Consumers are reaching for functional beverages for energy, sleep support, immune health, and more. Our team at Glanbia Nutritionals knows how to create functional beverages for the 2023 consumer that deliver health and great taste.
2023 Functional beverage market overview and growth forecast
The $182.7 billion global functional beverage market is expected to grow 6.4% between 2021 and 2026 to reach $249.5 billion, according to Euromonitor (1). Asia Pacific makes up the largest market for functional beverages, followed by North America, while Latin America (9.5%) and Eastern Europe (9.3%) have the highest growth rate (2).
The $50 billion US functional beverage market, which is forecast to grow at a CAGR of 5.8%, accounts for 27% of global sales (3). Energy drinks and sports drinks are the most popular functional beverages in the US, with sales of $18.2 billion and $11.3 billion, respectively (4). The fastest-growing segments, however, are dairy alternative beverages at 9.2% and functional waters at 8.4% (5).
“Functionality has been the most important driver to innovation in the non-alcoholic beverages market for years, and consumer demand for drinks with added benefits has only increased during the pandemic.” -Karen Formanski, Health and Nutrition Analyst, Mintel.
Top functional benefits consumers seek in a beverage
Datassential reports that 80% of US consumers are interested in functional beverages, with 42% very or extremely interested (6). Energy is the attribute the most consumers are interested in (45%), followed by sleep support (40%) and stress reduction (40%) (7). Consumers have experienced a variety of day-to-day challenges arising from the COVID pandemic that have brought these needs to the forefront.
Which functional health benefits in a beverage are you interested in?
(top 10 answers)
| Energy | 45% |
| Sleep support | 40% |
| Stress reduction | 40% |
| Heart health | 37% |
| Immunity | 37% |
| Weight management | 36% |
| Bone/joint health | 33% |
| Longevity | 31% |
| Gut/digestive health | 31% |
| Anti-inflammatory | 28% |
Popular functional beverage ingredients
Fortifications for functional beverages range from vitamins and minerals that address nutrient shortfalls to trending ingredients like adaptogens and nootropics, whose potential health benefits are still being explored. Combinations of functional ingredients can also be added through an off-the-shelf or custom premix. This is an easy way Glanbia Nutritionals can help beverage manufacturers turn any beverage into an energy or sleep support beverage. Today's most popular categories of functional ingredients include:
- Vitamins
- Minerals
- Antioxidants
- Prebiotics
- Probiotics
- Omega-3 fatty acids
- Amino acids
- Herbs and herbal extracts
- Tea and coffee extracts
- Superfruit extracts
Although formulating with functional ingredients addresses consumers’ demand for beverages with benefits, repeat purchase is largely driven by taste. This makes it essential to find a delicious way to deliver those health benefits. Among US sports and performance drink consumers, 55% say flavour is important—ahead of low/no sugar (43%) and vitamin/mineral content (40%) (8).
2023 flavour trends in functional beverages
There is continued popularity of mainstream flavours, such as strawberry, orange/sweet orange, lemonade/lemon, and vanilla/vanilla bourbon leading as the top category flavours (9). Some emerging trends include an expansion in tropical flavours for energy drinks and nostalgic flavours like classic root beer and orange cream for functional carbonates.
In the meal replacement drink segment, where there has been little shift in flavour launches in the past five years, Mintel reports 30% of consumers would like to see more flavour variety (10). Meanwhile, a few brands are introducing nostalgic and dessert-inspired flavours such as Girl Scout cookie and butter pecan in their meal replacement and nutrition drinks.
Glanbia Nutritionals advise that expanding beyond mainstream flavours will be a key strategy in grabbing consumers’ attention in the functional beverage category. Functional beverage flavour trends on our watch list include botanical flavours (e.g., basil, sage, and cardamom) and an expansion in tropical flavours (e.g., guava, jackfruit, and Asian pear). We also expect floral flavours (e.g., elderflower, hibiscus, and rose) to maintain their presence, and fruit varietal flavours (e.g., blood orange, Sicilian lemon, and Tahitian lime) to pick up speed.
The taste of success
Whether a beverage offers a tropical adventure or nostalgic indulgence, consumers are always on the lookout for a healthy beverage that tastes great. Functional beverage manufacturers may have some unique flavour challenges, Glanbia Nutritionals offer a variety of solutions including custom premix and flavour innovation to achieve a winning product. Find out more about Glanbia Nutritionals here.
References
Table source: Datassential, Functional Beverages, February 2021, Base = 993 US consumers
(1-5) Euromonitor, 2022. Data ending 2021.
(6-7) Datassential, Functional Beverages, February 2021.
(8) Mintel, Sports and Performance Drinks – US – February 2021.
(9) Mintel GNPD, 2022. Data ending 2021.
(10) Mintel, Nutrition Drinks – US – 2021.