity to the food and beverage industry to develop products that will appeal to more educated customers.

Beverages attribute to more than $11 billion in global sales, and these highly competitive functional drinks are slowly creeping up to make up a quarter of the market. In fact, functional and healthy beverages made $3.1 billion in sales last year, and the projections seem to grow more by the year.

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PepsiCo Adding to Healthy Options Portfolio With KeVita Acquisition

The trend continues for big beverage companies to purchase smaller companies that manufacture healthier drinks. PepsiCo is no different. Recently, it revealed its intention to buy KeVita. This California-based company makes probiotic drinks and is famous for making kombucha, apple cider vinegar, and other healthy beverages.

KeVita offers nutritious drinks and it is known for its three product lines – Master Brew Kombucha, Apple Cider Vinegar Tonic, and Sparkling Probiotic Drink. These drinks contain live cultures of organic probiotics that can improve the condition of the gut microbiota. Healthy gut microbiota is crucial for stronger immunity and overall health. The company serves not only the health-conscious individuals but also those who follow dietary restrictions like vegans and celiacs (those who consume gluten-free products).

The Benefits Of The KeVita Acquisition

It is not only PepsiCo that has acquired smaller companies that cater to the health niche. Large corporations all over North America have seen the opportunity for mergers and acquisitions. PepsiCo’s acquisition of KeVita will help expand the food giant’s wellness and health offerings and also provide scale to a growing business.


Will this change the natural products offered by KeVita? Bill Moses, KeVita’s CEO,  noted that the company is transforming the industry of functional beverages and its acquisition by PepsiCo will still deliver the same products to KeVita’s loyal customers. The company will also be able to continue to operate its bottling facilities independently.

Reasons For Acquisition

Big food companies are always on the lookout for small, innovative businesses that are attracting an untapped market segment.  Smaller food companies better understand the needs of millennial consumers, so they are the faster to innovate. Many of these businesses are focused on the quality of higher margin products made from whole food, simple, and organic ingredients. These small businesses tend to have stable followers so that the bigger companies can absorb the clientele of the acquired smaller companies.

Small brands offer a sense of intimacy that larger companies do not have. KeVita, for instance, is popular among its customers as it delivers high-quality probiotics without any compromises. The small size of the group makes it easier to follow the highest standards in making their products. This is in contrast with the situation in most food manufacturer giants.

A Win-Win Situation

Aside from big business getting an advantage with the acquisition, the purchased company can still enjoy many benefits. Bill Moss added that joining the giant food and beverage corporation will give KeVita the opportunity also to reach PepsiCo’s broader audience. PepsiCo has the power to introduce KeVita to the global market. This action can put leverage on both companies regarding their marketing and distribution capacities. The acquisition is a win-win situation for both companies.

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Nielsen Says Consumers Are Now Ingredient Inspectors

With the advent of healthy living and clean eating, more people all over the world now practice due diligence when it comes to their food. In the recent Nielsen’s Global Health and Ingredient-Sentiment Survey, 70% of the respondents said that they make dietary choices to avoid health problems like diabetes, high blood pressure, and obesity. Nielsen has nicknamed these consumers the “ingredient inspectors.”


People Are Willing to Pay More for Healthy Foods

Around 68% of the respondents surveyed agreed that they are willing to pay more for healthy food and beverages. This was supported by U.S. retail sales data which indicated that the sales of health and wellness products are outpacing other types of fast-moving consumer goods.

According to Director Andrew Mandzy from Neilsen’s Strategic Health and Wellness Insights group, most consumers want to eat healthily. But they need the commitment from food manufacturers to create products that are made from simple and clean ingredients. Consumers depend on food companies to develop “better-for-you” products that are still convenient for their busy lifestyles.


Reasons for The Rise in Ingredient Inspectors

So why is there a rising trend in the food and wellness industry? Perhaps one of the reasons is food sensitivity or intolerance. The same survey conducted by Neilsen indicated that 36% of the respondents revealed that they opted for healthy foods because they are suffering from allergies or live with someone who does. The rise of lactose intolerance and seafood allergies was cited by 12% of the respondents.

Aside from food allergies, many consumers are actively excluding several ingredients from their diets. This motivation to eliminate certain foods can be brought about by religious influences or just small lifestyle decisions. Regardless, 64% of the respondents follow diets that prohibit certain foods or ingredients. For instance, 84% of the African and Middle Eastern respondents reveal that they follow a special diet as cited by their religion.  Respondents from Asia-Pacific scored 72% on the survey indicating that they support it for lifestyle and religious purposes. Most of them adhered to a vegetarian diet as reflective of their beliefs. Only 44%  of people living in North America and Europe cited motivation from religion to exclude ingredients in their food.


