By Mike Montemarano, Associate Editor06.01.23
Functional beverages on the market today are quickly diversifying. Formulation and delivery technologies allow for sensitive ingredients, once reserved for more stable formats, to be incorporated into beverages across a range of manufacturing conditions.
As a result, consumers today expect beverages with health claims to deliver on those promises in a way that compares to dietary supplements.
Some of the fastest-growing ingredients, by year-over-year sales ending in March 2023, include biotin (+1,713% to $6.3 million), pea protein (+457.9% to $8.2 million), fiber (+196.3% to $78.5 million), magnesium (+185.2% to $2.1 million), zinc (+181.6% to $641 million), supplemental carbohydrates (+144% to $9.2 million), cordyceps (+116.5% to $1.2 million), acetyl L-carnitine (+113.6% to $9.7 million), and multi-mineral ingredients (+101.9% to $34.4 million).
What makes a beverage “functional” is relatively difficult to define, said Adriana Chychula, food, drink, and nutrition analyst at Mintel. Therefore, it can be difficult to assess the size of the market. “That being said, the fundamentals are what drive consumer interest over niche functions. Energy and hydration are functional claims that will hold steady, as they cast wide nets that apply to anyone. Added vitamins and general nutrition follow similar principles.”
Gen Z is the most likely age group to seek out functional foods and beverages over dietary supplements, according to Mintel. Millennials are most likely to seek out functional beverages when they’re choosing a nonalcoholic beverage product (30%). This age group most strongly associates the terms “organic” (50%), “offers functional benefits” (46%), and “clean label” (42%) with “healthy.”
Baby Boomers are least likely to agree that functional drinks are more effective than taking vitamin and mineral supplements (32%), but strongly associate this product category with helping them to relax (52%) or accomplish their health goals (49%).
According to 2022 research by Innova Market Insights, the most popular reason that consumers across three age groups (18-25, 26-35, and 36-55) purchased a functional beverage was to support immunity (24%), with gut/digestive health closely following (22%). However, gut and digestive health led for consumers over the age of 56 (19%), and immunity was a close second (18%).
The fastest-growing types of functional drinks, by portion of new product launches in North America are iced coffee (5-7% from 2018 to 2022) and carbonated drinks (10-13%), according to Innova. Functional soft drinks with claims of immune support (8.7% market share, +23% CAGR), plant-based (7.5% market share, +17.8% CAGR), and prebiotics (4.0%, +31.6% market share) are experiencing substantial upward trajectories.
A consumer will likely switch from a supplement to a compatible beverage because it’s a more enjoyable, convenient routine, said Mike Hughes, head of research and insight at FMCG Gurus. “[Consumers] sometimes forget to take a product and then, once that has happened, give up using it completely. As a result, consumers are wanting formats that they associate more with being everyday food and drink, so that they turn to them habitually and as second nature…. Over the next couple of years, [nutraceutical] brands will engage in strategies such as water-soluble versions of products to try and ‘normalize’ the consumption occasion.”
With today’s inflationary pressures, brands must justify the value, efficacy, and premium price point of functional beverages, or they may be ignored. The pandemic-related mentality of health-at-any-cost is a thing of the past, according to Hughes.
“Consumers will turn away from supplement-type products and look to boost their health through everyday products that they deem staple groceries and core essentials,” said Hughes. “What we will see over the next 12 months is consumers moving to everyday beverages such as juices which carry multiple ingredient claims, such as high in vitamin C and vitamin D. In comparison, some RTD beverages within the sports nutrition sector may see a drop-off in sales.”
Inflation is affecting all parts of the grocery store, noted Haleigh Resetar, corporate communications specialist at SPINS, “but while initial price is higher, many of the functional sodas have a lower increase in (average retail price) than conventional soda brands, making them not look as expensive or as much of an indulgence in comparison.”
The widespread inclusion of scientifically substantiated ingredients in beverages will help to justify product premiums, said Maria Stanieich, marketing manager at Kyowa Hakko USA. “Our lives are on the go like never before, so if we can package up functional ingredients into convenient beverages that taste great, we can meet multiple lifestyle demands.”
“More functional ingredients means more taste and formulation challenges,” said Philip Caputo, marketing and consumer insights manager at Virginia Dare. “It’s becoming a challenge for formulators to work with the growing slate of functional ingredients that brands are interested in.”
The ingredients winning in today’s functional beverages market, such as caffeine extracts, botanicals, nootropics, CBD and other cannabinoids, mushrooms, and more all present off-putting flavor profiles, he noted. “The solution often involves a combination of approaches, all depending on the product format, desired taste, label claims, and functional benefits. There isn’t a one-size-fits-all solution, so tailored approaches work best, which include taste refinement systems, characterizing flavors, bitter blockers, and more.”
