New takes on old trends uncover what drove the beverage industry in 2024

Near the end of every year, publications everywhere start hurling predictions about their industries like Nostradamus after eating some particularly functional mushrooms. We at SupplySide Food & Beverage Journal may be guilty of this as well, and yet the amateur soothsayers of the world are never held accountable for whether their prophecies came to pass. Until now.

I recently sat down with Scott Dicker, senior market insights director at SPINS, to talk through the trends. Rather than discussing the trends of tomorrow, however, we took a look into the past, analyzing my beverage prediction story from last year to see how things really shook out. Prepare to explore new insights and data on the latest trends in functional ingredients, food safety, nonalcoholic beverages and more.

SupplySide Food & Beverage Journal: How has the market for functional mushrooms in coffee evolved in the past year?

Dicker: There’s been a lot of interest in super mushrooms. This has been an ongoing trend that we’ve seen over the past couple of years, especially with them entering beverages. We actually saw, year to date, a 30% increase in functional mushrooms in the shelf-stable coffee category in the natural channel this year. I’ve noticed a lot of lion’s mane (Hericium erinaceus) being added to energy drinks. So, while there seems to be a health halo around mushrooms and functional mushrooms in general, I don’t think consumers are too keen on what each mushroom does, so to speak. I think they’re added for health focus rather than being the hero ingredient. They’re trying to expand beyond [caffeine] for cognitive health and focus, and lion’s mane seems to be a solid ingredient in that realm.

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SupplySide Food & Beverage Journal: What about some of the newer functional ingredients that you’re seeing? Are there any under-the-radar superfoods that could be the next big thing?

Dicker: There are a few. I think in general, with different superfoods, you’ll see them cross over into functional beverages first. Not sure exactly which one’s going to be the winner, but I still think that there are a couple of prime opportunities for nonenergy functional ingredients, and so you see things like magnesium doing well for those relaxation and mood support beverages. Kava is another one that’s been [growing]. You see them doing well, you’re seeing strong growth for a lot of them, but they haven’t exploded quite yet. I still think there’s an opportunity for a brand to execute really well and be that category creator for that kind of relaxation beverage. It’ll be interesting to see which brands and which ingredients at which dosages are going to set it up.

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SupplySide Food & Beverage Journal: How do you think perception around potential safety concerns with these ingredients has shifted (or needs to)?

Dicker: As far as the dose goes, I think there are two things to look at. One, obviously, it should be a safe dose; but at the same time, it should be an effective dose because one of the reasons that a lot of these products have not taken off is that they’re not at a dose that gives consumers that relaxation feeling. That’s why energy drinks always do so well — because [the consumer can] feel it. I think there are a couple ways to look at it: just having an ingredient on the label might entice someone to buy it once, but then it might turn them off if they’re not getting the desired result.

SupplySide Food & Beverage Journal: What are some of the trends around fermented drinks that you’ve seen over the past year?

Dicker: It’s interesting because ever since kombucha took off, people have been asking, ‘What’s going to be the next kombucha?’ You mentioned a few of them like kvass, which does seem to be doing well … cross-channel, it’s been up low double digits year to date right now. And then there’s tepache, which is made from fermented pineapple. Those are finding some success. And I always say, ‘What’s the next kombucha?’ It could be kombucha, but in the versions that are sold in Europe, where they’re shelf stable, they’re not as strong, they’re not as intensely flavored and they’re sold at a price point similar to a premium soda. But when we talk about fermented beverages, what the consumers are really interested in is gut health and microbiome [benefits]. And in that sense, the clear winner over the past couple of years has been soda. Bringing the gut health benefits to a familiar category with familiar flavors has been a really successful strategy.

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SupplySide Food & Beverage Journal: What do you think about the current state of the nonalcoholic beverage category?

Dicker: I have this theory that the market for nonalcoholic [beverages] can be the same as, for example, decaf coffee, which will never come close to the alcoholic or caffeinated market, but there’s still a lot of room to grow. We’re seeing it split into two focuses. One, there’s nonalcoholic versions [of traditionally alcoholic drinks] — your nonalcoholic beers or your mocktails. And then there’s what we talked about earlier, where it’s a functional beverage that’s meant to give you that relaxing feeling. Those are our two categories, but both are seeking to replace that alcoholic beverage in certain aspects. When you think about it, beverages are so ingrained in our daily routines, and I think what we’re seeing is an evolution of that after-work beverage. So, what’s going to fill that space?

SupplySide Food & Beverage Journal: How have flavoring systems and technologies been influencing food and beverage markets and where do you think they’re heading?

Dicker: I’m not the person to comment on the actual technologies, but what I can tell you is what will be in our 2025 trends piece, and that’s to look out for an emphasis on nonsweet flavors. We’re seeing trending flavors like spicy, sour and salty. We spend a lot of time, especially in the beverage space, but in food as well, talking about alternative sweeteners. Because if things are not going to be loaded with sugar, we tend to think they’re going to be replaced with alternative sweeteners, whether it’s a natural sweetener, an artificial one, a sugar alcohol or anything in between. But what I’m looking for this year is, instead of alternative sweeteners, alternatives to sweetness. These flavors are still going to be bold and activating taste buds. People are getting used to these things, especially with the expansion of global products and global flavors. Their taste buds are adapting and they’re not just going to be looking for sweet anymore. A lot of the big food companies think that with more people taking GLP-1 (glucagon-like peptide-1) drugs, they won’t be craving sweetened foods as much, so [formulators and consumers] are looking for different flavors in that regard as well.