September 9, 2024 – Many trends shape the functional beverage market around the world. These can include macro level trends, trends in functional beverage categories, and functional beverage product trends. Also, consumer trends help drive innovation in functional beverages.
Functional Beverages Offer Added Health Benefits
Functional beverages are drinks that offer extra health benefits in addition to hydration. Functional beverages mainly are found in the categories of sports nutrition, dairy and soft drinks. Sports nutrition functional beverages include ready-to-drink sports drinks that help replenish fluid, electrolytes, and energy, and also ready-to-drink sports protein drinks that have high levels of protein. Functional beverages in the dairy category include dairy alternative drinks like soy milk, oat milk, almond milk, coconut milk, and others, as well as drinking yogurts, fermented dairy drinks, flavored milk, and unflavored milk. Functional soft drinks can include flavored and unflavored bottled water, carbonated beverages, drink concentrates and mixes, energy drinks, fruit flavored drinks, iced coffee and tea, juices and nectars, and other types of soft drinks.
Consumer Trends Toward Healthy Living
According to consumer trends research, today’s consumer tries to live healthfully. Healthcare systems are under pressure from populations growing and growing older, so consumers have to take care of themselves and their personal health needs. A noticeable proportion of participants in recent consumer trends research say that healthy eating includes positive nutrition. Consumers also place value on functional ingredients and would pay more for ingredients that meet their health needs. This is seen especially in Asian consumer trends and Latin American consumer trends.
Spending on functional nutrition also is more prevalent in the Generation Z and Millennial age groups. Younger consumers look to reduce stress and increase relaxation. Older generations of consumers say they are interested in digestive health, bone health and healthy aging. Consumers purchase a lot of energy drinks and also are especially interested in functional nutrition products for heart health, brain health and aging well.
Energy Drinks are Growing Functional Beverage Trends
Functional beverage trend research shows that globally, growth in energy drinks is stronger than growth in sports drinks. North America is the top region for sales of energy drinks and sales of sports drinks. The region has the highest per capita consumption of energy drinks and sports drinks. China is the #2 market for energy drinks and Japan is the #2 market for sports drinks. Energy drinks and sports drinks show strong growth in Latin America and especially Brazil.
Dairy Drinks are Functional Beverages
Many dairy drinks are functional beverages. They are being produced by large global companies that market fortified dairy drinks, fortified non-dairy beverages, functional waters, and energy drinks. These companies are highly active in new product development and new product launches. Dairy beverages and dairy alternative drinks also are produced by smaller companies and start-ups who are looking to enter the market.
Functional Beverage Launches on the Rise
Launches of functional beverages are on the rise around the world and in nearly all global regions. Functional beverage trends show that soft drinks and dairy drinks each make up close to half of the new product launches while sports beverages account for the rest. Energy drinks are the leading soft drinks, and dairy alternatives stand out in dairy drinks. Fast-growing products in functional beverage trends include ready-to-drink sports beverages, functional carbonates, and functional iced coffee drinks.
Looking at regions, launches of functional beverages are most active in West Europe, followed by Asia and then North America. Launches of functional juices are highest in Europe while functional sodas and ready-to-drink teas are prominent in North America. Functional dairy drinks and dairy alternative drinks stand out in Asia and Latin America.
Protein and Energy Claims Stand Out
Health claims are common within functional beverage trends, with claims regarding high protein, energy and alertness, and vitamin/mineral fortified as the most prominent in launches. Energy and alertness, immunity, high/source of fiber, and brain health are growing. Particular claims are featured on certain functional beverage subcategories, including protein claims in dairy and non-dairy, and energy claims on ready-to-drink sports beverages. Immune health claims span across subcategories and are led by juices, yogurt drinks, and fermented drinks. Functional beverages also can carry sugar-reduction claims, plant-based claims, and sustainability claims.
Plant Proteins, Vitamins, and Adaptogens Grow
Use of plant-based proteins is growing in dairy drinks. In energy drinks, vitamin B12 and caffeine are leading ingredients and natural caffeine is growing. Vitamins and zinc are associated with immune health. In brain health, adaptogens and nootropics such as L-theanine, lion’s mane and ashwagandha are emerging.
Flavors are Evolving
Although strawberry and milk chocolate are the top flavors in product launches of functional beverages, flavors such as pineapple, ginger, tropical fruit, and watermelon are growing. Limited edition flavors are also becoming more common in functional beverage trends.
What’s Next in Functional Beverage Trends?
Opportunities exist for functional beverages in all beverage subcategories. Functional drinks may be positioned toward Generation Z and Millennials since they are most attracted to functional benefits. Energy claims may become differentiated for different types of energy benefits. Watch for more functional beverage launches with fiber and brain health claims, and with ingredients such as plant-based proteins, zinc, and adaptogenic ingredients. Sugar reduction is likely to continue.
This article is based on our report, “Now & Next in Global Functional Beverages.” If you are interested in reading this report, feel free to request a demo.
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