Key Trends in Functional Beverages

Key Trends in Functional Beverages

The COVID-19 pandemic has changed many aspects of consumer behavior and daily life. The grocery market experienced much faster than average growth in 2020 since people were staying at home more than usual due to remote work and schooling. In 2020 especially, more people looked to improve their health to prevent or lessen the severity of illness with supplements or functional foods and beverages.  

What Are Functional Beverages?

Functional beverages have label claims perceived to confer functional benefits important to health or everyday life. These products may be in ready-to-drink (RTD) or ready-to-mix/brew form (e.g., beverage powders, liquid drink enhancers, dry coffee and tea).

Added ingredients in functional beverages may provide benefits such as increased energy, enhanced hydration, boosts in cognitive function/brain activity, better sleep and relaxation, boosts in immunity, increased gut health, meal replacement and weight management, and sports performance improvement.

Some of the most popular and established functional beverages are energy drinks, sports drinks, and weight loss/diet shakes, but new products are being developed all the time, particularly those with better-for-you positioning (e.g., low/no sugar added, all natural, clean label).

Food as Medicine

Many consumers believe in the concept of “food as medicine” and eat healthy foods to prevent health problems or treat specific symptoms they are experiencing. For some, the pandemic has inspired more focus on healthy living in general — regular exercise, more whole foods, etc. — and not just susceptibility to illness. Functional beverages are appealing to those who want to make small changes for big results.

A number of companies are investing in functional beverages and developing new products to appeal to these tastes. For instance, Barry Callebaut just launched a drink called Elix that is purported to improve circulatory health with ingredients that help maintain blood vessel elasticity. Through the power of whole cacao fruit, the company intends to target those with interest in food as medicine for sales. The products have already gained approval to be labeled with certain health claims by the European Food Safety Authority, and the FDA is likely to approve these claims early next year in the U.S.

“Superfoods” and “Adaptogens”

Functional beverages often contain “superfood” or “adaptogen” ingredients that some people believe have health benefits.

Foods that are called “superfoods” are purported to have higher nutrient density. Many fruits, vegetables, and “ancient grains” have been introduced or re-introduced to Western markets using this nomenclature (or the similar terms “superfruit” or “supergrain”). Consumers may seek out so-called “superfoods” such as chia seeds, quinoa, avocadoes, goji berries, or broccoli to eat whole for increased nutrition. However, packaged food and beverage products with added “superfoods” are much more convenient for people who want to incorporate more “superfoods” without much effort.

Similarly, “adaptogens” are certain herbs or mushrooms purported to have health benefits. These ingredients are often sold as teas, tinctures/shots, capsules, or powders added to food or beverages. Adaptogen theory suggests that certain ingredients help the human body adjust to physical, biological, or mental stressors and return to homeostasis. Possible benefits of different “adaptogens” include anxiety relief, immunity boosting properties, and anti-aging effects. Several ingredients purported to be “adaptogens” include tulsi (holy basil), ginseng, ashwagandha, goji berries, turmeric, and licorice root.

Some ingredients have overlap with being called “superfoods” or “adaptogens.” As with “superfoods,” there is not much extant research that supports claims that “adaptogens” benefit health; in fact, there is plenty of skepticism about whether these ingredients have health benefits at all. More scientific study is needed for any sort of conclusive answer.

Where to Learn More

Additional analysis of the market for functional beverages can be found in the 2021 Packaged Facts report Functional Beverages: Market Trends and Opportunities.

About the blogger: Cara Rasch is a food and beverage analyst for Packaged Facts. She studies consumer and industry trends in this space and has a B.A. in economics from Allegheny College.