Carla Saunders, senior marketing manager for high-intensity sweeteners at Cargill, noted the vast improvements across the entire natural sweeteners category today. A lack of suitable flavor options is now a rare instance. “Cargill’s latest sweetening solution, EverSweet stevia sweetener and ClearFlo natural flavor, offers a more sugar-like experience than other stevia options. EverSweet and ClearFlo deliver an improved sweetness expression and a sweetness profile that is even closer to sucrose. At the same time, it helps manage off-flavors from other ingredients used in formulation, including earthy and beany notes from plant-based proteins, bitterness from caffeine or vitamins, or metallic tastes from minerals. In addition, it enhances characterizing flavor profiles, from light, fruity notes to rich chocolatey tones.”
Several flavor categories have experienced monumental growth in functional beverages over the past 12 months, SPINS reported. The sharpest upticks were experienced by herb and herbal flavors (+527.9%); cherry cola (+383.6%); cream soda (+378.3%); lemonade (+337.3%); root beer (+137.4%); watermelon (+93.6%); strawberry (+75.7%); lemonade with other flavors (+56.5%); blue raspberry (+49.6%); lime (+41.7%), and peach (+36.8%).
This comes at a time when consumers want to stretch their dollars, said Chychula. Further, many micronutrients have a wide range of functions to bring up on-pack. “There’s lots of opportunity left on the table based on missed connections,” she said.
According to Hughes, “Consumers who turn to sports nutrition products are no longer just avid gym goers but everyday consumers who are turning to products to help them get through the day. As such, they are interested in claims beyond those associated with performance, strength, and endurance, such as products helping to aid digestive health and immunity.”
The key to success for multi-functional beverages is a solid list of branded ingredients on the panel, said Stanieich. “We’re seeing beverages hit the market that offer a blend of branded ingredients that promote a variety of benefits.”
Stanieich noted that Cognizin and Immuse, which offer nootropic effects and broad-range immune support, respectively, are resonating in the beverage space. “The greatest challenge, and also the greatest opportunity we see, is the number of ingredient options that brands and consumers now have access to.”
“The influence of natural trends is especially evident in this space, as brands turn to natural sources of caffeine, like guarana and green bean coffee extract, to give consumers an energy boost,” said Saunders at Cargill. “It’s really mirroring what we’ve been seeing on the sweetener side for years.”
Kyowa Hakko recently conducted two in-house consumer surveys, which demonstrated that U.S. consumers feel their concerns are underserved by today’s market of energy drinks. Four in five consumers said it is important to their quality of life to have mental focus, mental energy, and the ability to concentrate, with nearly as many saying the same for clear memory recall and cognitive health.
Next-generation energy beverages must be up to the task of improving cognitive performance, which is a challenging area for most consumers, Kyowa’s survey concluded. More than half of respondents said they often struggle to stay alert for the whole day (58%) or mentally focus on tasks (53%). They struggle in large numbers with a lack of mental clarity (51%), paying attention for more than a minute (45%), and with bad moods (42%).
Consumers said they’d be most concerned about an energy beverage due to the potential for loss of sleep (67%), anxiety (61%), restlessness (59%), energy crash (59%), and jitteriness (58%). On a similar note, effectiveness and safety (89%), taste (92%), purity (82%), natural ingredients (80%), and scientific backing (80%) were top purchase drivers for energy drinks.
“Weekend warriors and gamers want a mental edge to be more competitive. Working parents need help to juggle their career, home, and children without succumbing to mental burnout. Empty nesters and retirees are trying to defy cognitive and behavioral aging,” said Stanieich.
She noted that citicoline, an endogenous chemical, has been linked in human clinical trials to memory improvements in adults with age-related memory impairment, along with improvements in attentional performance, brain energy, motor speed and attention, and has previously been established in a 2006 review as a candidate for therapeutic effects on multiple forms of cognitive impairment, covering symptoms related to memory, behavior, and attention.1-4
Satiety is also relevant to consumers who rely on functional drinks while on the go, said Hughes. “A big area of innovation within the energy drinks market is the use of plant protein for a sustained, natural energy boost,” he said, noting the negative connotations of relying on sugar, caffeine, and taurine.
While tea and coffee pose plenty of technical challenges for specialty ingredients due to the heat of brewing, companies are making breakthroughs. This is the space where mushrooms and adaptogens have been featured prominently.
