Functional Beverages; The Booming Category Where Innovation Rules

Corene Canning, Technical Development Manager, Health & Nutrition - Americas at Brenntag North America

In today’s market, beverage producers are tasked with keeping up with rising consumer demand for beverages that offer more than just hydration. In the era of widespread commitment to healthier living, contemporary consumers are opting for daily beverage choices to enhance their lifestyle.

Traditionally, beverage categories included water, milk and milk alternatives, juice, soda, coffee, tea, and energy drinks, and alcoholic beverages like beer, wine, and spirits. In previous years, soda reigned supreme, dominating other drink categories, and soda companies became some of the largest and most recognizable brands worldwide. New product development mainly focused on introducing new soda flavors and attempting to replicate the taste profile of sugar-sweetened beverages with artificial sweeteners. While diet sodas enjoyed many years of popularity, researchers eventually raised concerns about long-term health effects of artificial sweeteners, causing some consumers to educate themselves on ingredients used in their packaged foods and beverages. Consequently, consumers are now using their purchasing power to show their desire for clean label ingredients. 

The current landscape can be characterized as a widespread industry shift fueled by the desire for overall wellness and the willingness of younger generations to explore new beverage options. Functional beverages are seemingly able to penetrate every category of beverage, challenging traditional classifications, while hybrid beverages, blending features or benefits from multiple categories, make it increasingly difficult to confine drinks to conventional boundaries. Consumers are more aware of the positive effects that certain ingredients offer, allowing them to select options tailored to their preferred benefits for a personalized approach.

Post-pandemic, consumers are reaching for beverages promoting immunity boosting ingredients like Vitamins C and D as well as Ginger. Consumers are also growing more aware of the significance of gut health and its effect on digestion, as well as immunity and mood. Pre- and pro-biotics have gained popularity as have fermented beverages like kombucha and kefir. Older individuals may prioritize longevity, seeking bone and joint support by choosing beverages fortified with vitamins, minerals, and Omega 3 fatty acids.

"Post-pandemic, consumers are reaching for beverages promoting immunity boosting ingredients like Vitamins C and D as well as Ginger."

The energy drink category is at the forefront of new product development, due to a pace of life that requires multi-tasking and work from home duties. Beyond a shift towards natural sources of caffeine and non-caffeine energy boosters, including botanical ingredients, energy drinks have paved the way for new innovation into cognitive enhancement and focus. 

Nootropics like L-theanine are recent additions to beverage formulations for their potential to boost cognitive performance and memory. Energy drinks have transitioned from a one-size-fits-all approach to catering to specific consumer segments. Some seek mental alertness for demanding workdays, while others, like video gamers crave long-lasting energy to stay awake for extended periods without experiencing a crash. Notably, innovation has surged in calming beverages as well, with ingredients like magnesium and adaptogens, including ashwagandha and reishi mushrooms gaining popularity to alleviate anxiety or enhance sleep quality.

While the goal of functional beverages is to incorporate health benefits, successful product developers will also consider the prevailing trends of low/no sugar and clean labels. Formulating multi-functional beverages can be challenging due to ingredient interactions, however, advanced ingredient technologies offer solutions. Encapsulation prevents interactions, while clean label hydrocolloids can be used to prevent sedimentation and aid in stability. Technologies improving absorption, bioavailability and solubility maximize the value of functional ingredients. Flavor maskers mitigate undesirable notes associated with functional ingredients, recognizing that ultimately, flavor is the key to success in functional beverages.

In the years ahead, the staying power of functional beverages may be tested. Will consumers experience discernible benefits of consuming these products? Could rising inflation prompt a return to traditional options? Can manufacturers introduce new products incorporating the latest trending ingredient before the next buzzworthy ingredient catches on? One thing is for sure, beverage producers should remain prepared to adapt to the ever-changing demands of this evolving category.