The functional beverage sector is poised for a significant surge, driven by the rapidly growing interest of lifestyle consumers in this category. These beverages, characterised by their non-alcoholic nature and incorporation of unconventional ingredients such as vitamins, minerals, dietary fibres, probiotics and fruits, encompass a diverse range of products.

A Category On The Rise

Functional beverages, spanning from protein drinks to fermented, recovery, and supplemental beverages, accounted for 30% of all launches in the initial half of 2022, boasting a market share of $48 billion. An impressive 73% of adults report consuming beverages offering some form of functional benefit, with nearly half of these beverages enjoyed in the morning or between meals.

Projections indicate that the functional beverage market will reach $295.71 billion by 2030 from $132.94 billion in 2022, at a CAGR of 10.51% during the forecast period.. This growth trajectory is attributed to companies resuming operations and adapting to the post-COVID-19 landscape, overcoming earlier challenges posed by containment measures such as social distancing and remote work, and the subsequent closure of commercial activities.

Why The Fuss About Functional Beverages?

• A Supplement in a Can

The blurring line between supplements and functional beverages signals a transformative shift in how consumers perceive and prioritise their nutritional intake. The evolving consumer mindset towards holistic health and wellness fuels the demand for multifunctional products that cater to diverse nutritional needs. Functional beverages are uniquely positioned to meet this demand by offering a harmonious blend of taste, convenience, and targeted health benefits.

Whether it's enhancing energy levels, supporting immune function, or promoting mental clarity, these beverages offer a versatile platform for delivering a myriad of functional ingredients in a palatable and enjoyable format.

• A Whole New World of Ingredients to Try

Functional beverage innovators are actively addressing the challenges posed by current and forthcoming regulations regarding unregulated ingredients. This involves navigating the integration of substances such as CBD and adaptogens into beverages, even in the absence of FDA oversight, which offers both promising prospects and potential pitfalls. Companies are strategically planning their approaches, deeply comprehending the regulatory terrain.

By observing how other ingredients evolve under diverse regulatory frameworks, they cautiously advance. Moreover, these innovators are diligently collecting and evaluating data on ingredient safety and efficacy, essential for fostering the sustained growth of the category.

• Taking Clean Label to the Next Level

According to a global survey conducted by the International Food Information Council (IFIC), the most sought-after product characteristics on labels include "natural," "organic," and "non-GMO" ingredients. While the concept of a "clean label" lacks a singular definition, functional beverage companies are proactively engaging with consumer perceptions of the term and how it influences product preferences and expectations.

While some categories may view the clean label movement as restrictive, innovative functional beverage teams are leveraging this pressure to drive forward ingredient innovation and meet evolving consumer demands for natural and organic products.

Trend Categories and Case Studies

• Functional  Water

Functional water emerges as an optimal choice among functional beverages due to its absence of excess calories found in juices or milk-based products. Moreover, it offers versatility, seamlessly integrating with various functional supplements while maintaining a delightful taste. In essence, functional water stands as a potent, hydrating elixir designed to enhance the well-being of its consumer.

Oshee Vitamin Water is a flavoured water infused with essential vitamins and minerals. Each bottle features a delectable flavour profile, delivering vitamins without any preservatives or colourants.

• Natural Energy Drinks

Many of the leading energy drinks on the market are heavily laden with added sugar. Some also feature artificial colours and sweeteners, which discerning consumers may opt to steer clear of. Moreover, they often contain significant doses of caffeine, which can potentially induce feelings of jitteriness, anxiety, or agitation. However, several brands offer healthier alternatives: naturally derived energy drinks that provide the desired boost without the accompanying side effects.

Research indicates that yerba mate possesses potential benefits in enhancing energy levels, focus, exercise performance, and concentration, rendering it an excellent ingredient for a natural energy boost. Guayaki Unsweetened Yerba Maté features an organic composition and minimal sugar content, containing less than 1 gram of naturally occurring sugar.

• Pre- and Probiotics

Probiotics and prebiotics collaborate to cultivate a thriving gut flora, or microbiota, which is becoming increasingly recognised as crucial for overall well-being. While probiotic beverages like kefir and kombucha have dominated the market in recent years, consumers are now realising the potential benefits of prebiotics, which complement gut health in distinct and potent ways.

Culture Pop Soda provides a fantastic alternative to conventional sodas that are laden with artificial additives. Featuring flavours such as watermelon, rosemary lime, and ginger lemon turmeric, this range of beverages is crafted with organic fruit juice, herbs, spices, and live probiotics.

• Dealcoholised Drinks

As health-consciousness becomes increasingly prevalent among Millennials and Gen Z consumers, there's a growing awareness of the risks associated with excessive alcohol consumption. This demographic - and others - is now embracing mindful drinking practices like never before. The rapid and steady ascent of non-alcoholic beverages is facilitating this shift in alcohol consumption habits. The market for non- and low-ABV beverages has experienced a significant surge, offering the same delightful flavours found in various beers, wines, and cocktails, but without the health risks associated with alcohol.

The St. Agrestis Non-Alcoholic Phony Negroni features a distinctive blend of 30 authentic, unprocessed, non-GMO organic botanicals sourced from five continents around the globe. The culmination of this meticulous selection process is a non-alcoholic, bottled Negroni suitable for all occasions.