4 Post-Pandemic Opportunities for UK Beverage Manufacturers

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The last 19 months have supercharged some of the food & beverage trends we saw pre-pandemic, offering new opportunities for challenger brands in the beverage sector.

Consumer concern with health and wellness has had a massive boost – 68% of consumers say the pandemic has made them more concerned about their health and wellbeing – especially their immunity.

And we’re seeing much more interest in whether food and drink is ethically sourced and sustainably produced: 69% of UK consumers now say this is important to them.

For beverage manufacturers the question is: How do these trends translate into business opportunities? And how do you manage your beverage business as you adapt?

To give you some food (and drink) for thought, I’ve put together a list of what I believe are the biggest post-pandemic opportunities for the beverage industry. They’re based partly on the new market conditions that we’re seeing – and partly on conversations with our many beverage clients at Unleashed.

Let’s take a look:

1. Kombucha: New and adventurous flavours

Kombucha’s been around for centuries, but it’s never been seen in some of its current guises.

Kombucha is lower in sugar and calories than traditional fizzy drinks, and contains probiotics – all factors appealing to a health-conscious public, especially since awareness of links between gut health and immunity is also increasing.

It makes sense then that kombucha is one of the fastest-growing industries in the beverages sector, and that it’s tipped to continue growing rapidly at a CAGR of 22.21% until 2028.

Post-pandemic consumers are keen to try exotic and adventurous kombucha options – from pan-roasted Dragonwell tea to mixed citrus and elderflower – and they’re willing to shell out more for these.

Flavoured kombucha can also be consumed as an alcoholic drink, either in a cocktail, or in the form of hard kombucha that’s fermented to include alcohol. That gives kombucha a real breadth of appeal across different drinks categories and is part of why this particular drink is likely to continue growing in popularity.

2. No- or low-alcohol spirits: Aim for high quality and authentic products

With more UK consumers drinking less alcohol for health reasons the NOLO (no- or low- alcohol) market is fizzing. The onset of Covid-19 saw sales of non-alcoholic beer in the UK increase by 58% from 2019 to 2020. By contrast, in the same period sales of some of the more well-known alcoholic beer brands dipped.

The NOLO market is expected to continue growing at pace and in particular it’s no- and low-alcohol spirits that are predicted to be the big winners, with volume CAGR forecast to be around 14% until 2024.

Again, consumers are keen for novel flavours and options in this category, like so-called ‘dark spirits’ – alcohol-free alternatives to spirits like whiskey or rum – that are coming into the market.

Ultimately though it’s most important you produce a high-quality alternative – brands that have an authentic taste and are visually appealing will be successful in this space.

3. Craft beer: Align with your customers’ values and go local

With hospitality and retail reopening customers are looking to treat themselves with high-quality food and drink – the kind that artisanal craft brewers can offer. And again, consumers are happy to pay more for these products.

Data from five weeks of outdoor trading in 2021 shows world lager and premium 4% lager – the categories craft beers usually fall into – accounted for 34.6% of the volume of beer sold, up from 23.8% in 2019. In the same periods, sales of standard lager dropped by 4.5%. After the easing of restrictions this year some pubs even ran out of craft beers.

Post-Covid, consumers are also increasingly looking to support independent and local business, so think about how you foster connections with your community – whether it’s through your local pub, your own taproom or direct-to-customer sales.

Another advantage craft beers have is that they can align themselves with consumer values like social responsibility and sustainability without having to reinvent themselves. Telling the story of your brand will help your customers understand how your business operates – from who your brewery’s founder is and where your ingredients are sourced, to the processes you use.

4. Plant-based drinks: Find your niche and explore a range of sales channels

A quarter of adults in the UK say that vegan or plant-based food and drinks are more appealing to them due to Covid-19 – which makes sense given the greater focus on health and sustainability in the marketplace right now. In 2020 32% of Britons drank plant-based milks, up from 25% in 2019, and the total spend on non-dairy alternatives was up £100m.

Non-dairy milks are not new, but businesses are testing new ingredients – like barley, hemp and peas – and refining products to improve taste, texture and nutritional value.

And there are still unexplored niches in the market – one customer of ours, Minor Figures, is a good example. They started out making ready-to-drink specialty coffee with dairy milk then switched to using oat milk in 2017, and consumers loved it. A key point is that they weren’t trying to replicate dairy, but instead developed an oat milk that heroes the coffee.

Another approach that Minor Figures has taken is exploring a range of channels. They sell to cafes, but also through supermarkets, instore and online – and also sell directly from their website.

In any case it looks like non-dairy milks are here to stay. They could even end up taking the biggest share of the milk category.

Beverage innovation and inventory software

It’s not easy to create and produce innovative products while keeping track of suppliers and expenses – especially if your business is scaling.

This is where our inventory software really comes into its own. We have a lot of beverage industry customers and often hear from them that Unleashed is reliable, easy to use and scalable. It gives you an accurate system for recording bills of materials and the cost of raw ingredients for each product, giving you full visibility over your margins.

It’s a system that’s really suited to the post-Covid climate, allowing you to adapt to new consumer tastes and shopping habits quickly without your job becoming a nightmare of spreadsheets. And if you’re diversifying your sales channels, then centralised inventory software is a must-have.

Finally, if you’re using locally sourced, vegan or sustainable ingredients, Unleashed allows for full traceability – which is good not only for your sake, but also because consumers are keener than ever to check that products are safe, healthy and environmentally friendly.

Learn more about how businesses in food & beverage use Unleashed here.

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Stephen Jones - Unleashed Software
Stephen Jones

Stephen Jones is the UK manager for Unleashed Software and has been with the cloud software firm for more than 6 years. He has a passion for championing UK businesses – and helping them grow with the right solutions.

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