Global measurement and data analytics company Nielsen has released its top trends of 2018. Here is a synopsis of their research for the organic, beer and non-alcoholic beverage sectors.
Sales of organic foods in the U.S. fast-moving consumer goods (FMCG) industry haven’t waned, and appears to be a growth driver that’s here to stay.
Nielsen reports that organic sales continue to outpace previous years, and now account for more than $21 billion in sales and are up nearly nine per cent in dollars and eight per cent in units. Nielsen says this growth is “huge” because overall, the FMCG industry has experienced flat volume consumption.
Although organic products are being purchased more by all generations and age groups, some segments are leaning towards organic in greater numbers. Nielsen reports that Millennials are spending 14 per cent more on organic products this year compared to last, and Hispanic consumers lead other ethnic groups, spending over 13 per cent more on organic products compared to a year ago.
Nielsen says it’s important to note that it’s not just food products seeing lift from organic claims; consumers are mindful of the ingredients, manufacturing processes and attributes of non-food purchases as well. Organic health and beauty care, baby care and alcohol have seen double-digit growth.
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Top Growing Beer Categories
Nielsen reports that in-store dollar sales for beer decreased 0.1 per cent from 2017. Challenges faced by the U.S. beer market included fragmentation, increased competition, and shifting consumer preferences.
Nielsen says despite the continued deceleration that has occurred over the past five years, many of the sub-categories within the total beer category have been able to post notable sales gains in the off-premise channel (retail sales). Hard seltzer was the “breakout star” for the total market in 2018, with triple-digit growth and reaching more than one per cent category share. The market in this analysis included beer, flavoured malt beverages and ciders.
For the first time in three years, Nielsen reports that the U.S. cider market posted off-premise sales growth. The craft beer category experienced a decline in dollar sales, growth occurred within select styles. According to Nielsen, India Pale Ales (IPAs) grew sales the most out of any style in 2018, with the juicy/hazy craze helping to drive the largest craft style.
Within the U.S. on-premise channel (i.e., bars, restaurants, etc.),tracked by Nielsen CGA, it was found that volume sales of beer declined 1.8 per cent from 2017. A large driver of this decline was from the domestic premium segment, which experienced a sales volume decline of 5.9 per cent.
Despite the lackluster trends across the entire beer category in the on-premise channel, there were pockets of growth, just as we identified in the off-premise channel. The import beer sub-segment, for example, experienced a strong year, posting 3.4% volume growth in U.S. bars and restaurants. Mexican beer brands were strong contributors of this growth, posting volume sales growth of 8.0%. IPAs were the top-selling beer style across the on-premise channel, with a slight volume growth of 1.0%, which was driven by a 1.6% average price increase.
More insights on beer and purchasing can be found here.
Non-alcoholic beverage innovation
Nielsen research shows that U.S. consumers “have a great thirst for trying new and exciting” non-alcoholic beverage products. Consequently, manufacturers have been innovative in their offerings and Nielsen reports that In 2018, $5.8 billion in sales from the $56 billion beverage category came from new products (new product launches, brand extensions and new flavor offerings), accounting for 10 per cent of this year’s total category.
Staple categories such as water, milk and tea were reinvigorated. Sales in the sparkling water category increased 17 per cent from last year, primarily attributed to new companies and new flavour offerings into the market. Alternative “milk” beverages such as almond and oat milk were main drivers in the milk category. The tea market was bolstered by new offerings of kombucha.
Water sales increased by six per cent over the past year, pushing total sales to more than $16.1 billion, according to Nielsen. Bubbles were a “top innovation characteristic” in 2018. Nielsen reports that 71 per cent of new items to the category were sparkling waters, followed by water items with “calorie free” claims.
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