US Functional Beverage Market Insights for 2020

Why Consumers are Reaching for Functional Beverages

According to Mintel’s report “Nutrition and Performance Drinks,”² consumers who purchase functional beverages do so to satisfy a specific need state. These consumers are primarily seeking to:

• Quench thirst
• Support exercise recovery
• Boost vitamin intake
• Support general health
• Boost energy

Consumers’ functional nutrition goals directly impact their beverage choices. For example, functional beverage consumers looking to quench thirst are overwhelmingly choosing functional waters and sports drinks to meet this need, while those seeking exercise recovery support are reaching for sports drinks and sports performance drinks. 
Nutritional drinks and functional waters are popular choices for those interested in boosting vitamin intake and supporting general health. Energy drinks may be the obvious choice for functional beverage consumers seeking an energy boost, but sports performance drinks are another popular choice.
 

Top Growth Segments in the Functional Beverage Category

While energy drinks may make up the largest share of the U.S. functional beverage market, they’re at the number five position among category growth drivers. According to Euromonitor data, the functional beverage segments forecast to have the highest CAGR between 2018 and 2022 are:

1. Functional carbonates (10.2 percent)
2. Dairy alternative beverages (7.1 percent)
3. Sports protein drinks and meal replacements (4.7 percent)
4. Functional teas and coffees (4.5 percent)
5. Energy drinks (3.5 percent)

Functional Ingredients for Beverages

Functional nutrition is in demand, and beverages offer a quick and easy way for consumers to gain these benefits. Although functional beverages may be best known as go-to sources of performance ingredients (such as protein and amino acids), energy ingredients (such as caffeine and B vitamins), and electrolytes (such as potassium and magnesium), an expansion of ingredient demands is underway. Examples of functional ingredients grabbing the attention of today’s consumers are probiotics, prebiotics, MCTs, omega-3s, and turmeric.

Spotlight on Protein for Functional Nutrition

The mainstreaming of protein, which has been reshaping categories throughout the food industry, is having important effects on the functional beverage market. There’s no doubt that protein has always had a prominent place in sports, nutrition, and performance drinks. But increasingly, protein is expanding throughout the functional beverage market into a variety of product types. 

Protein-fortified waters, juices, coffees, and carbonates are notable examples of this new breed of functional protein beverage that speaks directly to mainstream consumers. While dairy protein remains the preferred protein source in functional beverages, plant-based proteins from legumes, nuts, and seeds continue to gain traction.

Quench Their Thirst for the Perfect Beverage

To address consumers’ diverse and growing interests in beverages with functional nutrition, manufacturers need to ensure they match the right functional ingredient with the right beverage type. To learn more about formulating the perfect functional beverage—with dairy or plant-based proteins, amino acids, vitamins, minerals, and even botanicals. Learn more about Glanbia's solutions for functional beverages here. 

References

1. Euromonitor International. (2020). Data ending 2019.
2. Mintel. (2018). Nutrition and Performance Drinks – US – March 2018. Retrieved from https://reports.mintel.com/display/860317/#