Consumers may initially reach for beverages seeking hydration and refreshment, but many are interested in more. Among millennial and Gen Z shoppers, in particular, expectations are high.

Younger consumers want to connect with brands that offer an experience. They’re seeking authenticity and sustainability, paired with options to personalize brand interactions.

In the growing functional beverage market, this means offering products that add practical value, observe flavor trends, and offer format innovation. Here’s a closer look at what’s new now and how brands can capitalize on demand for beverages to drive daily consumption.

Hydration and Function

Hydration is the cornerstone of any functional beverage, but modern consumers are looking for more than electrolytes. They want products that build on basic hydration with practical benefits to improve energy, mood, and gut health.

Gut-friendly fermented beverages like kombucha have hit their stride, but consumers are branching out with offerings like tepache. A traditional Mexican drink made from pineapple peels, rinds, and cores, it creates a pleasantly fizzy beverage when wild yeast combines with sugar.

Adaptogens are also realizing mainstream success, with brands like REVIVE offering transparency and clinical support for claims. The brand’s Mushroom Complex includes two grams of nootropic lion’s mane to combat anxiety and enhance cognitive function. Hiyo social tonics even feature ingredients like stress-relieving ashwagandha, L-theanine for focus, and ginger to aid in digestion.

Format Innovations

Canned and bottled ready-to-drink (RTD) options are the go-to for many consumers seeking convenience. However, there are other options for brands looking to capitalize on pain points like storage and sustainability. Format innovations are addressing these concerns in different ways.

Powders and concentrates address both concerns by removing bulky liquids and reducing packaging. REVIVE’s Mushroom Complex powder and Monin Energy Boost concentrates take up little space, require far less plastic packaging, and can easily be added to water in small doses. Shots offer similar compact storage.

Want more trends and insights? Subscribe to our Weekly Newsletter here!

Flavor Considerations

Say goodbye to “swicy” and hello to “switter.” The popularity of sweet-and-spicy beverages, complete with Tajin-rimmed glasses, is giving way to a pairing of sweet and bitter profiles that offers brands the opportunity to differentiate from recent trends with herbal and botanical offerings.

Casamara Club has the new trend on lockdown with non-alcoholic cocktails featuring a compelling, bittersweet finish. The Superclasico aperitivo blends botanicals like bitter citrus, red currant, and juniper with kola nut, allspice, and vanilla.

Japanese whiskey purveyor Suntory has its own range of RTD beverages, including a line of coffee drinks under the Boss Coffee banner. The brand’s signature styles feature a blend of coffee, milk, and sugar that hits the sweet spot, with up to 50% more caffeine than the average 8-ounce cup of coffee.

Functional Beverages, Supplements, and Wellness Routines

The value of the global market for dietary supplements is currently estimated at over USD $209 billion. Brands offering functional beverages are uniquely positioned to target this market by including vitamins, botanicals, adaptogens, and other ingredients that offer the same benefits as supplements, and contribute to an overall wellness routine.

Boasting low sugar, high fiber, and 20 to 32g of protein, REBBL’s range of RTD shakes not only makes it easy to up protein intake, but also features adaptogens like Reishi mushrooms and zinc for immune support. In a similar vein, Vital Proteins offers sugar-free Collagen Sparkling Water with clinically backed VERISOL® collagen peptides and vitamin C to support skin health.

Related: Functional Non-Alcoholic Beverages: Innovation, Ingredients, and Opportunities

Making Functional Fresh

Appeasing loyal customers while attracting new consumers is a balancing act, but in the fast-moving functional beverage market, it pays to follow trends and innovate while preserving flagship products. 

With a focus on function, flavor, format, and the overlap of supplement and wellness markets, brands have the best opportunity to remain relevant and grow market share.

Key Takeaways

• Brands can add value with beverages that elevate hydration with gut-health and mood-boosting function
• New formats and flavor innovations increase convenience and novelty

Get in touch with us today! Contact us here