This year, Host Defense Mushrooms launched MycoBrew Drink Mixes, a range which includes coffee, matcha, cocoa, and mocha drinks fortified with Lion’s Mane for cognitive benefits. Meanwhile, Om launched an Arabica bean coffee that contains 2,000 mg of a complex of Lion’s Mane, Turkey Tail, Cordyceps, and Reishi standardized to 35% beta-glucans, along with 120 mg of naturally-occurring caffeine and Ginkgo biloba.
“Consumers will always have an affinity for the morning cup of Joe, but new flavors and ingredients are propelling rapid growth in both the coffee and coffee creamer categories. There’s been a steady increase in demand for healthier, more functional coffee beverages over the past several years,” said Caputo.
Sodas are another type of beverage where adaptogens are beginning to populate. Notable mentions include: Rowdy Mermaid’s Good Mood Soda, which contains ashwagandha; Perfy’s Superfood Soda with Ashwagandha; and My Muse sodas which combine vitamins A, B, C, and E with Panax ginseng, ashwagandha, and Ginkgo.
For mood benefits, formulators shouldn’t count out magnesium, especially in the L-threonate form which is most bioavailable across the blood-brain barrier. This relatively under-studied form of magnesium was the subject of a clinical trial last year which linked supplementation to memory improvements in 109 adults. Magnesium L-threonate was recently included in a functional sparkling water and powdered beverage launched by Recess, a company that previously only created beverages containing cannabidiol (CBD) as the leading active ingredient.5-6
Hydration clearly has a bigger role to play in today’s functional beverage market, as brands highlight the role of replenishing the electrolytes calcium, magnesium, sodium chloride, and potassium in maintaining feelings of energy. They’re featured in several energy drinks launched within the past few years, including legacy players. Gatorade launched Fast Twitch, a line of energy drinks which combine 200 mg of caffeine with an electrolytes blend. Other notable recent launches include Optimum Nutrition’s Amin.O Energy powdered and RTD beverages, and Nuun Energy’s dissolvable tablets.
For the most part, only spore-forming probiotics are capable of surviving the beverage manufacturing process, while most living organisms will be wiped out by heat and pH. Beverages will serve as an important foothold for the non-living pre- and postbiotic ingredients marketplace, said Jenna Nelson, EpiCor marketing director, Cargill.
“That’s why we’re leveraging Cargill’s extensive experience in formulation to make EpiCor postbiotic more accessible to consumers by incorporating it into a range of products, from chocolate milks to powdered drink sticks, juices, teas, and more,” said Nelson. “Because of its inanimate nature, EpiCor is easy to use in beverages, offering heat, pH, and shelf stability. EpiCor is also backed by more than a dozen published studies, including multiple human clinical trials, which show that EpiCor postbiotic may support immune health and gut microbiome modulation.”
One of the biggest increases in sales within the functional beverage category has been sodas with digestive health claims. This category grew by 196% from $50.1 million to $148.6 million in the past year, according to SPINS. A soda that replaces refined sugars with better-for-you fibers have been well-received. Amid widespread declines in the sales of conventional sodas, Olipop is on track to surpass $200 million in sales five years after its founding. CEO Ben Goodwin reported that giants PepsiCo and Coca-Cola have already expressed interest. Other brands in the limelight include Poppi, Mayawell, Daytrip, and more.
Even Michelle Obama, former first lady known for leading the “Let’s Move!” public health campaign against childhood obesity, is in on swapping out sugar for fiber. She announced in May that she joined a brand called Plezi as a co-founder. The company launched a line of kid’s drinks formulated to have 75% less sugar than most 100% fruit juices, and is fortified with fiber and minerals.
All three of these proprietary, clinically-substantiated ingredients are co-fermented in order to improve bioavailability, utilizing the company’s know-how gathered over 150 years of yogurt and cheese making. According to internal consumer research, 150 recreationally active athletes who took the ingredient for three weeks widely self-reported improved satisfaction with physical wellbeing (80%) and significantly reduced bloating (60%) compared to baseline.
According to Zeilstra, the added gut-health benefits appeal both to the niche corner of elite athletes as well as active lifestyle consumers. For athletes (90%, according to FrieslandCampina’s internal consumer research), the compounding stressors of chronically high protein and caloric intake, training protocols, and competitions often wreak havoc on digestive health. Meanwhile, many everyday consumers are fixating on gut health as key to overall wellbeing. “This was a trigger for us to look into how we can best operate in this space,” Zeilstra said.
Proprietary production technologies, and revisiting ancient production methods like fermentation through the lens of modern science, will fundamentally change the way proteins taste, look, and perform, he said.
