Sales of functional beverages are burgeoning thanks to ingredient innovations and the emergence of the bio hacking trend.

Shoppers are taking their prescriptions to the grocery store and stocking up on ingredient-driven functional beverages that offer hydration with added health benefits.

Beverage solutions are lining retail shelves that fulfill myriad lifestyle needs beyond quenching thirst. Whether it’s collagen for skin hydration, bone and joint health, CBD for relaxation, turmeric for inflammation and immune support, pro- and prebiotics for gut health, or adaptogens for mental vitality, the functional ready-to-drink beverage category is on fire.

According to Research and Markets’ Functional Beverage Market – Growth, Trends and Forecast (2019 – 2024), the functional beverage market is projected to reach $208.1 billion by 2024. It is forecasted to witness a CAGR of 8.6 percent during the same period.

According to the Specialty Food Association’s State of the Specialty Food Industry research, refrigerated juices and functional beverages grew 18 percent at retail between 2016 and 2018, and are predicted to grow another 9.6 percent by 2023. Functional beverages with a focus on prebiotics are also an emerging trend from the recent Winter Fancy Food Show, according to the SFA Trendspotter Panel.

Convenience, the desire for clean ingredients, an inclination toward non-alcoholic beverages, and a desire to consume lower-sugar drinks over fruit juices and carbonated sodas, are just some of the reasons driving both sales and innovation in the functional beverages category as well as prompting consumers, from Gen-Zs to Boomers, to stores for a sip of grab-and-go wellness. According to a Mintel report titled Inspiration and Innovation in Functional Soft Drinks, 42 percent of consumers under the age of 34, and 22 percent over the age of 55, see the grocery store as a place to improve health.

“Beverage companies boasting optimized mental performance, clarity, and focus are especially attention-grabbing for people with demanding jobs and stress,” says registered dietitian Kylie Gearhart, NY Nutrition Group. While Gearhart cautions against products with overzealous benefit claims, which may or may not be backed by research, she says if someone tries a product and feels it was effective—and it’s deemed safe for consumption by a medical team—then consuming it to help meet a dietary need is a win.

Another driver pushing innovation in the functional beverage category is bio hacking.

“Bio hacking is an exciting trend that is driving change in the [functional] food and beverage industry,” says Bjorn Oste, founder of Good Idea Drinks, a naturally flavored, zero-calorie sparkling water with a blend of five amino acids and chromium, which is reported to balance blood sugar, curb sugar cravings, and make weight loss healthier. “A bio hacker’s primary belief is that the responsibility and control of our health lie in our own hands,” continues Oste. “And to achieve this, they make daily small and incremental diet and lifestyle changes.”

Oste says foods and beverages with scientifically proven properties are at the core of this trend since they can help the bio-hackers achieve a desired state of wellbeing, to help balance their bodies and make them work better.

“People want drinks that make meeting nutritional needs easier, just like certain vitamins. Or, they want drinks that give them complex or unique ingredients in a pleasant tasting drink experience. No one wants to pop a chunk of turmeric or kudzu root into their mouth and eat it,” says Arthur Gallego, founder of Gallego & Co. Marketing Consultants, an LA-based boutique consulting firm specializing in marketing strategy, particularly for natural or better-for-you food and beverage.

Interest in the idea of ‘food as medicine’ is growing. NPD Group finds that about a quarter of U.S. adults are trying to manage a health or medical condition by making healthy food and beverage choices, with younger adults ages 18-24 particularly interested in using foods to improve their health.

Shoppers want their beverages to do more for them than they have in the past. Just hydrating or energizing isn’t enough anymore,” says Julie Terrazzino, senior beverage category manager, KeHE. Terrazzino, who categorizes functional beverages as energy drinks, sports beverages, and protein drinks, says consumers are just looking for more.

The Ingredients
Here are some happenings in the functional beverage space that may deliver a quick and beneficial boost to a health-seeking crowd.

Adaptogens such as Ashwagandha, turmeric, holy basil, tulsi, maca, and an array of mushrooms including reishi, cordyceps, lion’s mane, and shiitake, are sought-after herbal pharmaceuticals in RTD beverages. These are known for helping manage the everyday stressors in life and promoting a mind-body connection.

