As consumer thirst for wellness products continues to deepen, functional drinks are taking up more shelf space at retail and becoming a staple in healthy living.

According to Nielsen IQ (NIQ), functional beverages are becoming a key part of modern wellness routines. Notably, clean label products are outperforming other products with an 8% increase in the last year. “As a result, the functional beverage market is experiencing a surge in popularity, with consumers actively seeking out drinks that align with their health goals and fit seamlessly into their busy lifestyles. This growing demand is encouraging brands to innovate and expand their offerings, further fueling the category’s rapid growth.”

Beyond hydration and electrolytes, brands are fortifying beverages with nutrients and herbal ingredients that can deliver additional benefits like energy, digestive health and immune support, mental clarity, and more.

“In addition to unique ingredients, innovation extends to packaging, flavor profiles, and product formats, making functional beverages more convenient, enjoyable, and accessible,” NIQ noted.

‘Refreshing the Familiar’

The total beverage market, including everything from alcohol to coffee creamer, is about $248 billion, according to SPINS data presented by Alice Mintz, director of brand strategy for the insights firm, at Natural Products Expo West in March.

Driven by shifting lifestyle preferences, among younger consumers in particular, and the rise of the “sober-curious” movement, non-alcoholic alternatives are almost $600 million, growing around 32%, said Mintz. 

Ingredients like kava and L-theanine are being applied to relaxation drinks designed to promote better sleep — “a foundational part of health,” noted Scott Owen, growth solutions manager at KeHE, which identified “Drink Your Health” as a key macrotrend for 2025.

Ready-to-drink protein is growing at 11% as consumers gravitate toward convenient nutrition, said Mintz. “Protein is continuing to persist everywhere.”

Alternative sodas that contain fiber and prebiotics hold about 6% share of the total beverage market, but are driving 27% of growth, noted Mintz. “This is an overcontribution relative to its size; a prime example of refreshing the familiar.”

In March, just weeks after Coca-Cola launched Simply Pop — a functional soda with 6 grams of prebiotic fiber for gut health, plus vitamin C and zinc for immune support —  PepsiCo announced its $1.95 billion acquisition of prebiotic soda brand Poppi. Meanwhile, rival brand Olipop was valued at $1.85 billion in a $50 million Series C funding round.

“More than ever, consumers are looking for convenient and great-tasting options that fit their lifestyles and respond to their growing interest in health and wellness,” said Ramon Laguarta, chairman and CEO, PepsiCo. “Poppi is a great complement to our portfolio transformation efforts to meet these needs.”

Bloom Nutrition, a fast-growing wellness brand, recently introduced Bloom Pop to the better-for-you, functional soda category. With 20 calories and 4 grams of sugar or less, Bloom Pop will debut with Shirley Temple, Raspberry Lemon, and Orange flavors.

“What we do best at Bloom is reimagine wellness essentials with flavor and function,” said Mari Llewellyn, co-founder of Bloom. “Made with a scientifically backed prebiotic and flavor we’ve perfected, Bloom Pop is our answer to what our fans feel the modern soda category is missing: a truly tasty and functional drink.”

The new lineup follows the success of Bloom Sparkling Energy, now in the top 10 energy drinks in the U.S., the company noted.

Speaking of energy, adaptogenic teas and tonics are joining traditional caffeine-infused carbonated options, ready-to-drink coffees, and other functional drink options, said Mintz. Younger generations are looking for authenticity, she noted.

Sustainability and eco-friendly packaging are also major drivers of innovation in the beverage aisle, driven by consumer demand for products that minimize environmental impact, according to NIQ.

“In fact, 69% of consumers state that sustainability is more important to them than it was two years ago,” the company reported. “As the market continues to evolve, product innovation remains a key factor in attracting new consumers and driving category expansion. Identifying the key attributes consumers are seeking and innovating around them may be key to future growth.”