“For Biotis Fermentis, the composition of proprietary ingredients is just one part of what makes this protein what it is. But the reason other companies couldn’t just take this concept and launch it themselves is the production technologies and fermentation methods we use. One would need to be able to handle the co-fermentation of all of these ingredients in a factory setting and keep all bioactive proteins, spore-forming probiotics, and prebiotics intact.”
On the whole, Zeilstra said that Biotis Fermentis is an example of where next-generation protein ingredients are headed. “I strongly believe that the protein category will continue to take a deeper look at established production techniques like fermentation. There’s plenty more to come in that area, and I think that we’ll continue to revisit fermentation and other production techniques with a new scientific understanding.”
Technologies improving the taste and performance of plant-based proteins will enable them to take a bigger share of the market, said Christine Addington, principal technical account manager at Cargill. These technologies are hitting the market at just the right time, as there’s been a steady upward trend in protein inclusion levels.
“Twenty grams of protein is now a common threshold, with some customers aiming for 30 or even 40 grams of protein in a single serving,” said Addington. This poses a major challenge for less-soluble plant proteins, which present sandy, gritty mouthfeel. “Advances in processing technology are finding solutions to the long-standing solubility problem. Groundbreaking products like PURIS 2.0 pea protein, with its enhanced solubility and improved sensory profile, are the key. With PURIS 2.0, we can take protein levels much higher and still create creamy, indulgent products.”
In a webinar jointly held by the Global Organization for EPA and DHA Omega-3s (GOED) and Mintel, Lynn Dornblaser, director of innovation and insight at Mintel, said that opportunities are emerging. Omega-3 fortification is much more common in foods than it is in beverages, however, vegan alternative beverages, especially in the dairy category, as well as infant and children’s formulas, are prominently featuring EPA and DHA.
A common trait across omega-3 fortified products on the market is direct and simple claims of EPA and DHA content on front-of-pack. “Consumers might not understand the differences between EPA, DHA, ALA, fish oil, and more,” Dornblaser said. Product makers should consider highlighting benefits centered around cardiovascular health, cognitive health, inflammation, and skin health, she suggested.
Another important commonality is that products make note of flavor masking technologies, and a formulation’s ability to prevent fishy burps, Dornblaser said.
The first area in which omega-3 fortified beverages are expanding into U.S. markets are dairy products, as well as plant-based dairy alternatives for both children and adults, with brain support claims leading.
Fairlife Reduced Fat Ultra-Filtered Milk, for instance, contains 100 mg per serving of DHA and comes with a brain health claim on-pack. Additionally, Ripple launched a plant-based milk targeting children’s nutrition, which contains 50 mg of DHA along with choline, prebiotic fiber, and pea protein, with claims about supporting children’s brain development.
Enfamil also launched Enfagrow, a functional beverage designed to complement a toddler’s diet, which also calls out DHA content in the context of supporting brain development. Two key examples for adult consumers include the U.S. launch of Happy Viking, with a line of plant-based protein shakes that include DHA derived from algal oil, as well as the Canadian launch of Vega’s plant-based All-In-One shake, which includes a DHA content claim.
A rule of thumb for launching omega-3 fortified beverages in the U.S. is to keep it simple, Dornblaser said. “Focus on the benefits. Discussing how a product will optimize a person’s health is how you move consumers into new categories. Also, don’t overestimate how much consumers understand what DHA or EPA are.”
2. McGlade, E. et al. (2012). Improved Attentional Performance Following Citicoline Administration in Healthy Adult Women. Food and Nutrition Sciences. 3(6)769-773. doi: 10.4236/fns.2012.36103.
3. Silveri, M. et al. (2008). Citicoline enhances frontal lobe bioenergetics as measured by phosphorus magnetic resonance spectroscopy. NMR in Biomedicine. 21(10):1066-75. doi: 10.1002/nbm.1281.
4. McGlade, E. et al. (2019). The Effect of Citicoline Supplementation on Motor Speed and Attention in Adolescent Males. Journal of Attention Disorders. 23(2):121-134. doi: 10.1177/1087054715593633.
5. Sun, Q. et al. (2016). Regulation of structural and functional synapse density by L-threonate through modulation of intraneuronal magnesium concentration. Neuropharmacology. 108:426-39. doi: 10.1016/j.neuropharm.2016.05.006.
6. Zhang, C. et al. (2022). A Magtein, Magnesium L-Threonate-Based Formula Improves Brain Cognitive Functions in Healthy Chinese Adults. Nutrients. 14(24): 5235 doi: 10.3390/nu14245235
As a result, consumers today expect beverages with health claims to deliver on those promises in a way that compares to dietary supplements.
