Question 1

What are functional beverages?

Accepted Answer

Functional beverages are drinks that provide health benefits beyond basic nutrition, often marketed as performance enhancers rather than mere refreshments. These include energy drinks, enhanced waters, and wellness-focused products that appeal to health-conscious consumers seeking alternatives to traditional sugary drinks.

Question 2

Why did Coca-Cola stop making Minute Maid frozen juice?

Accepted Answer

After 80 years, Coca-Cola discontinued Minute Maid frozen juice concentrates due to declining sales as consumers abandoned the ritual of mixing concentrates at home. Modern consumers prefer convenience, health benefits, and transparency about ingredients, driving the shift away from traditional frozen juice products.

Question 3

What is premiumisation in beverages?

Accepted Answer

Premiumisation refers to the trend where consumers increasingly purchase higher-priced, health-focused beverages over traditional options. This shift spans across income levels and age groups, with functional beverages commanding premium pricing that often compensates for higher ingredient costs.

Question 4

Should I invest in beverage stocks now?

Accepted Answer

The beverage industry transformation creates distinct winners and losers, with companies adapting to functional beverage trends potentially commanding premium valuations. However, regulatory changes, market saturation, and economic downturns pose risks, particularly for premium-priced products during recessionary periods.

Question 5

Best beverage stocks for beginners?

Accepted Answer

Companies like Celsius Holdings (CELH), Monster Beverage (MNST), and National Beverage Corp (FIZZ) represent different approaches to functional beverages. These stocks offer exposure to growing market segments, though beginners should consider their risk tolerance and the cyclical nature of consumer preferences.

Question 6

Do functional beverages have better profit margins?

Accepted Answer

Yes, functional beverages typically offer superior profit margins compared to traditional sodas. Premium pricing for health-focused products more than compensates for higher ingredient costs, making leading functional beverage companies particularly attractive from an investment perspective.

Question 7

Risks of investing in beverage stocks?

Accepted Answer

Key risks include regulatory changes affecting functional beverage marketing claims, market saturation making differentiation difficult, and economic downturns pressuring premium-priced products. Additionally, brand loyalty in beverages can erode quickly if consumers perceive better alternatives.

Question 8

Is the shift to healthy drinks permanent?

Accepted Answer

Consumer behaviour data suggests the shift toward healthier beverages is permanent rather than cyclical. Health-conscious consumption patterns are spreading across income levels and age groups, creating sustained competitive advantages for companies positioned in growing categories whilst penalising those in declining segments.

Question 9

Why are energy drinks growing so fast?

Accepted Answer

Energy drinks have demonstrated remarkable resilience as consumers view them as essential for daily performance rather than luxury purchases. Companies like Monster Beverage have systematically expanded beyond core demographics and built significant distribution partnerships, creating barriers to entry for competitors.

Question 10

Will sparkling water demand continue?

Accepted Answer

Sparkling water has shown surprising staying power as consumers seek alternatives to traditional sodas and artificially sweetened diet drinks. Brands like LaCroix succeeded by satisfying demand for flavourful beverages without artificial additives, reflecting sophisticated consumer preferences for ingredient transparency.

Question 11

How much does it cost to invest in beverage stocks on Nemo?

Accepted Answer

Nemo offers commission-free investing in beverage stocks with fractional shares starting from just £1. The ADGM-regulated platform provides AI-driven research and access to companies like Celsius, Monster Beverage, and National Beverage Corp through the Beverage Stocks portfolio.

Beverage Stocks: What's Next After Coca-Cola's Pivot

Beverage Stocks: What's Next After Coca-Cola's Pivot

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Summary

A Chilly End for Frozen Juice, A Fresh Start for Investors?

The New Thirst Traps

Not Just for Teenagers Anymore

So, Where Could the Money Be?

Deep Dive

Market & Opportunity

Key Companies

Primary Risk Factors

Growth Catalysts

How to invest in this opportunity

Frequently Asked Questions

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