Dive Brief:

• Sprouts Farmers Market is working with beverage creator L.A. Libations to roll out a series of rotating drink displays at select stores in California, the grocer recently announced. 
• The pilot’s “emerging brands,” which include tea brewed with māmaki, meal replacement drinks, infused water and better-for-you milkshakes, are a part of L.A. Libation’s SoCal Incubation Program. Fifty Sprouts stores across the Golden State will launch the pilot on Jan. 1. 
• Sprouts said the partnership allows the natural retailer to test the latest trends in an effort to meet growing consumer demand for plant-based, ready-to-drink and ketogenic- and paleo-friendly beverage options. 

Dive Insight:

Shoppers at the 50 California stores taking part in the pilot can expect a selection between seven to eight drinks to appear in new displays near the checkout stations. The displays will get refreshed with new products three times a year, according to the announcement.

Sprouts is using California-based Relentless Trade Solutions to merchandise the drinks, track product performance and manage in-store brand development for the pilot, noting that if a brand meets “predetermined performance metrics” after three months, it may be considered for regional or national rollout. 

In the announcement, Sprouts unveiled the first seven drinks that will launch at the start of the year. They include:

• Don’t Quit!, a line of meal replacement drinks
• MoreLabs, a line of “functional shots”
• Shaka Tea, a tea brewed with the Hawaiian "superleaf" māmaki and sweetened with monkfruit 
• Space Shake, a milkshake brand that is keto- and paleo-friendly, vegan, low carb, certified, gluten-free, dairy-free, certified organic and without added sugar
• Arya, a line of curcumin-infused sparkling waters
• Hawaii Volcanic, sustainably-sourced premium still and sparkling water from Hawaii’s Big Island
• Szent, a “pure” water 

Executives noted that the program helps Sprouts track the latest innovations in a fast-evolving category. Functional beverages, which had been a predicted trend for 2020, are getting an extra boost of interest from the novel coronavirus pandemic as shopper interest in healthy living increases. 

Looking ahead to next year, several grocers have predicted continuing consumer interest in healthy options, including drinks. For example, Kroger is expecting zero-calorie soft drinks to gain popularity in 2021, while The Fresh Market is predicting that "gut-healthy" tonics and bubbly drinks with prebiotics and minerals will take off. 

Sprouts aims to reach a more targeted group of health-minded shoppers as it eyes mounting competition and shifting consumer demands. During the pandemic, the grocer has experimented with prepackaging products like salad ingredients, olives and bulk goods; swapped out its print advertising for online marketing; and worked on building smaller stores. The grocer has also increased its produce and, in the second quarter, saw sales of organic fruits and vegetables grow.