Beverage companies are stepping up their game with unique flavorings and novel health benefits.

There’s a wave of innovation in the beverage sphere, and the best new products were on display at the Summer Fancy Food Show hosted by the Specialty Food Association. The Innovation Group attended to report on the following trends.

Carbonated health

Soda is out, and everything else is in. Over the past decade, Americans have given up bottled soda: Sales fell more than 25% over the past 20 years. Meanwhile, soda waters have enjoyed a renaissance. Vox points out the case of LaCroix, a flavored sparkling water from Wisconsin that tapped this rising trend for a huge boost in sales.

But what’s good news for health-conscious consumers is not as good for beverage brands. Today’s non-alcoholic drink market is more crowded than ever. As a result, soft drink makers are experimenting with new ways to stand out, including innovative flavors and health benefits.

New launches include Sparkling Bitters, which flavors its sparkling waters with cocktail bitters. In addition to their unique flavor profile, the bitters also promise digestive health benefits. According to the website, the drink does everything from relieving heartburn to stimulating enzyme production. Another new addition to the market was a sparkling drinking vinegar created by Kombucha company Live Beverages. The vinegars are infused with prebiotic fibers, a compliment to kombucha’s probiotics.

“As you look at the kombucha category right now, you do have to differentiate yourself a little bit,” Duane Primozich, managing partner at Boulder Investment Group, a Live Beverages investor, told BevNET. “It does take a lot to do it well and scale it. But as you think about early days, you do want to have some distinct differentiation, and Live soda does have that.”

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Sparkling Bitters

Ancestral teas

Companies looking for the next wave of caffeinated beverages are turning to an ingredient in their own backyards: Yaupon. Once enjoyed by Native Americans, yaupon tea contains powerful antioxidants and is a natural source of caffeine. A cousin of yerba mate and guayasa, yaupon is North America’s only known plant that contains caffeine.

“Every time I ran into a yerba mate drinker, I gave them this and they always preferred it,” said Lou Thomann, founder of Asi Tea, in an interview with Beverage Daily. Asi Tea, one of the food show’s newest products and the first ready-to-drink yaupon tea, is based on ancient recipes with modern brewing techniques. The company hopes to inspire other growers to explore native ingredients with other American superfoods like the aronia berry, paw-paw fruit, and American ginseng.

Ancestral eating is evolving beyond the Paleo diet as beverage makers seek new flavors, unique ingredients and sustainable production. For the background behind this trend, see our Food + Drink trend report.

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Asi Tea

Super waters

One of the most buzzed-about products on display was birch water. Companies like Säpp are touting the water made with birch tree sap as the next organic super-drink. Made with birch tree sap, birch water has a light sweetness and a range of nutritional benefits from proteins to  vitamins and minerals. The company also makes two herbal infusions—nettle and rosehip—that expand on its health proposition.

Since coconut water exploded, the door has opened for other water alternatives. “The functional water category is among the fastest growing trends within the beverage space,” a representative from Säpp told The Innovation Group. “We believe the size of the pie is growing – we see customers switching over from coconut water, sugary cold-pressed juices, using birch water to supplement their daily hydration, and also from a lot of the ‘infused waters’ when they see birch water is made by forests, not formulas.”

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Sapp Birch Water