LAS VEGAS — The financial impact of COVID-19 has done little to curb interest in functional beverages, but it has made consumers more hesitant to invest in premium drinks like kombucha and enhanced water.
COVID-19 hit Generation Z the hardest in terms of losing jobs, said Lynn Dornblaser, director, innovation and insight for Mintel.
“This generational group, it’s hard to see clearly exactly what they will be like in another three, four, five years because right now they are struggling to pay the bills,” she said in an Oct. 26 session at SupplySide West in Las Vegas.
Yet Mintel research showed Gen Z, or US consumers of the ages 18 to 26, desire functional beverages. When Mintel asked consumers what drinks they had consumed or were interested in, enhanced water was the most popular category, with 74% of millennials and 65% of Gen Z expressing interest. Millennials and Gen Z tied for first among age groups in kombucha at 51%. Gen Z, at 57%, led in functional coffee with millennials following at 55%.
Mintel also asked US consumers what factors had become more important or less important in deciding on food and beverage purchases due to COVID-19. Forty-three percent said low prices had become more important, and 19% said they had become less important. Ethical practices came in at 15% more important and 16% less important. When asked about health attributes that had become more important and less important due to COVID-19, high in protein came in at 33% more important and 14% less important. The percentages for organic were 21% more important and 23% less important.
“Certainly, we do see growth in organics, but keep in mind, especially these days, with so many consumers having to be careful on what they purchase and what they spend their money on, organics for some consumers continue to be unaffordable,” Ms. Dornblaser said. “What you see is consumers looking at the next best alternative. If they can’t afford organics, they’ll go for something that talks about being all natural. In their minds, it’s close.”
She added of organic and sustainable concerns, “those are important to consumers, absolutely. I don’t mean to downplay them, but to appeal to that mainstream consumer, you’ve got to nail that consumer confidence and a price that makes sense. Otherwise, consumers won’t buy the product. It’s as simple as that.”
More than 40% of consumers in a Mintel survey said a coupon for free samples would encourage them to try a new functional drink.
“They want to make sure it tastes good before they invest their money,” Ms. Dornblaser said of consumers.