With beverage performance in the keto space on the rise, we explore brand innovations across four keto beverage categories
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KerryDigest Fast Facts:
- As the ketogenic diet trend grows, there are new opportunities in the market, such as the adoption of keto beverages.
- Beverages in the keto category have overlap with other trends, such as better-for-you and functional beverages, which may result in a larger market size.
- We’ve identified four beverage applications that align with keto and are already experiencing innovation.
KerryDigest Full Scoop:
The keto market continues to grow as more consumers adopt the high-fat, low-carb ketogenic diet. Projections value the keto market as having a CAGR of 5.5% and reaching US$15.64b by 2027, according to a previous KerryDigest article on the keto trend. Many consumers are familiar with keto-friendly foods like pork rinds, nut butters and MCT oil, and these projections indicate there is still plenty of room for innovation, including keto beverages.
The emerging keto beverage trend is happening parallel to, and sometimes in overlap with, the trend for better-for-you beverages with functional benefits. Many clean label and health halo trends also align with keto, such as reduced or no sugar, carb limiting and healthy fats. To help brands plan, we break down how different beverage categories are performing in the keto market and where there is opportunity for innovation.
Nutritional keto beverages
Keto is taking center stage as more meal replacements and other nutritional beverages cater to the keto diet. According to Mintel GNPD data, keto-friendly drinks have continued to rise over the past few years and more consumers have become interested in the diet.
Some brands, like SlimFast™, have introduced a keto-friendly range of meal replacement shakes, coffee creamers and more, which call out keto on the packaging. Others call out easy-to-understand macronutrients, or macros, which is shorthand for the protein, fat and carb content of food and beverages. Macros are tracked as part of the keto diet to help users stay in ketosis and keep burning fat.
Key opportunity: Calling out “keto” or “keto-friendly” on the product label is a simple way for brands to make keto products more recognizable to consumers. We also suggest highlighting macros and adding paleo and keto-adjacent claims such as “reduced sugar” or “grass-fed” as a means to pull in keto consumers.
Alcoholic keto beverages
In the alcoholic beverage space, at least one already-popular beverage fits the bill for keto consumers. Hard seltzers meet the consumer demand for better-for-you beverages without losing ABV or flavor. White Claw™, for example, has a 70-calorie version of their seltzer that aligns with the keto diet as an alternative to beer. Between 2018 and 2019, the category grew 212% in the U.S., according to Nielsen data.
Key opportunity: Brands looking to create alcoholic keto beverages should consider offering lower-calorie versions of their products and aligning with other health halo claims, such as reduced sugar.
Tea, coffee and cocoa keto beverages
A crucial part of the keto diet is fueling the body with fat. “Bulletproof coffee”—coffee blended with grass-fed, unsalted butter and MCT oil—is a popular drink within the keto community. While Mintel found there’s a lack of interest in added functionality in roasted coffee, ready-to-drink (RTD) coffee with functional benefits resonates more with consumers. For example, the Bulletproof™ brand has RTD cold brew lattes that call out keto on-pack. The success of products like RTD Bulletproof coffee shows there is opportunity to innovate with keto-friendly beverages in the coffee space.
Key opportunity: RTD coffee with functional benefits can resonate with consumers and compete in the afternoon daypart as a pick-me-up with added functionality.
Refreshing keto beverages
Oils such as coconut oil and MCT have a growing presence in soft drinks as consumers perceive the potential benefits of healthy fats, according to Mintel. While MCTs are commonly found in nutritional beverages and meal replacement shakes, they’ve also been spotted in sports drinks and even flavored water. The consumer adoption of healthy fats in beverages provides an opportunity for other sub-categories to reach keto consumers, such as carbonated soft drinks.
Key opportunity: Adding healthy fats like olive oil and coconut oil to soft drinks and flavored water can appeal to keto beverage consumers. Pairing fats with new and exciting flavors or functional benefits may also resonate.