In the global survey, it was indicated that sugar is the most common ingredient that is eliminated by 31% of the respondents. Others limit their intake of carbohydrates and sodium for health reasons. Many of the interviewees are well aware of the effects caused by the foods they eat. In fact, 75% of people are anxious about the long-term impacts of incorporating synthetic ingredients into their food. Most of the respondents avoid foods that contain preservatives, coloring, and artificial flavors.

Consumers are demanding better food, and it’s up to food companies to supply this growing demand. It’s up to food companies to capitalize on the new opportunity and win customers with new healthy options.

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Papa John’s Removes High Fructose Corn Syrup from Menu

After decades of being under public scrutiny about serving empty calories to their customers, it is no wonder why many fast food companies have shifted their operations to eliminate unhealthy food ingredients. From McDonald’s kale salad to Chipotle’s sofrito and black bean salad, it seems that fast food restaurants are trying to serve healthier options. The infamous pizza delivery brand, Papa John’s, has followed suit by eliminating the use of high fructose corn syrup from their menu.

This national pizza place is pushing towards creating better and healthy pizza by removing one ingredient from its menu–high fructose corn syrup–on all its food items. This means that the pizza topping, sauce, and even desserts won’t contain this menacing sweetener. This is the first pizza delivery company in the United States to adopt this policy.


What is High Fructose Corn Syrup?

High fructose corn syrup is found in just about any kind of processed foods. It is a common sweetener used in creating soda as well as fruit-flavored drinks. It is also used in manufacturing different types of condiments such as ketchup, mustard, and other dipping sauces. This kind of sweetener is made from corn starch that has been converted into fructose. As a sweetener, it is often compared to table sugar. However, manufacturers are more attracted to it because of its low price point.

Excess consumption of high fructose corn syrup can contribute to unwanted calories that are linked to different types of health problems including obesity, type 2 diabetes, high blood pressure, high triglyceride levels, and heart diseases. Thus, the American Heart Association recommends only 6 teaspoons of added sugar for women and 9 teaspoons for men.

The decision for Papa John’s to completely remove high fructose corn syrup is big news to consumers who are looking for fast food chains that serve healthier food options.


What’s Next for Papa John’s

Chief Ingredient Officer Sean Muldoon noted that the company is always striving to provide foods made from high-quality ingredients, not only to improve the dining experience of customers but also to uphold their social responsibility.

This is the reason why the company is not only focused on the removal of the high fructose corn syrup in their menu but it is also looking for other ways to serve natural and healthy foods to its clients. For instance, the company is also now looking into using chicken that is raised without any antibiotics. The company has also stopped using fillers, MSG, artificial flavors, BHA, and hydrogenated oils in making their food. They are also looking into creating foods that will cater to their vegetarian and vegan customers.

Hopefully, the dedication of the company to produce better foods by using healthy ingredients will become a signal for other fast food restaurants as consumers continue to connect the dots between food and their health

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Jelly Beans Remain Unchanged 100 Years Later

Jelly beans, the chewy candy with a hard shell, was once thought to be related to Turkish Delight but eventually food historians agreed that it is an all-American food item created by William Schrafft, a Boston confectioner. While the price of jelly beans has changed from $0.09 a pound to almost $8 a pound, the shape and form of this little confectionery have remained the same after more than a hundred years. Latest trends call for “natural” food items which translate to food that is healthier and better for us. So, new jelly bean launches now use animal gelatin-free ingredients while still retaining its original shape, flavor, and color. Some manufacturers worry that the candy will never be the same again without gluten, but there are still challenges to reduce the sugar, artificial flavors, and color of jelly beans.


Jelly Beans: Private Label vs. The Brands

The jelly bean has become synonymous with Easter because of its ovoid shape and hard shell. After more than a century in the market, it had been sold in bulk with very little personality. Until 1976, when the jelly bean was re-marketed by The Jelly Belly Company as a new gourmet product. Jelly Belly used natural fruit purees and thus opened the doors for a wide variety of flavors. Have you ever tasted Jelly Belly’s pancake and maple syrup jelly beans? The company’s approach is to encourage customers to create their unique jelly bean flavor by combining different beans.



But other than innovating the flavor of the jelly bean, there were hardly any other changes to the candy. It is believed that the product’s association with the holidays made its innovation slower than ever. Tradition has made it a staple during Easter and Christmas. Therefore, it will less likely be considered a sophisticated candy that needs to be updated and periodically improved.



Private labels have positioned themselves as “gourmet” jelly bean manufacturers. The small private label brands now hold roughly 15% market share in the products launched in the past two years. Private labels may not have as many flavors as the Jelly Belly Company, but the industry has successfully gathered a large following in offering GMO-free, gluten-free and nut-free confectionaries. The claims of getting a gluten-free or allergen-free jelly bean variety may attract some customers especially those that are looking for candies that will fit particular dietary needs.

The jelly bean has seen little innovation over the past 100 years, and it will struggle to find any soon. Reducing the sugars and artificial flavors will be the biggest challenge for even the most forward-thinking companies in the jelly bean category.

