Progressive Grocer

DEC 2016

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44 | Progressive Grocer | Ahead of What's Next | December 2016 C onsumers' desire for healthier foods with fewer ingredients is having a significant impact on the beverage cat- egory. e result is a dizzying array of new products that's causing retailers to find new ways to accommodate shoppers' changing tastes for fresh, healthy forms of refreshment. SPINS defines the refreshment drink category as shelf-stable and refrigerated ready-to-drink tea and coffee, refrigerated juices and functional beverages, shelf-stable juices, shelf-stable functional beverages, carbonated beverages, and nonbulk water. ose segments, which are becoming harder to define as new products blur the distinctions between channels, grew 4.5 percent last year, according to Kora Lazarski, senior strategic alliance manager at Chicago-based SPINS. Most of that growth came from healthy/ natural beverages such as premium juice, kombucha, plant-based water, and single-serve tea and coffee. A focus on healthier, fresher beverage alterna- tives is causing retailers to rethink their product mix in center store and to scramble to create a greater amount of refrigerated sections that accommodate a wider selection of higher-priced fresh and functional options. Fresher taste without preservatives also means narrow refrigerated shelf life, so retailers must manage the category more tightly than ever before. Manufacturers continue to offer new products to satisfy younger consumers, who are thirsty for a steady stream of innovative items that offer the most on-trend ingredients, and who are reaching for many types of beverages over the course of a day. e new beverage landscape is ultra-fractured, with innovations blurring the lines between segments (sparkling tea and natural juice-flavored waters are just two examples). "In the last year or two, retailers are reducing the amount of space they are giving to carbonated soft drinks and significantly expanding their selection of healthier beverages," says James Hoagland, CEO of Brooklyn, N.Y.-based Ito En North America, manufacturer of the Teas' Tea brand of RTD green tea and Matcha Love beverages. "Conventional channels are quicker to respond than they have been in the past, and we're seeing trends move into the mainstream at a much faster pace," observes Lazarski. Once found exclusively on health food and specialty food retailers' shelves, products such as kombucha and chia beverages are migrating more quickly than ever before to con- ventional supermarkets as retailers seek to satisfy Drink to Health Focus on function has retailers rethinking assortment, merchandising. By Barbara Sax Ref R e S h Retailers are rethinking their approach to center-store beverages given the influx of new, healthier options. Beverage Supplement

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