Beverage Market Is Flush With Functional Drinks

Consumers can find products for almost every complaint and need.

January 21, 2020

ALEXANDRIA, Va.—Beverage makers are increasingly adding ingredients that provide a specific function to their drinks, and consumers are using them to help them achieve personal lifestyle goals, reports BevIndustry.com.

“Health and wellness, hyper-personalization, premiumization and experience culture are driving beverage innovation,” says Holly McHugh, marketing associate for Niles, Illinois-based Imbibe. “Consumers have easy access to information online and can gather personal health data through technologies like FitBit and at-home wellness tests. As a result, consumers are frequently adapting their diets and choosing products that help them achieve personal lifestyle goals.”

“Premiumization has played an important role in communicating value and justifying a higher price tag,” McHugh said, noting that the beverage market has become flush with options. “Beverages that deliver key nutrients, energy drinks and digestive health products continue to be popular with consumers. Mood-boosting and relaxation beverages are expected to experience significant growth, as well in the next few years.”

Caleb Bryant, associate director of food and drink for Chicago-based Mintel, also highlights which functionalities are on the rise and what’s declining. According to Mintel’s Global New Products Database, functional brain health is the fastest-growing claim in all U.S. beverages when comparing claims from 2015 to 2019. Stress and sleep claims have also grown, he said.

“The next generation of functional beverages will include ingredient combinations that address multiple need states or several harmonizing ingredients that help consumers fulfill a specific goal,” said McHugh.

McHugh predicts that the functional beverage market will continue to grow in the year ahead, although prognosticating the next trend that evolves from a fad to a staple beverage segment remains a challenge.

“Consumer needs are a moving target, which has made it very hard for brands to pinpoint what will be successful and experience growth for years to come,” she said.

As new products are developed, Beverage makers are turning to trusted sources to help them formulate the next great innovation.

“Caffeine is still king when it comes to energy claims, but many companies are calling out their use of L-theanine due to the amino acid’s sustained energy benefits and cognitive benefits,” said Bryant. “Consumers want the boost from energy drinks but not the associated crash, which is why there has been an uptick in the use of L-theanine in beverages.”

Energy functionality also has been an attribute association for cognitive health. Consumers seeking attributes, such as memory, mood and even processing speed, have resulted in beverage makers turning to an emerging set of ingredients to fulfill these demands. Beverage makers are also utilizing staple ingredients associated with relaxation benefits, as well as more novel ingredients, such as kava roots to support a relaxed state of mind and offers natural stress relief and mental clarity.

“Familiar ingredients like chamomile, green tea and lavender, as well as novel ingredients like adaptogens and cannabidiol (CBD), are popular ingredients in beverages that improve mood and relaxation,” said McHugh.

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