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In recent years, a massive selection of new drinks has popped up on the market, including a spate of alcoholic seltzers and a bunch of no-alcohol options. To discuss the state of beverages ahead of the long weekend, I convened a roundtable with our health and technology writers Amanda Mull, Ian Bogost, and Charlie Warzel.
But first, here are three new stories from The Atlantic.
Throwing Drinks at the Wall
Lora Kelley: Why are there so many drinks on the market right now?
Amanda Mull: Part of it is the economics of the drinks industry. There’s pretty low overhead relative to a lot of other food categories. One of the biggest costs is shipping, but everything else that goes into making a beverage—the ingredients, one of which is just water; the ability to find a manufacturer; the shelf life—is pretty favorable. So profit margins are better than in other areas of packaged food. It’s a friendly area to get into.
Also, in a lot of consumer categories, trying to switch someone from one product to another is a really expensive and difficult enterprise. But in beverages, you have a lot of people in a very large market who are open to and actively seeking new options.
Ian Bogost: The global nonalcoholic beverage market is worth hundreds of billions of dollars a year. If you can capture a very tiny fraction of this enormous market, it can be extremely lucrative.
Charlie Warzel: I read some Kantar market research that found that the number of “beverage occasions” has remained static, at about 35 a week, but the way that people are consuming their beverages is different, and what they want out of them is different. It seems there is a shift toward emotional experiences with beverages. People aren’t drinking beverages more frequently, necessarily, but how we’re doing it has changed.
I moved away from New York City in 2017. Going into a bodega in 2023 in New York City now, from a beverage standpoint, is a truly mind-blowing experience. It feels like being a kid at a toy store. I have so many different options—this one might soothe me; this one sort of tastes like a root-beer float.
Ian: The precursors to this situation we’re in are also worth mentioning. The rise of bottled water is, of course, huge—people shifted from thinking of hydration as drinking from a fountain to picking up water as a packaged good. And then there was the Starbucks-ification of coffee. The third thing is, the number of impulse-purchase opportunities has massively increased both in stores and everywhere else, including in places that wouldn’t have sold you a beverage in the past. And the fourth thing is just market segmentation and lifestyle marketing in general. Now you can feel you’re the kind of person who would try Charlie’s calming beverage or root-beer beverage or the CBD drink or whatever it is. You are marking identity with much greater willingness and self-consciousness than just having a brand affiliation.
Lora: Is this much variety good for consumers? For example, who would something like a nonalcoholic White Claw—which is said to be coming next year—be for?
Amanda: We’re in a period of a lot of brands, both established and upstarts, throwing things against the wall to see what sticks. When companies can detect changing habits among people, there is this real rush to figure out what products address those new desires.
Charlie: Throwing stuff at the wall may also be an attempt to capture a weird bit of cultural virality. When Liquid Death was first announced, it was this weird start-up water, but it became a very successful brand. You laugh at it, then you’re buying it. It would be truly unhinged to be walking around at work with a nonalcoholic White Claw. But maybe that will take off among a strange segment of consumers, or get popular on TikTok.
Ian: Brand value, and brand management, used to be much more conservative than it is today. It was unthinkable—even in the 1990s, when there were a lot of new drinks—for a brand with the recognition of White Claw to imagine undermining that by confusing the consumer about their value proposition. Instead, what a beverage company would have done is launch a different brand. For whatever reason, there’s now a willingness to experiment with brand properties. Social media is definitely a part of it.
As for whether this is good for consumers: It’s absolutely bad to have all of these packaged goods and all the plastic. But capitalism says that choice is always good for consumers. On the one hand, you’re like, Maybe there’s too much choice. But then you think about all the parts of the economy where you have almost no choice or no choice at all. If there was only one drink or three drinks, that would be worse.
Lora: To what extent have we reached peak beverage? Will the market keep growing?
Amanda: Generally, in consumer markets, when you see this quick expansion in the players and the products, you eventually do see a shakeout. There is stuff that just won’t work: It won’t be sustainable on a revenue basis; it won’t find a market; it won’t have a viral moment. So I think it will shake out eventually. I don’t know if we’re there yet.
I think there’s probably still room to grow, especially with growing interest in low-alcohol or no-alcohol drinks. And I think there’s probably room left in the athletic-hydration market, which expands out into the hangover market. Over the course of industrialized-beverage history, I don’t know if there’s ever been a period of real contraction. It just keeps growing.
Ian: I don't think there’s peak beverage. The universe expands.
Charlie: Look at the change in habits around drinking alcohol. There are people that are saying, “It’s very clear that alcohol is very bad for you; we should be drinking less.” But for many people, that means adding more things to their arsenal of drinking.
I keep Athletic Brewing IPAs in my fridge, and I also, on occasion, will have a regular IPA. Now I am buying two different things. In my own life, I see how my beverage universe has expanded just because I have a slight change in my own habits and preferences.
Lora: Before we go, what are you all drinking right now?
Amanda: I have a lemon-lime Liquid I.V. in like 35 ounces of water.
Ian: This is just coffee out of our office espresso machine.
Charlie: I don’t have it on me, but this summer, I discovered the Waterloo brand of seltzers, and it’s a revelation. It’s the beverage of the summer.
Ian: A year or two ago, I became a pure LaCroix drinker. I kind of burned through the flavored LaCroix, and now I’m almost exclusively a plain-seltzer drinker. It feels like getting back to basics.
Related:
Today’s News
- The August jobs report showed steady hiring and increased unemployment in the U.S.
- Russia has placed its new nuclear-weapons system, the Sarmat intercontinental ballistic missile, on combat duty.
- Hong Kong and Guangdong canceled flights and evacuated almost 800,000 people to prepare for the arrival of Typhoon Saola.
Dispatches
- The Books Briefing: Gal Beckerman asks: Could AI ever write like Stephen King and Margaret Atwood?
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Evening Read
The Supreme Court Justices Are Just Like Anyone Else
By Adriane Fugh-Berman
What do some Supreme Court justices and physicians have in common? Both take gifts from those who stand to profit from their decisions, and both mistakenly think they can’t be swayed by those gifts.
Gifts are not only tokens of regard; they are the grease and the glue that help maintain a relationship. That’s not always unhealthy, but it’s important to note that gifts create obligation. The indebtedness of the recipient to the giver is a social norm in all cultures, and a basic principle of human interaction—something the French sociologist Marcel Mauss wrote about in his classic essay The Gift.
This sense of reciprocity is subconscious and powerful, and doesn’t necessarily require a quid pro quo. In other words, a material gift need not be reciprocated as a material gift, but may be reciprocated in other ways, including a more favorable bent toward a company, a group, or a person.
More From The Atlantic
Culture Break
Read. These six books will make you feel less alone.
Watch. Meryl Streep is giving yet another killer performance in Season 3 of Only Murders in the Building (streaming on Hulu).
Isabel Fattal contributed to this newsletter.
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