Category Spotlight: Sipping for Wellness

Category Spotlight: Sipping for Wellness

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 […]


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