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As Latin American consumers shift to healthier beverages, these functional beverage trends highlight key opportunities for brands to meet their evolving needs.
The use of functional beverages is growing in Latin America. Consumers are more health aware and are reaching for products that can help them feel their best. Beverage brands have a unique opportunity to support them on their wellness journey.
From plant-based waters to energy drinks, functional beverages are beverages formulated to provide physical or mental benefits beyond basic nutrition. Key characteristics include the presence of bioactive ingredients like electrolytes, probiotics, and certain botanicals that target wellness needs such as enhanced hydration, immunity, or energy.
The global functional beverage market is expected to grow at a 6.7% CAGR to reach $398 billion in 2028.1 Energy drinks lead the market, accounting for nearly one-third of functional beverage sales, while functional and flavored waters are showing the fastest growth (+14.6%).2
In Latin America, functional beverage trends are largely being driven by consumers seeking healthier beverage alternatives (especially to high sugar drinks like soda) to address their weight concerns and overall health.3
44% of Central and South American consumers have increased their functional water/juice consumption in the past six months,4 and in Mexico, 74% of consumers drink functional waters at least weekly.5 Mexican consumers also regularly drink plant-based water (58%) and energy drinks (59%).6
Trending ingredients include vitamins and minerals (which 42% of consumers find appealing in a beverage) and herbal/botanical ingredients (which appeal to 47%).7 The presence of botanicals in a beverage influences the purchase choice for more than two in five consumers.8 The rise of plant-based and natural are key functional beverage trends to know.
For energy drinks, this is showing up as lower sugar formulations with B vitamins, natural sources of caffeine, or bioactive botanicals to deliver a natural energy boost. In functional waters, botanicals are being added for their flavor and health associations, while vitamins and minerals (particularly electrolytes) are popular for their health and hydration benefits.
Transparency and clean labels are becoming more important in Latin America, according to consumer research. Most Central and South American consumers think claims of natural (72%), non-GMO (72%), free from additives (58%), and sustainably sourced ingredients (57%) are appealing in beverages.9
While these claims are appreciated in any type of beverage, they are especially meaningful to health-conscious consumers purchasing a functional beverage. The combination of health and wellness benefits, clean label claims, and low or no-sugar formulations resonates with these consumers.
Considerations when launching new functional beverages in Latin America include ensuring compliance with diverse regulations on ingredient approval, health claims, and labeling. In addition to country-specific regulations like Mexico’s NOM-051 and Brazil’s ANVISA guidelines, manufacturers should be aware of regional trade agreements such as Mercosur.
For innovation strategies, beverage manufacturers can focus on functionality to provide the most in-demand health and wellness benefits—for example, targeting energy and hydration benefits through vitamins and minerals, electrolytes, and botanicals.
Brands can also entice consumers through flavor, whether botanicals, fusion options, or familiar flavors with a twist. Format expansion beyond ready-to-drink to concentrates and powders is another strategy to appeal to more consumers.
These functional beverage trends point to many opportunities to attract the growing number of consumers looking to make healthier beverage choices. Natural and other clean label claims, sugar reduction, transparency about ingredients, functionality, flavor, and format are all exciting product development possibilities to meet today’s needs.
Contact Glanbia Nutritionals to learn more about our functional beverage solutions for your next winning product.