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Reduced Diversity in Processed Foods Leads to Obesity

A researcher has claimed that obesity and cancer are not only a result of high-fat content, sugar, and salt in our diet but also the lack of diversity in our diets. Tim Spector, Professor of Genetic Epidemiology at the King’s College London, believes we are restricting our diets to processed foods with fewer ingredients. He thinks processed foods are responsible for the decrease in diversity of microbes in our guts.

Limiting Our Diets to Fewer Ingredients

Consumption of junk food is known by many as a big health risk, mainly due to saturated fats, high calories, chemicals, artificial colors, and sugar. 80% of processed foods are made up of four main ingredients: corn, wheat, soy, and meat. When compared to what our ancestors consumed, it is way too low. It is estimated that they consumed around 150 ingredients every week, something that we do not even come close to doing.

Studies have shown that it is the proliferation of a particular type of bacteria in our guts that are fueling the craving for junk food. The craving is leading to overconsumption, something that is definitely to blame for the high incidences of obesity, cancer, diabetes, and other lifestyle conditions. Literature suggests that each type of microbe in our gut prefers a given type of food, when it is deprived of that food, the bacteria is capable of doing anything to ensure it survives, the action can include signaling for more food intake.

Less Processed Foods, More Real Foods

low-calorie foods 1We have to fight back against these deadly lifestyle diseases and that starts with what we eat. At this point in humanity, it would be crazy to completely eliminate processed foods, but we have to eat less of them. We need to focus on consuming more real foods like our ancestors. As mentioned above, we need to eat a variety of ingredients. One should eat foods which are rich in fiber and consume adequate fresh fruits and vegetables. Manufacturers are also urged to reformulate their products in order to boost the diversity of ingredients in their products. Companies must accept that a majority of their foods are causing more harm than good, and should focus on improving the health of their customers as they move forward in creating products.

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Can Big Brands Adapt to Healthy Consumer Demands?

If you visit any supermarket or grocery store, then you will surely notice something new. Established packaged-food brands find it hard to compete with their healthy counterparts that are cashing in with double-digit growth. But even with this outstanding customer support, it is hard to keep up with healthy consumer nutrition demands.

Healthy Consumer Brands Sell Out For Growth

healthy consumerProducts that are additive-free, organic and non-GMO are growing at specialty-food stores, even though these companies may lack the money, marketing knowledge, and distribution chain to compete with the traditional food brands in local supermarkets. The solution that most of these firms come up with is simply to sell out. The much-needed support comes through selling to larger brands and food conglomerates. Niman Ranch, a natural pork, beef and lamb producer sold its company to become a Perdue Farms division, Applegate Farms producer of natural deli meats sold its company for $755 million to Hormel Foods. Finally, a Berkeley, California-based organic packaged foods company named Annie’s Inc. sold its brand for $820 million to General Mills.

There is no doubt that these marriages are the ideal response to changes in customer preferences when it comes to eating healthy. Customers are getting smarter, and they do not trust huge food brands anymore. It’s also tough for these big brands to use the words “healthy” or “healthier” when they use a laundry list of ingredients that are hard to pronounce. Large companies, therefore, have one option, and that is to acquire these smaller but healthy consumer brands.

The Tale of Two Brands: Kashi and Annie’s

grocery-consumerKellogg Co. purchased La Jolla, California-based Kashi in 2000. The cereal company gave Kashi resources and allowed it to manage its products. For a decade, the healthy cereal alternative grew, however, after Kellogg merged Kashi into its manufacturing arm that is also responsible for Frosted Flakes, the growth stopped. Kellogg customers sued the company for using synthetic ingredients for cereals that were branded as all-natural. Kellogg paid out a $5 million settlement for this case and in 2013, Kashi lost its California office. Its sales have never recovered.

General Mills did the same thing when it acquired Annies. Annie’s offices remained in Berkeley, California. General Mills took a different route and improved its commitment to organic agriculture. It plans to double their organically-farmed facility to 10 million acres in the next ten years. Annie’s president John Foraker uses Kashi’s tale as a reminder. “Annie’s values are a guiding influence at General Mills,” he adds. “There is a lot of change at Big Food. If they want to remain relevant to healthy consumers, they have to change.”

Change needs to be real to convince customers. This vigilance to provide the best and the healthiest food options may just be the best brand protection to consider.

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Change Starts With New Ingredients like NutriFusion®

It’s up to big brands to either acquire new, healthy brands, reformulate existing products, or develop new healthy products. All of these options can work for the growing healthy consumer segment. We are here to help you reformulate existing products and develop new products with our highly nutritional ingredients. Our products are made from organic, non-GMO produce and stabilized in our patent pending process. Our technology gives you the ability to create and fortify products with natural vitamins and minerals from whole fruits and vegetables without degradation through processing. If you are interested in learning more, please see the consumer packaged food page and download our products deck.