Functional Beverage Market Conditions
According to SPINS, the highest-selling ingredients used for functional beverages are taurine ($4.22 billion), caffeine ($1.23 billion), kombucha ($662 million) potassium ($595 million), green tea extracts ($481 million), creatine ($216 million), probiotics ($210 million), guarana ($178 million), and multiple vitamin ingredients ($179 million).Some of the fastest-growing ingredients, by year-over-year sales ending in March 2023, include biotin (+1,713% to $6.3 million), pea protein (+457.9% to $8.2 million), fiber (+196.3% to $78.5 million), magnesium (+185.2% to $2.1 million), zinc (+181.6% to $641 million), supplemental carbohydrates (+144% to $9.2 million), cordyceps (+116.5% to $1.2 million), acetyl L-carnitine (+113.6% to $9.7 million), and multi-mineral ingredients (+101.9% to $34.4 million).
What makes a beverage “functional” is relatively difficult to define, said Adriana Chychula, food, drink, and nutrition analyst at Mintel. Therefore, it can be difficult to assess the size of the market. “That being said, the fundamentals are what drive consumer interest over niche functions. Energy and hydration are functional claims that will hold steady, as they cast wide nets that apply to anyone. Added vitamins and general nutrition follow similar principles.”
Gen Z is the most likely age group to seek out functional foods and beverages over dietary supplements, according to Mintel. Millennials are most likely to seek out functional beverages when they’re choosing a nonalcoholic beverage product (30%). This age group most strongly associates the terms “organic” (50%), “offers functional benefits” (46%), and “clean label” (42%) with “healthy.”
Baby Boomers are least likely to agree that functional drinks are more effective than taking vitamin and mineral supplements (32%), but strongly associate this product category with helping them to relax (52%) or accomplish their health goals (49%).
According to 2022 research by Innova Market Insights, the most popular reason that consumers across three age groups (18-25, 26-35, and 36-55) purchased a functional beverage was to support immunity (24%), with gut/digestive health closely following (22%). However, gut and digestive health led for consumers over the age of 56 (19%), and immunity was a close second (18%).
The fastest-growing types of functional drinks, by portion of new product launches in North America are iced coffee (5-7% from 2018 to 2022) and carbonated drinks (10-13%), according to Innova. Functional soft drinks with claims of immune support (8.7% market share, +23% CAGR), plant-based (7.5% market share, +17.8% CAGR), and prebiotics (4.0%, +31.6% market share) are experiencing substantial upward trajectories.
A consumer will likely switch from a supplement to a compatible beverage because it’s a more enjoyable, convenient routine, said Mike Hughes, head of research and insight at FMCG Gurus. “[Consumers] sometimes forget to take a product and then, once that has happened, give up using it completely. As a result, consumers are wanting formats that they associate more with being everyday food and drink, so that they turn to them habitually and as second nature…. Over the next couple of years, [nutraceutical] brands will engage in strategies such as water-soluble versions of products to try and ‘normalize’ the consumption occasion.”
With today’s inflationary pressures, brands must justify the value, efficacy, and premium price point of functional beverages, or they may be ignored. The pandemic-related mentality of health-at-any-cost is a thing of the past, according to Hughes.
“Consumers will turn away from supplement-type products and look to boost their health through everyday products that they deem staple groceries and core essentials,” said Hughes. “What we will see over the next 12 months is consumers moving to everyday beverages such as juices which carry multiple ingredient claims, such as high in vitamin C and vitamin D. In comparison, some RTD beverages within the sports nutrition sector may see a drop-off in sales.”
Inflation is affecting all parts of the grocery store, noted Haleigh Resetar, corporate communications specialist at SPINS, “but while initial price is higher, many of the functional sodas have a lower increase in (average retail price) than conventional soda brands, making them not look as expensive or as much of an indulgence in comparison.”
The widespread inclusion of scientifically substantiated ingredients in beverages will help to justify product premiums, said Maria Stanieich, marketing manager at Kyowa Hakko USA. “Our lives are on the go like never before, so if we can package up functional ingredients into convenient beverages that taste great, we can meet multiple lifestyle demands.”
Flavors
In this market, taste is king, and no beverage is a viable option for a pill-fatigued consumer if it doesn’t deliver on the flavor front.“More functional ingredients means more taste and formulation challenges,” said Philip Caputo, marketing and consumer insights manager at Virginia Dare. “It’s becoming a challenge for formulators to work with the growing slate of functional ingredients that brands are interested in.”
