The forecast for the functional beverage market is sunny indeed. In 2020, the functional food and beverage segment claimed an estimated $258.8 billion in consumer dollars, and the market is projected to grow to roughly $529.7 billion by 2028, more than doubling in size.
While brands like Coca-Cola, PepsiCo, and Nestlé are key players, there’s plenty of opportunity to get in on the action, with new brands entering this market segment each year. Of course, you need a concept for hydration, sports drinks, or other beverages that meet consumer needs in a new way.
What’s trending in the functional beverage market now, and what are consumers looking for in 2024? With health and sustainability in mind, beverage manufacturers can formulate functional beverages sure to capture consumer attention in this growing market.
Consumer Health and Wellness
Predictions for 2024 say consumers are likely to put their trust into science-backed wellness strategies, perhaps in response to the misinformation superhighway dominating social media. This jibes with current topics covered at The Center for Food Integrity (CFI) 2023 Transparency Summit.
Speakers and panelists at the event spoke about consumer demand for transparency, leveraging transparency for business performance and sustainable equity, and best practices for transparency, among other topics.
In the functional beverage industry, this not only pertains to label transparency but also provides access to clinical data to back up health and wellness claims.
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Multi-Functional Ingredients
For consumers uninterested in ingesting chemical dyes like Red No. 40 and Yellow No. 5, the functional beverage market is finding new ways to add appealing colors with natural dyes that deliver additional benefits.
Leading the way are golden turmeric, fiery paprika, and most recently, vibrant, violet-hued ube. Not only do these ingredients add intense, eye-catching color to beverages, but they each contribute recognizable flavors that elevate complexity. More importantly, they impart a range of health benefits.
Turmeric is known for its antioxidant and anti-inflammatory properties, while paprika may offer analgesic effects, along with appetite suppression that can help consumers looking to maintain a healthy weight. Ube is naturally high in vitamin C and rich in antioxidants and dietary fiber. It may also help lower blood pressure and blood sugar.
Moody Brews
According to the 2023 Food & Health Survey from the International Food Information Council (IFIC), 74% of Americans believe food and beverages impact mental and emotional well-being. This shift is sure to spill over into the functional beverage market, where botanicals, adaptogens, and nootropics are gaining ground.
IFIC predicts that consumers will lean into functional beverages that offer advantages like better sleep, improved mood, and stress relief. Brands like Kin Euphorics, Launch Hydrate, Hiyo, HOP WTR, and others are already offering beverages that tout mood support, along with benefits like hydration and even a buzzy experience, sans booze.
Sustainability on Every Level
Consumers who value health and wellness enough to choose functional beverages may also be concerned with how these drinks go from concept to store shelves. They might be looking for organic ingredients, as well as inclusions that are fairly and sustainably sourced.
A growing segment of consumers is also interested in supporting organizations that practice sustainability in their operations, including how products are prepared and manufactured.
Sustainable packaging is also trending, with calls for biodegradable, compostable, reusable, or recyclable packaging instead of single-use plastics. Plant-based bioplastics, paper-based cartons, and recyclable aluminum are all great options.
Related: Are Waterless Beverages the Way of the Future?
Finding a Function
The last few years have seen a consumer shift toward mental wellness, but the aftermath of the pandemic has also led to a new emphasis on holistic living, including physical, mental, and emotional well-being. Beverage businesses that can harness this inclusivity have a good chance to meet consumers where they’re at.
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