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5 Insights on the Ready-to-Drink (RTD) Beverage Market

The RTD beverage landscape looks radically different from just a decade ago. Soda sales are slowing while water sales are growing, and terms like “craft,” “cold brew,” and “natural energy” have gone mainstream, largely due to Millennials, who continue to drive growth in RTD beverages. And most notably, healthy is becoming an expectation of RTD beverage consumers. 

Addressing Trends

The growth in RTD beverages is being led by better-for-you beverages. This category addresses key trends that we’re seeing in both the beverage and food industries, which include: 

  • Convenience
  • Clean label 
  • Health and wellness

Build Your Own Healthy RTD Beverage

Fortunately, there is a good deal of consensus on what makes a healthy beverage and what consumers want from this category. The first step is choosing a popular base, such as:

  • Coffee
  • Tea
  • Water
  • Juice (fruit or vegetable)
  • Milk (dairy or plant-based)

These bases can also be combined to create a hybrid beverage—for example, a coffee almond milk latte or a tea-juice blend.

Five Insights on In-Demand RTD Beverages

After choosing the base and setting ingredient parameters (like organic, non-GMO, and natural), consider how your beverage can capitalize on these five key insights that reveal what consumers love about RTD beverages:

1. Functional Ingredients

The U.S. remains the biggest market for functional foods, with continued growth and innovation driven by the health and wellness trend. It’s no longer enough for a beverage to simply quench thirst. RTD beverage users want to buy a beverage with a purpose. Popular ingredients include:

  • Vitamins
  • Minerals
  • Probiotics
  • Prebiotic fibers
  • Omega-3 fatty acids
  • Antioxidants
  • Natural energy boosters
  • Botanicals

Just adding one of these can get your product noticed, especially the nutrients most important to consumers like B vitamins, calcium, or probiotics. In the post-pandemic world, consumers more than ever will be looking for functional ingredients associated with immunity, so vitamin C, Omega-3, vitamin D or elderberry are all opportunities to add an immune halo to your beverage.  According to consumer survey by FMCG Gurus in early 2021, 58% of US consumers indicated they would continue to turn to beverages to boost their immune health after the pandemic had passed.A custom nutrient premix is a simple way to add immune-associated nutrient blends to beverages.

2. Less Sugar

Consumers are catching on. They are trying to avoid drinking their calories and are replacing juice and soda with carbonated juice drinks, flavored waters, teas, and coffee drinks. Unsweetened teas and coffee drinks—already favored for their role as pick-me-ups—are getting an extra boost from the low sugar/no sugar trend. In a survey by Mintel, 40% of US consumers claim to check the label for added sugars and the percentage who do so increases as consumers age.2 

3. Carbonation

As consumers transition away from sugary beverages, carbonation is a way to add back some sensory experience and distract from any perception of reduced sweetness or taste. A sparkling juice drink is certainly a more exciting experience than a diluted juice. Likewise, sparkling flavored waters, nitrogenated (“nitro”) coffee, and naturally fizzy kombucha promise added sensory appeal through mouthfeel and the subtle effects on taste perception. Layer in the naturalness of botanicals with the proven efficacy of nutrients and Mintel expert, Alex Beckett, predicts this will accelerate innovation in sparkling water.3  

woman writing in notebook drinking beverage

4. Energy

There’s no denying that Americans want more energy. According to same consumer survey by FMCG Gurus, 30% of US adults indicated the pandemic had made them feel more conscious about their daily energy levels.4

While energy drinks continue to be a significant and growing category, a fresh approach to energy may be what brands need in order to innovate in the highly competitive space. And in fact, RTD coffees and teas are also experiencing tremendous growth. Ways to give consumers the energy they’re looking for include choosing coffee or tea as the beverage base or adding energy-boosting ingredients, especially natural energy sources, such as: 

  • Green tea extract
  • Green coffee extract
  • Guarana
  • Guayusa
  • Yerba mate

Added natural energy is a great opportunity to stack benefits in a hybrid beverage —for example, a drinkable energy yogurt with coffee fruit extract and added protein like Oikos Pro Caffeinated & Cultured Coffee Flavored Dairy Drink which contains 100mg caffeine and 25g of protein.

 5. Protein

Protein is another way to add appeal to RTD beverages. You can use a base naturally rich in protein, like milk, soy milk, or other nuts milks or simply add a protein concentrate or isolate to any base. 

Protein universally carries a positive health association. From satiety benefits, to muscle building and maintenance, 45% of consumers globally turn to protein drinks to boost their overall health.

Next Steps

Now is the perfect time to consider giving your beverage line a healthy refresh! Contact us to see how a custom nutrient premix or protein ingredient can help your beverage succeed. 

Frequently Asked Questions

functional beverage is a drink that provides a beneficial effect beyond basic nutrition. These health and wellness benefits can come from a wide range of bioactive ingredients—from adaptogenic herbs like ashwagandha to MCTs for the keto diet to tryptophan for sleep support.

Some examples of functional beverages are energy drinks formulated with caffeine and B vitamins, sports drinks with added electrolytes and antioxidants, yogurt drinks that have probiotics, and beauty-from-within beverages containing collagen. The functional beverage market continues to grow as more people look for benefits like energy, relaxation, immune support, cognitive support, muscle building, and more.

Protein is an essential nutrient for workout recovery to repair and rebuild muscle after resistance or endurance exercise. The best type of protein for workout recovery is one that contains all of the essential amino acids in the proportion needed by the body. This ensures no amino acid is in short supply, which would hinder the protein synthesis process.

Protein quality is measured by its Protein Digestibility Corrected Amino Acid Score (PDCAAS), with a score of 1.00 indicating a complete protein. Whey protein’s PDCAAS of 1.00 makes it a top choice for workout recovery, which is why it’s so often used in sports nutrition products. Casein, egg white, and soy protein are also very high in quality. 

Even among whey protein ingredients, however, there are some differences that can impact exercise recovery. For example, whey protein isolate (WPI) has benefits over whey protein concentrate (WPC) that include more protein, higher branched chain amino acid (BCAA) content, and less fat and lactose.

Protein powders sold to consumers are regulated by the FDA as dietary supplements under the Dietary Supplement Health and Education Act of 1994 (DSHEA). As with conventional foods, misbranding and adulteration are prohibited in the manufacture of protein powders, and manufacturers are responsible for ensuring product safety and labeling meet the FDA regulations.

For any new dietary supplement ingredient (including a new protein powder), a manufacturer must submit a notification to the FDA for review before the product containing it goes to market. Under DSHEA, structure/function claims (such as “supports healthy muscles”) can be used to describe the benefits of a supplement as long as the manufacturer keeps on file scientific evidence supporting the claim. 


1. FMCG Gurus, COVID-19 Survey: US, February 2021
2. Mintel, Sugar & Alternative Sweeteners: Incl Impact of COVID-19: US, Dec 2020
3. Mintel, The Future of Water, Sports & Energy Drinks, 2021, February 2021
4. FMCG Gurus, COVID-19 Survey: US, February 2021
5. FMCG Gurus, Beverage Trends in 2021, February 2021

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