The ingredients winning in today’s functional beverages market, such as caffeine extracts, botanicals, nootropics, CBD and other cannabinoids, mushrooms, and more all present off-putting flavor profiles, he noted. “The solution often involves a combination of approaches, all depending on the product format, desired taste, label claims, and functional benefits. There isn’t a one-size-fits-all solution, so tailored approaches work best, which include taste refinement systems, characterizing flavors, bitter blockers, and more.”
Carla Saunders, senior marketing manager for high-intensity sweeteners at Cargill, noted the vast improvements across the entire natural sweeteners category today. A lack of suitable flavor options is now a rare instance. “Cargill’s latest sweetening solution, EverSweet stevia sweetener and ClearFlo natural flavor, offers a more sugar-like experience than other stevia options. EverSweet and ClearFlo deliver an improved sweetness expression and a sweetness profile that is even closer to sucrose. At the same time, it helps manage off-flavors from other ingredients used in formulation, including earthy and beany notes from plant-based proteins, bitterness from caffeine or vitamins, or metallic tastes from minerals. In addition, it enhances characterizing flavor profiles, from light, fruity notes to rich chocolatey tones.”
Several flavor categories have experienced monumental growth in functional beverages over the past 12 months, SPINS reported. The sharpest upticks were experienced by herb and herbal flavors (+527.9%); cherry cola (+383.6%); cream soda (+378.3%); lemonade (+337.3%); root beer (+137.4%); watermelon (+93.6%); strawberry (+75.7%); lemonade with other flavors (+56.5%); blue raspberry (+49.6%); lime (+41.7%), and peach (+36.8%).
The Renaissance Beverage
There’s momentum behind functional beverages that cast a wide net of health claims, and product launches appear to favor novel combinations of add-on ingredients that equip established products with immune or cognitive support claims, for instance.This comes at a time when consumers want to stretch their dollars, said Chychula. Further, many micronutrients have a wide range of functions to bring up on-pack. “There’s lots of opportunity left on the table based on missed connections,” she said.
According to Hughes, “Consumers who turn to sports nutrition products are no longer just avid gym goers but everyday consumers who are turning to products to help them get through the day. As such, they are interested in claims beyond those associated with performance, strength, and endurance, such as products helping to aid digestive health and immunity.”
The key to success for multi-functional beverages is a solid list of branded ingredients on the panel, said Stanieich. “We’re seeing beverages hit the market that offer a blend of branded ingredients that promote a variety of benefits.”
Stanieich noted that Cognizin and Immuse, which offer nootropic effects and broad-range immune support, respectively, are resonating in the beverage space. “The greatest challenge, and also the greatest opportunity we see, is the number of ingredient options that brands and consumers now have access to.”
Energy and Better Headspace
A new wave of energy beverages is emerging for people who want more than a hefty dose of caffeine. Claims about hydration, cognition, and mood, are now as relevant as claims about alertness and concentration.“The influence of natural trends is especially evident in this space, as brands turn to natural sources of caffeine, like guarana and green bean coffee extract, to give consumers an energy boost,” said Saunders at Cargill. “It’s really mirroring what we’ve been seeing on the sweetener side for years.”
Kyowa Hakko recently conducted two in-house consumer surveys, which demonstrated that U.S. consumers feel their concerns are underserved by today’s market of energy drinks. Four in five consumers said it is important to their quality of life to have mental focus, mental energy, and the ability to concentrate, with nearly as many saying the same for clear memory recall and cognitive health.
Next-generation energy beverages must be up to the task of improving cognitive performance, which is a challenging area for most consumers, Kyowa’s survey concluded. More than half of respondents said they often struggle to stay alert for the whole day (58%) or mentally focus on tasks (53%). They struggle in large numbers with a lack of mental clarity (51%), paying attention for more than a minute (45%), and with bad moods (42%).
Consumers said they’d be most concerned about an energy beverage due to the potential for loss of sleep (67%), anxiety (61%), restlessness (59%), energy crash (59%), and jitteriness (58%). On a similar note, effectiveness and safety (89%), taste (92%), purity (82%), natural ingredients (80%), and scientific backing (80%) were top purchase drivers for energy drinks.
“Weekend warriors and gamers want a mental edge to be more competitive. Working parents need help to juggle their career, home, and children without succumbing to mental burnout. Empty nesters and retirees are trying to defy cognitive and behavioral aging,” said Stanieich.
She noted that citicoline, an endogenous chemical, has been linked in human clinical trials to memory improvements in adults with age-related memory impairment, along with improvements in attentional performance, brain energy, motor speed and attention, and has previously been established in a 2006 review as a candidate for therapeutic effects on multiple forms of cognitive impairment, covering symptoms related to memory, behavior, and attention.1-4
Satiety is also relevant to consumers who rely on functional drinks while on the go, said Hughes. “A big area of innovation within the energy drinks market is the use of plant protein for a sustained, natural energy boost,” he said, noting the negative connotations of relying on sugar, caffeine, and taurine.
