The organic beverages market is an expanding sector that meets the growing demand for natural and healthy beverages. Organic beverages are made from high-quality ingredients that have not been treated with synthetic fertilizers, pesticides, or herbicides. These organic beverages are divided into two types- alcoholic and non-alcoholic. Organic wine, beer, and spirits are examples of alcoholic organic drinks. Organic non-alcoholic beverages include juices, tea, coffee, and organic energy drinks.
Organic beer is one of the most popular in the organic alcoholic beverages segment. It is created using organic barley, hops, and yeast that have not been treated with synthetic chemicals. Organic wine is also popular among customers who want natural and healthy beverages. It is prepared with organic grapes farmed without the use of pesticides or herbicides.
On the other hand, organic juice is a common beverage in non-alcoholic organic beverage segment. It is created using organic fruits and vegetables that have not been treated with synthetic chemicals. Organic tea and coffee are also becoming more popular as people grow more health-conscious and seek natural and healthful alternatives to standard tea and coffee.
Key Drivers of the Organic Beverages Market
Growing Trend of Healthy Food and Beverages
Consumers are becoming more health-conscious, and they are looking for natural and nutritious alternatives to common beverages. Organic drinks are thought to be healthier since they are created with high-quality, organic ingredients cultivated without the use of synthetic chemicals. Organic green tea, for instance, is known to contain antioxidants that can increase immunity and help prevent illness. Hence, market players are including new organic tea products in their portfolio. For instance, in October 2022, Hrbvor, a new herbal iced tea brand, introduced a variety of still and sparkling teas blended with organic herbs and offered functional advantages. The teas are aimed at wellness-conscious families looking for better drinking options. The phytonutrients in Hrbvor's teas have been scientifically confirmed to be antioxidant, anti-inflammatory, and immune-boosting. There are three flavors in the line- REVIVE, CALM, and FOCUS, each having a distinct combination of organic herbs to assist different needs including post-workout recovery, relaxation, and mental concentration.
Growing Offline and Online Distribution Channels
The rising availability of organic beverages is also driving the sector. Organic beverages are becoming more readily available in supermarkets, health food stores, and internet sellers, increasing consumer accessibility. This has also boosted manufacturer competition, resulting in a wider variety of organic beverages with diverse flavors and ingredients. Companies are also broadening their market reach by partnering with a variety of online and offline merchants. For instance, in June 2022, ROAR® Organic expanded its distribution by announcing that its four core flavors of Complete Hydration™ beverages will be available at most Whole Foods Market locations across the US. These drinks provide a delicious and healthy way to stay hydrated as they contain a blend of vitamins, antioxidants, and electrolytes. The flavors available include Cucumber Watermelon, Georgia Peach, Mango Clementine, and Blueberry Acai.
Initiatives Promoting Sustainable and Organic Farming
The government's initiatives to promote organic farming and sustainable agriculture practices are also driving the market's growth. For example, the US Department of Agriculture (USDA) established rules for organic agriculture processes and certifies organic products that meet these requirements. This has enhanced customer trust in organic products, which has resulted in an increase in demand for organic beverages. The organic sector also petitioned Congress to create the Organic Foods Production Act (OFPA), which defined the term "organic."
Besides, government is also making several investments to prompt farmers for organic farming. For instance, the Italian government has set a target of converting 25% of the country's agricultural land to organic farming by 2027. This ambitious goal will be backed up by more than €3 billion ($3.3 billion) in funding from a variety of sources, including the country's strategic plan for the Common Agricultural Policy, the recovery and resilience plan, and the recently enacted organic agricultural law. The effort is intended to have a substantial influence on the agricultural sector of the country and to encourage sustainable farming techniques. Additionally, in August 2022, the United States Department of Agriculture (USDA) announced an investment of up to $300 million in the Organic Transition Initiative, with the goal of increasing revenue streams for farmers and producers.
Expansions and Innovations by Major Market Players
The organic beverages market has significant contributors such as Drake’s Organic Spirits, The Hain Celestial Group, Inc., Nestlé S.A, The Good Life Company (TGL Co.), Uncle Matt’s Organic Inc., among others. These players assist in the market’s growth with the launch of new products and through collaborations and investments. Some of the recent developments in the market include-
• In February 2023, ROAR® Organic announced a $6 million capital investment from current shareholders and plans to increase distribution by entering over 1,300 Publix Super Markets with its famous Complete Hydration drinks. These beverages contain a combination of vitamins, antioxidants, and electrolytes and come in a variety of flavors including Cucumber Watermelon, Mango Clementine, and Georgia Peach.
• In January 2023, Califia Farms, a well-known company recognized for high-quality plant-based drinks, expanded its dairy-free product line. Its new Organic Oatmilk and Almondmilk have only three ingredients- purified water, sea salt, and oats or almonds. These beverages were created with consumers in mind who want choices with fewer ingredients and at a lower price point in mind. They are currently sold at various locations in the US, including Kroger Co., Whole Foods Market, and Sprouts Farmers Market.
• In June 2022, Systm Foods purchased Chameleon Organic Coffee from Nestlé USA. Chameleon Organic Coffee's product line includes single-serve packaged beverages as well as multi-serve concentrates.
• In March 2022, Anheuser-Busch InBev launched a new range of hard seltzers mixed with coconut water under the Michelob Ultra brand. This line has four flavors- Blueberry Watermelon, Berry Hibiscus, Strawberry Guava, and Kiwi Lime.
• In January 2022, Drake's Organic Spirits released a new BOXTAIL flavor, Drake's Perfect Margarita BOXTAIL. It joins Drake's RTD cocktail lineup, which includes the Watermelon-Tini, Mango Punch, Minted Mojito, and Black Cherry Limeade.