“I see the industry in a growing stage of being formulation driven, with multiple natural ingredients and nutrients,” says Gallego. Gallego notes the big trends the past few years have been plant protein, probiotics, and most recently prebiotics in the form of plant fiber.

“For nearly 10 years it was about ‘single’ ingredient and ‘super’ ingredient,” he continues. “But people today want more in regard to taste, and brands are realizing single-ingredient drinks have a growth ceiling.”

At Woodstock Farmers’ Market in Vermont, drinks with a combination of ginger, turmeric, or tulsi are appealing to customers, notes grocery team leader Amelia Rappaport, while at Barons Market in Southern Calif., plant-based functional protein is big.

“Pop and Bottle RTD lattes enhanced with marine collagen and plant-based meal replacements like Koia are hot sellers, says Rachel Shemirani, senior vice president, Barons. Shemirani says she is noticing a shift away from heavy caffeinated energy drinks.

“It used to be function meant quick energy. Now we are seeing more customers gravitating toward beverages for stress relief or sustained energy that does not make you jittery. Anything with turmeric, adaptogens, and MCT oil like Kitu Supercoffee that also has protein, is definitely of interest to our customers—especially Gen-Zs, gymgoers, and those that follow a Keto diet.”

Still Crazy for Kombucha
The growth in popularity of probiotic fermented drinks over the past year shows no signs of stopping.

According to BCC Research, the international fermented ingredients market could grow to be worth $28.4 billion this year (an annual growth of 3.4 percent). And, dominating that growth since 2016 is kombucha. Adroit Market Research predicts that the market for fermented tea with live active cultures will grow at 13 percent CAGR in North America and hit $3.5 billion by 2025.

“The early days of kombucha were really not very good,” says Mike Fogarty, owner, Denver, Co.- based Choice Market. “Now, brands in the category are more approachable, having perfected taste by marrying flavors with probiotics for products that are low in sugar and attract customers of all ages who want a healthy gut.”

Among Fogarty’s 30 SKUs of kombucha, Rowdy Mermaid, Upstart Kombucha, and Tru Buch are popular.

“Some kombucha brands are reshaping their images to evolve with soda, and evolution and innovation will be the deciding factors in which kombucha brands lead the category in this new decade,” says Gallego.

Subbing Out Soda
As the functional beverage category continues to evolve, so do consumers’ perception of what soda can be. “The idea of what a soda is, is changing dramatically,” says Gallego. “The more familiar a functional beverage makes their proposition, the easier it is to connect with people about the functionality of that proposition.”

Gallego says brands like OLIPOP, which are rich in soluble dietary fiber but taste just like a sweet soda, are part of this soda evolution. “Ditto for mainstream kombucha flavors from brands like Health-Ade,” he says. “The familiarity of those flavors [Cherry Berry, Ginger Lemon, and Grape Vibes] makes it easier to get into kombucha “as a soda.”

But not all functional soda swaps need be bubbly.

“While we continue to see the degradation of traditional sodas, it’s cool to see all the functional, healthful drinks that customers can sub out for,” says Fogarty. Fogarty, Barons’ Shemirani and Gallego all tout Koia, the plant-based, dairy-free protein shakes that are coconut or almond milk based.

“The movement away from sugar has been strong across all categories and one of the most impactful trends within beverages,” says KeHe’s Terrazzino. “Other brands driving functional beverage innovation, according to Terrazzino, are Protein2O, an infused water with amino acids and whey protein isolate; Celsius, a pre-exercise supplement drink containing good-for-you ingredients, such as green tea with EGCG, ginger, calcium, chromium, B vitamins and vitamin C; and Roar, a USDA Organic electrolyte water.

Looking Ahead
As consumers continue to explore the mind-body connection via food, the future is bright for the functional beverage category.

“Brain health has recently become a hot topic and the expectation is that we will see nootropics in new entrants down the road, says Terrazzino. Nootropics are supplements and other substances that may improve cognitive function, particularly executive functions, memory, creativity, or motivation. These include Ginkgo Biloba, Gota Kola, caffeine, green tea, and L-Theanine, for examples.