While tea and coffee pose plenty of technical challenges for specialty ingredients due to the heat of brewing, companies are making breakthroughs. This is the space where mushrooms and adaptogens have been featured prominently.
This year, Host Defense Mushrooms launched MycoBrew Drink Mixes, a range which includes coffee, matcha, cocoa, and mocha drinks fortified with Lion’s Mane for cognitive benefits. Meanwhile, Om launched an Arabica bean coffee that contains 2,000 mg of a complex of Lion’s Mane, Turkey Tail, Cordyceps, and Reishi standardized to 35% beta-glucans, along with 120 mg of naturally-occurring caffeine and Ginkgo biloba.
“Consumers will always have an affinity for the morning cup of Joe, but new flavors and ingredients are propelling rapid growth in both the coffee and coffee creamer categories. There’s been a steady increase in demand for healthier, more functional coffee beverages over the past several years,” said Caputo.
Sodas are another type of beverage where adaptogens are beginning to populate. Notable mentions include: Rowdy Mermaid’s Good Mood Soda, which contains ashwagandha; Perfy’s Superfood Soda with Ashwagandha; and My Muse sodas which combine vitamins A, B, C, and E with Panax ginseng, ashwagandha, and Ginkgo.
For mood benefits, formulators shouldn’t count out magnesium, especially in the L-threonate form which is most bioavailable across the blood-brain barrier. This relatively under-studied form of magnesium was the subject of a clinical trial last year which linked supplementation to memory improvements in 109 adults. Magnesium L-threonate was recently included in a functional sparkling water and powdered beverage launched by Recess, a company that previously only created beverages containing cannabidiol (CBD) as the leading active ingredient.5-6
Hydration clearly has a bigger role to play in today’s functional beverage market, as brands highlight the role of replenishing the electrolytes calcium, magnesium, sodium chloride, and potassium in maintaining feelings of energy. They’re featured in several energy drinks launched within the past few years, including legacy players. Gatorade launched Fast Twitch, a line of energy drinks which combine 200 mg of caffeine with an electrolytes blend. Other notable recent launches include Optimum Nutrition’s Amin.O Energy powdered and RTD beverages, and Nuun Energy’s dissolvable tablets.
Gut Health
With a flood of research into how the microbiome influences various areas of health, experts are heavily invested in developing pre-, pro-, and postbiotic ingredients compatible with the beverage format.For the most part, only spore-forming probiotics are capable of surviving the beverage manufacturing process, while most living organisms will be wiped out by heat and pH. Beverages will serve as an important foothold for the non-living pre- and postbiotic ingredients marketplace, said Jenna Nelson, EpiCor marketing director, Cargill.
“That’s why we’re leveraging Cargill’s extensive experience in formulation to make EpiCor postbiotic more accessible to consumers by incorporating it into a range of products, from chocolate milks to powdered drink sticks, juices, teas, and more,” said Nelson. “Because of its inanimate nature, EpiCor is easy to use in beverages, offering heat, pH, and shelf stability. EpiCor is also backed by more than a dozen published studies, including multiple human clinical trials, which show that EpiCor postbiotic may support immune health and gut microbiome modulation.”
One of the biggest increases in sales within the functional beverage category has been sodas with digestive health claims. This category grew by 196% from $50.1 million to $148.6 million in the past year, according to SPINS. A soda that replaces refined sugars with better-for-you fibers have been well-received. Amid widespread declines in the sales of conventional sodas, Olipop is on track to surpass $200 million in sales five years after its founding. CEO Ben Goodwin reported that giants PepsiCo and Coca-Cola have already expressed interest. Other brands in the limelight include Poppi, Mayawell, Daytrip, and more.
Even Michelle Obama, former first lady known for leading the “Let’s Move!” public health campaign against childhood obesity, is in on swapping out sugar for fiber. She announced in May that she joined a brand called Plezi as a co-founder. The company launched a line of kid’s drinks formulated to have 75% less sugar than most 100% fruit juices, and is fortified with fiber and minerals.
Proteins
Expect protein trends to follow in tandem with those of the broader functional beverages space, said Auke Zeilstra, regional sales office director at FrieslandCampina Ingredients. The company recently launched Biotis Fermentis, a bioactive protein powder that contains whey protein, the company’s Biotis GOS (galactooligosaccharide) and a spore-forming probiotic popularly found in yogurt and other products called L. rhamnosus GG.All three of these proprietary, clinically-substantiated ingredients are co-fermented in order to improve bioavailability, utilizing the company’s know-how gathered over 150 years of yogurt and cheese making. According to internal consumer research, 150 recreationally active athletes who took the ingredient for three weeks widely self-reported improved satisfaction with physical wellbeing (80%) and significantly reduced bloating (60%) compared to baseline.