Transparency is more vital than ever, with NIQ data showing that 77% of consumers will quit brands that are guilty of greenwashing.

Hydration for Everyone

Chloe Caan, marketing director for Gatorade, which recently launched Hydration Booster stick packs, said that two-thirds (67%) of all “powder occasions” occur with a reusable vessel. The company sells a variety of reusable bottles on its website along with Hydration Booster, which is available in Citrus Berry, Strawberry Watermelon, and Tropical Mango flavors. The product is Gatorade’s first powder-only SKU with no RTD counterpart.

“In developing this product, we really put the ‘enhancer’ consumer first,” said Caan. “The enhancer consumer tends to skew a bit more female compared to RTD sports drinks, and a bit higher income. In the enhancer set, they’re looking for a convenient way to stay hydrated. They’re looking for added functional benefits like the vitamins that we added. They’re looking for natural alternatives with no artificial (ingredients). So we took all this together and put it in a product that really delivers all-day hydration.”

Many of Gatorade’s competitors, as well as products within its own portfolio, “are designed for the high-heat, high-sweat athletic occasion,” Caan noted. “And so we really wanted to differentiate our product and our consumer base.”

Kurt Seidensticker, who founded Vital Proteins, recently launched a new purpose-driven company, Be Love, intended to redefine hydration and energy. Many hydration products have high sodium content and were intended for use after intense physical activity, Seidensticker noted.

Be Love contains zero sugar, 210 mg of sodium, 45 mg of potassium, and 15 mg of magnesium and comes in three flavors: Citrus Zest, Berry Bliss, and Orange Blossom.

“We looked at the science of electrolytes to develop this product,” said Seidensticker. “Sodium and potassium work together at a lower level closer to what your blood plasma level is.” 

He also discussed the brand’s broader purpose of connecting consumers outside of technology. “The idea behind Be Love is to actually create a movement of connection that’s not digital but actually has purpose behind it.”

“You really need to create something more than just a product. You need to create a movement,” he said. “You need to create something that really propels a consumer to want to buy a product and want to be a part of something bigger.”

Be Love has also partnered with the GivePower Foundation to help bring clean water to communities in need. Each product purchase provides 10 people in need with access to clean, safe drinking water. According to the foundation, over 2.2 billion people worldwide lack access to safe, clean drinking water. “By harnessing sustainable solar energy, GivePower teams use desalination systems to provide access to safe, affordable drinking water around the world.”

Big-Flavor Energy

Last October, Keurig Dr Pepper (KDP) entered an agreement to acquire Ghost, a sports nutrition brand specializing in energy drinks, for more than $1 billion. Ghost’s net sales have more than quadrupled over the past three years, and Ghost Energy has become one of the fastest-growing energy brands.

“The energy category is poised for continued long-term growth, which KDP expects to increasingly capture through our platform-based approach,” said Tim Cofer, KDP CEO. “KDP’s portfolio of complementary energy brands is aligned against distinctive consumer need states, and, together, these offerings will unlock significant growth and scale benefits across our entire (direct-store delivery) portfolio.”

Ghost is known for flavor collaborations and licensing deals, however, Mondelez International ended its partnership with the brand, forcing the company to stop producing fan favorites like Sour Patch Kids, Swedish Fish, Oreo, Chips Ahoy!, and Nutter Butter varieties.   

KDP has its own catalog of flavors Ghost can tap into though, including 7Up, Snapple, Hawaiian Punch, Yoo-Hoo, and of course, Dr. Pepper, among others.

Rival zero-sugar energy drink brand C4, meanwhile, recently kicked off a campaign highlighting its NSF Certified for Sport certification, educating consumers about its dedication to athletic performance and ingredient safety.

NSF Certified for Sport means the product meets safety, quality, and performance standards and contains no unsafe levels of athletic-banned substances. The certification is trusted by top sports organizations, including the NFL, NBA, NHL, PGA, NASCAR, and more.