“We’re going to see a big return to familiar and nostalgic taste profiles and ingredients along with more coffee alternatives, canned drinks with cascara and cacao,” says Gallego.

Fermented drinks will also continue to innovate. “Fermented has found strong mind share with people, and they associate fermentation with wellness,” continues Gallego. “And we’ll see an increase in alt-liquor, drinks like hard kombucha, or RTD coffee with higher ABV.”

New Functional Beverages

Alo Drink Jen Collagen + Aloe Vera Infused Water, Blood Orange and Lemon. With 2500 mg of low molecular weight marine collagen peptides for superior absorption and only 60 calories per 12-ounce bottle, this infused water claims to help improve hydration and skin elasticity.

Califia Farms Maca-’Nilla Almondmilk. This plant-based protein drink has the nutty taste of maca for a boost of energy and stamina. It has 8 grams of protein and is soy- and dairy-free.

Flying Embers Hard Kombucha, Pineapple Chili. Pineapple with a hint of ginger and a subtle refreshing chili finish this hard kombucha (6.8 percent ABV and 115 calories). It is handcrafted with a calming adaptogen root blend of ashwagandha, turmeric, ginger, and astragalus. Zero sugar, gluten-free.

Koia Keto Cookies ’N Cream. Low sugar and plant-powered, this functional drink is the latest flavor to join the Koia Keto product line. Koia Keto products are made with coconut milk, MCT oil, low net carbs, and zero added sugars to support a keto lifestyle; 12 grams of plant protein, 3 grams sugar, 5 net carbs, and 210 calories per bottle.

LIFEAID CBD Balance. Functional and refreshing, this brand straddles the line between soda, energy drink, and nutritional supplement. CBD Balance is lightly carbonated and contains 20 mg of organic broad spectrum hemp extract from Ojai Energetics, lemon balm, rosemary, and agave.

Olipop Strawberry Vanilla Sparkling Tonic. Not your average soda, this tonic features strawberry juice, fresh lemon, and pink rock salt as well as chicory root, Jerusalem artichoke, Kudzu root, and cassava flour for probiotic digestive health and plant benefits. Only 3 grams of sugar and 9 grams of fiber per 12-ounce can.

OTTO CBD Cider, Pear Rhubarb. Made from organic apples from the Pacific Northwest, this gluten-free sparkling cider has 30 mg of hemp-based CBD to promote relaxation. Alcohol- and THC-free.

Rowdy Mermaid Kombucha Lion’s Root. This small batch-brewed rooibos tea has a combination of Lion’s Mane mushroom, known traditionally to support brain function, turmeric for a boost of antioxidant, and pineapple for tropical flavor. Organic and non-GMO, this kombucha in a can has 9 grams of sugar per 355-ml serving (one can).

Teaonic My Adrenal Mojo: Relax. This caffeine-free wellness drink is packed with plant extracts and herbs. It’s a balancing and energizing combo of: ashwagandha with ancient adaptogenic properties to help the body better adapt to stress; tart cherry and ginger juice for overall immunity; anti-inflammatory hibiscus; balancing cinnamon; and antibacterial clove. Two grams of sugar per bottle.

Xoca Cacao Fruit Soda. This company upcycles Ecuadorian cacao fruit (which is usually discarded after the seeds are taken out to make chocolate) to create a lightly fermented drink made with 50 percent juice from the cacao fruit, and natural sparkling spring water. Its clean source of energy comes from theobromine. Good for the gut and rich in B vitamins. Zero sugar. Available in Mint, Ginger, and Nada.

Functional Nutrients

Don’t be surprised if you start seeing more of these functional nutrients in grab-and-go beverages:

  • Ashwagandha
  • Baobab
  • Birch Sap
  • B vitamins
  • CBD
  • Collagen
  • Co-Q10
  • Elderberry
  • Ginger
  • Hyaluronic acid
  • Maca
  • Manuka honey
  • Reishi mushrooms
  • Spirulina
  • Turmeric

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