According to Zeilstra, the added gut-health benefits appeal both to the niche corner of elite athletes as well as active lifestyle consumers. For athletes (90%, according to FrieslandCampina’s internal consumer research), the compounding stressors of chronically high protein and caloric intake, training protocols, and competitions often wreak havoc on digestive health. Meanwhile, many everyday consumers are fixating on gut health as key to overall wellbeing. “This was a trigger for us to look into how we can best operate in this space,” Zeilstra said.
Proprietary production technologies, and revisiting ancient production methods like fermentation through the lens of modern science, will fundamentally change the way proteins taste, look, and perform, he said.
“For Biotis Fermentis, the composition of proprietary ingredients is just one part of what makes this protein what it is. But the reason other companies couldn’t just take this concept and launch it themselves is the production technologies and fermentation methods we use. One would need to be able to handle the co-fermentation of all of these ingredients in a factory setting and keep all bioactive proteins, spore-forming probiotics, and prebiotics intact.”
On the whole, Zeilstra said that Biotis Fermentis is an example of where next-generation protein ingredients are headed. “I strongly believe that the protein category will continue to take a deeper look at established production techniques like fermentation. There’s plenty more to come in that area, and I think that we’ll continue to revisit fermentation and other production techniques with a new scientific understanding.”
Technologies improving the taste and performance of plant-based proteins will enable them to take a bigger share of the market, said Christine Addington, principal technical account manager at Cargill. These technologies are hitting the market at just the right time, as there’s been a steady upward trend in protein inclusion levels.
“Twenty grams of protein is now a common threshold, with some customers aiming for 30 or even 40 grams of protein in a single serving,” said Addington. This poses a major challenge for less-soluble plant proteins, which present sandy, gritty mouthfeel. “Advances in processing technology are finding solutions to the long-standing solubility problem. Groundbreaking products like PURIS 2.0 pea protein, with its enhanced solubility and improved sensory profile, are the key. With PURIS 2.0, we can take protein levels much higher and still create creamy, indulgent products.”
Omega-3s
While the U.S. functional beverages market doesn’t incorporate EPA and DHA omega-3s to a huge extent, these ingredients are emerging for specialty purposes. Advances in microencapsulation will help to account for major technical challenges related to smell, taste, and stability.In a webinar jointly held by the Global Organization for EPA and DHA Omega-3s (GOED) and Mintel, Lynn Dornblaser, director of innovation and insight at Mintel, said that opportunities are emerging. Omega-3 fortification is much more common in foods than it is in beverages, however, vegan alternative beverages, especially in the dairy category, as well as infant and children’s formulas, are prominently featuring EPA and DHA.
A common trait across omega-3 fortified products on the market is direct and simple claims of EPA and DHA content on front-of-pack. “Consumers might not understand the differences between EPA, DHA, ALA, fish oil, and more,” Dornblaser said. Product makers should consider highlighting benefits centered around cardiovascular health, cognitive health, inflammation, and skin health, she suggested.
Another important commonality is that products make note of flavor masking technologies, and a formulation’s ability to prevent fishy burps, Dornblaser said.
The first area in which omega-3 fortified beverages are expanding into U.S. markets are dairy products, as well as plant-based dairy alternatives for both children and adults, with brain support claims leading.
Fairlife Reduced Fat Ultra-Filtered Milk, for instance, contains 100 mg per serving of DHA and comes with a brain health claim on-pack. Additionally, Ripple launched a plant-based milk targeting children’s nutrition, which contains 50 mg of DHA along with choline, prebiotic fiber, and pea protein, with claims about supporting children’s brain development.
Enfamil also launched Enfagrow, a functional beverage designed to complement a toddler’s diet, which also calls out DHA content in the context of supporting brain development. Two key examples for adult consumers include the U.S. launch of Happy Viking, with a line of plant-based protein shakes that include DHA derived from algal oil, as well as the Canadian launch of Vega’s plant-based All-In-One shake, which includes a DHA content claim.
A rule of thumb for launching omega-3 fortified beverages in the U.S. is to keep it simple, Dornblaser said. “Focus on the benefits. Discussing how a product will optimize a person’s health is how you move consumers into new categories. Also, don’t overestimate how much consumers understand what DHA or EPA are.”
References
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