Inside three hot emerging CPG categories: probiotics, cold-brew coffee and cannabis

Innovation is the lifeblood of CPG, but large CPG companies rarely create entirely new product categories from nothing. Instead, recent innovation has come mostly from small companies, which have created new categories and market segments that have larger CPG companies playing catch-up, from Greek yogurt (Chobani) to coconut water (Vita Coco).

This trend is looking to hold true with three new categories shaking up the CPG world: probiotics, cold-brew coffee and cannabis.

Probiotic Foods

Today’s probiotic foods go way beyond yogurt and supplements, taking probiotic’s benefits in a more versatile and flavorful direction, thanks to rising consumer awareness of gut health.

Sales of probiotic supplements, which are marketed to benefit digestion, energy and immunity, are growing at 18% per year in the United States.1 The overall probiotic market is projected to grow by 6% annually and reach $39 billion globally by 2019. However, nearly 80% of this market is dairy-based, meaning significant opportunity is being left on the table.2

In fact, sales of niche probiotic foods such as chocolates, ice cream and baked goods are expected to grow faster than the traditional dairy segment.3

This growth is fueled by a larger public appreciation of the once-lowly gut, along with a growing general health consciousness and an aging Baby Boomer population.

Brands to Watch

Post-owned Attune also focuses on making probiotics taste good, with its probiotic chocolate bars in flavors like mint, dark chocolate and one with crunchy cereal pieces. The Oregon-based company also makes granola, cereal and other snacks and is working toward 100% organic and non-GMO products by the end of 2016, which will help it tap into a growing group of consumers increasingly concerned with their food’s origins. Attune’s products are sold in natural food stores and specialty grocers nationwide.


Among a growing group of kombucha tea brands, Health-Ade stands out because it is fermented in small batches, leading to a lower sugar content than many larger brands. Its seasonal offerings like pink lady apple and plum are also especially popular and use fresh, local, cold-pressed fruit. Health-Ade is on shelves at over 150 markets nationwide and is also sold at CrossFit gyms—a key influencer channel.

Cultured and Saucy.

This brand claims to be the first probiotic condiment, and with everything from herbs de Provence, citrus ginger curry and lemon garlic dill mustard, it’s likely the most diverse. Less than six months after premiering their product at their hometown Santa Barbara Fermentation Festival, it was already on many local store shelves, including Whole Foods.

Even mega tortilla manufacturer Mission is getting in on the action with its digestive health tortillas.

Cold-Brew Coffee

Cold-brew coffee hits several popular trends at once: It’s convenient yet feels homemade and customizable, making it a hit among Millennials looking for more sophisticated, easy, customized coffee options.

The drink is smoother—thanks to brewing methods that keep acid in check—and is more caffeinated than traditional coffee.4

Plus, it’s multifunctional: Cold-brew coffee concentrate can be used as a cocktail mixer, in baked goods and even as a meat marinade.5

In fact, 67% of Millennials and post-Millennials turn to coffee over energy drinks when looking for a jolt, with 43% choosing cold-brew coffee.6 The ready-to-drink coffee category will hit $2.4 billion by 2018, and much of that growth will be driven by cold-brew.7

So it’s no surprise that even Starbucks is getting in on the cold-brew game. The mega coffee brand launched cold-brew this spring at 2,800 stores in the Northeast, Mid-Atlantic and Midwest following successful tests in Boston and San Francisco.8

Brands to Watch
Secret Squirrel Cold Brew Coffee.

Secret Squirrel is actually no secret due to its impressive distribution— via Whole Foods and some independent grocers in 12 Western, Mountain and Southern states9 —and plans to grow to 1,000 stores by the end of 2015, including additional Whole Foods distribution as well as Vons/Safeway, Fresh & Easy and Sheetz.10 But Secret Squirrel’s distribution isn’t the only thing expanding—it recently announced the rollout of three new dairy-based cold-brew coffee beverages: caffe latte, Vietnamese latte and dark chocolate mocha. Future cold-brew offerings include a vegan latte and carbonated coffee drink.11

Califia Farms.

Califia is the fastest-growing natural beverage company,12 and its growth shows no signs of calming down, especially with the recent unveiling of its concentrated cold-brew coffee, which is expected to hit Whole Foods and Safeway shelves across the country this year.13 But Califia is also pushing the envelope with innovative flavors like iced coffee with almond milk, Mexican chocolate mocha and dirty chai.

Stumptown Coffee Roasters.

The brand started selling cold-brew coffee in its 10 cafés, taking advantage of a key consumer touchpoint missed by many of its competitors, and it quickly became so popular that the company started to bottle it.14 Its bottles are now available at regional Whole Foods locations and independent grocers.

Chameleon Cold-Brew Coffee.

Chameleon has already managed to make itself appear in roughly 1,500 stores in 30 states, thanks in part to its organic and fair-trade cred and custom glass bottles that keep its unique taste intact.15

Grady’s Cold Brew.

Grady’s appeals to DIY consumers who still crave convenience. The brand offers cold-brew concentrate as well as “bean bags”—like tea bags for cold-brew coffee. Its unique bean bags have landed on shelves at 300– 400 traditional grocery and retail channels (including Anthropologie, Bed Bath & Beyond and Urban Outfitters), while its concentrate has found a home at Whole Foods stores in the Southwest.16


The cannabis market is large and growing, but remains mostly primitive, ripe for a sophisticated, CPG-like experience far beyond consumers’ current expectations.

Legislative trends suggest that cannabis has the potential to develop into a huge consumer product category as legalization continues. Already generating $2.3 billion in direct and indirect legal sales,17 it’s projected to reach $20 to $30 billion by 2020.18

Smelling opportunity, dedicated non-bank financing providers, like Privateer Holdings, are flooding into the industry.

These investors have the ability to make a significant impact using basic retail and CPG tactics. In consumer product terms, the cannabis market today is primitive at best, creating a large market opportunity for sophisticated consumer marketing, not to mention product innovation.

Consumer cannabis products are still largely raw-plant based, or minimally processed, such as edibles, appealing to an existing enthusiast consumer base but not to a larger pool of potential casual consumers.

Additionally, there are currently no recognized standards or trusted brands of scale within the industry to communicate and educate would-be consumers.

Cannabis companies that will create a sustainable long-term advantage are the ones that will engage in sophisticated brand building by directly addressing consumer needs.

Strong brands will be influencers in the category and must gain consumer trust through education and by delivering a consistent, quality product.

Companies must establish a clear go-to-market niche by knowing their consumers and their needs and targeting messaging accordingly.

Finally, winning companies will let consumers drive product innovation, helping them move beyond raw-leaf and minimally processed derivatives and into marketable consumer products like pre-rolled and smokeless products, creams and lotions, and at-home baking mixes.

  1., 2014
  2., 2014
  3., 2013
  4. PRWeb, 2015
  5., 2015
  6. PRWeb, 2015
  7. Ibid.
  8., 2015
  10., 2015
  11. Ibid.
  12., 2015
  13. Ibid.
  15., 2015
  16., 2015
  17., 2014
  18. Ibid.