Today, consumers are listing gut health among their top nutrition concerns, Telford noted. When it comes to supporting gut health, consumers often turn to two types of claims: probiotics and prebiotics. Probiotics maintain or improve the normal microflora (aka, the good bacteria) in the body, while prebiotics and beverage act as food for microflora.
"Gut health is one of the consumer’s top nutrition concerns – and I think there’s a recognition that digestive wellness and the microbiome is an integral part of immune support, which is also an important functional claim within food and beverage, particularly since 2020."
Prebiotic beverages innovate around flavor, while probiotics growth slows
Probiotics have experienced “some softness ... over the last two years in the US,” while at the same time, “we’ve seen growth in the use of prebiotics and dietary fiber in drinks,” Telford said.
Part of the growth in prebiotics is that brands “have been able to replicate the cola and fruit flavors that consumers expect from refreshment options,” which has been a “challenge in some probiotic options like kombucha, water, kefir, or some apple cider vinegar drinks,” Telford said. When it comes to mainstream appeal or prebiotic beverages, “flavor innovation has been key,” and “dietary fiber has less impact on flavor profile,” he added.
Brands like Olipop, Poppi, Vina, and De La Calle have been able to recreate many classic soda flavors, but with less sugar than traditional soda, Telford pointed out. These brands use different combinations of sweeteners "to arrive at 5-10g of sugar per can," while avoiding high-intensity artificial sweeteners that "have a negative connotation with consumers in the space,” he added.
Lemon-lime-flavored sodas: A growth area for entire category
Within carbonated soft drinks -- both tradiitonal and better-for-you -- lemon-lime is emerging as a top performing flavor in the US, said Telford, noting it was worth $4.5bn in the US 2022, and it “outperformed cola on a volume basis over the last three years."
Olipop announced the release of a lemon lime-flavored soda this week, which tastes like "sweet key lime pie with a fresh squeeze of lemon,” according to the product press release. Like other prebiotic beverages on the market, the lemon-lime-flavored Olipop contains four grams of sugar and nine grams of prebiotic plant fiber. The beverage is available nationwide at Whole Foods and on the brand's website, with plans to broaden its distribution later this year.
For the soda-plus subcategory, it "makes sense to offer some prebiotic and/or probiotic options to consumers who enjoy this flavor profile," Telford said. In the sub-category Olipop competes in, Vina and Health-Ade both have a lemon-lime-flavored prebiotic soda, while Poppi currently doesn’t offer one.
Looking more broadly at the lemon-lime soda segment, Olipop isn’t the only soda brand that has made news about the flavor. Last month, PepsiCo announced its plans to "kickstart some competition in this corner of the shelf" with the launch of Starry; its replacement for Sierra Mist.
Consumers might pay more for health, but don’t count on it
Though inflation is impacting how and what consumers are purchasing in the grocery store, the large price-premium functional space “remains strong,” especially for energy drinks, Telford said. On top of that, “consumers are prepared to spend on their health, and functional beverages (be it caffeine, probiotics, protein, etc.) can be an important part of the daily routine,” he added.
However, Telford said, when it comes to winning market share in this space, beverage brands will "need to maximize affordability in 2023, which is going to necessitate changes to package mix and visibility in the value channels like discounters and club that we expect to gain share.”