Eight ways functional health is changing the market

functional beverages

Health and wellbeing drives the food and drink we consume, the clothes we wear, the companies we work for, how we travel and more. Rising health consciousness has hit a critical point as better-for-you products have transitioned from a nice to have, to a necessity.

Enter ‘functional drinks’ - any beverage that’s designed to have a positive effect on one’s health, whether by preventing poor health or providing an enhanced experience. It’s gathered pace in the last three to five years and has permeated every beverage category from juices and smoothies to alcohol, dairy and protein drinks. According to Future Market Insights the functional drinks market is expected to reach $279bn by 2021, a 60% increase since 2014 globally.

We’ve identified eight ways the functional health trend is switching up the beverage market.

Reduced sugar

Across all beverages, the increase in reduced sugar formulations is hard to miss. The trend is evident across the media, on supermarket shelves and now on restaurant menus. This all driven by increased media scrutiny, the introduction of sugar tax and increased consumer knowledge leading to health concerns such as weight control and diabetes.

The message is clear - we should all consume less sugar, and so brands are re-positioning to stay present in the sugar free conversation. As a result, we’re seeing increased innovation in natural low-calorie sweeteners and other sugar reduction solutions. According to a consumer survey by Global Data, 87% of consumers globally say they are trying to cut or moderate their consumption of sugar, with fruit and vegetable juices predicted to be the highest growing segment in the sugar free beverage market.

Natural

The consumer need for natural continues to gather pace and is shaking up every segment of the beverage industry. It is an important and complex trend and follows in the wake of the ‘anti-sugar rush’ as consumers look to move away from sugar, towards natural alternatives, rather than synthetic sweeteners.

Millennials are leading the escape from artificial ingredients by seeking nutrient-rich ingredients, following a distrust of complex labelling and hidden nasties. Consumers want to understand origins and processes of ingredients – taking a crafted artisan lemonade as an example, consumers are interested to know from which groves the lemons were sourced, how and where they were processed etc.

It’s all in the word, as any claim of ‘natural’, implies functional benefits are intrinsic, however it also presents brands with a multitude of challenges as the term ‘natural’ is hugely subjective.

Our shrinking world is driving new flavours

The world is getting smaller thanks to technology and our increasing affinity for travel, which is bringing new tastes and experiences to our doorstep.

Our greater interest in the food and drinks we prepare is influenced by our advancing tastes as we become ‘flavour tourists’ – travelling to faraway places and experiencing new ingredients. We’re now blending flavours to create unique products that satisfy our evolving palette, with a greater emphasis on creative and unusual pairings that offer both flavour and function to capture the consumers’ imagination.

Accessible convenience

We live in world of instant gratification and time poor consumers who are prepared to pay for the convenience.

Consumers want products that are not only good for them, but can also conveniently slip into the rhythm of their day – from energy boosting breakfast smoothies, a refreshing flavoured water to an RTD iced tea or vitamin-infused vodka.

Taking the breakfast category, fruit juice brands are offering a blend of fruit and cereal in the form of a smoothie and or a drinkable cereal with added protein. Cold pressing, ‘ugly’ and luxury varietal-based products are also driving consumer interest in mature juice markets.

Ancient wisdom and remedies

People are taking responsibility for their own health and seeking products that give health benefits. Consumers are seeking function based on healing, rather than just additional benefit, this includes the rediscovery/renaissance of old traditions such as herbs, vitamins and minerals.

The clean label trend has sparked this renaissance, reverting to ancient wisdom with old recipes like Kombucha for gut health, and incorporating herbs, plants and fruit like matcha and acai berries.

Hydration is not enough

Adding functionality beyond hydration is popular, where brands experiment with citrus, teas, super fruits, proteins, seeds, nuts and pulses to add both nutritional value as well as texture.

Consumers are looking to their beverages to offer a good source of calcium, fibre, antioxidants, protein, omega 3 and probiotics. There has been an increase in fermented claims as it meets the demands for less sugar and is popular for those seeking bitter and sour flavours.

Beauty beverages are also on the up including ingredients such collagen for the skin, cinnamon extracts to tackle diabetes, omega-3s for heart health, and macro-molecules to combat ageing. Making skincare not just topical but ingestible too.

Blurred lines

Functionality will be a key innovative driver for the majority of NPD in the coming years and as it does lines will continue to blur between the traditional beverage categories.

The energy drink category is subtly rebranding itself to appeal to a healthier audience with mainstream brands reformulating as organic, caffeine-free alternatives emerge.

Plant-based water, juice and protein innovation is set to lead the charge. With tea also providing a popular ingredient offering both natural and health connotations, depending on the blend selected.

The best things come in small packages

Chilled ready to drink nutrient rich juice shots are on the up, squeezing all the nutrients of larger volumes into just two ounces, with the added bonus of less sugar and fewer calories. With brands also using this platform to successfully take niche ingredients to mass market levels, like bee pollen, maca and spirulina via these remedy inspired beverages.

Pill fatigue is motivating consumers to drink vitamins, minerals and other potentially healing agents, with the vitamin pill being replaced with grab and go vitamin drink.

Explore how our flavour ingredients can help you stand out in the functional space.