Creating a Functional Beverage for the 2023 Consumer

Creating a Functional Beverage for the 2023 Consumer

Consumers are reaching for functional beverages for energy, sleep support, immune health, and more. Learn how to create functional beverages for the 2023 consumer that deliver on health and great taste.

2023 Functional Beverage Market Overview and Growth Forecast

The $182.7 billion global functional beverage market is expected to grow 6.4% between 2021 and 2026 to reach $249.5 billion, according to Euromonitor.1 Asia Pacific makes up the largest market for functional beverages, followed by North America, while Latin America (9.5%) and Eastern Europe (9.3%) have the highest growth rate.2

The $50 billion US functional beverage market, which is forecast to grow at a CAGR of 5.8%, accounts for 27% of global sales.3 Energy drinks and sports drinks are the most popular functional beverages in the US, with sales of $18.2 billion and $11.3 billion, respectively.4 The fastest-growing segments, however, are dairy alternative beverages at 9.2% and functional waters at 8.4%.5

“Functionality has been the most important driver to innovation in the non-alcoholic beverages market for years, and consumer demand for drinks with added benefits has only increased during the pandemic.” -Karen Formanski, Health and Nutrition Analyst, Mintel

Top Functional Benefits Consumers Seek in a Beverage

Datassential reports that 80% of US consumers are interested in functional beverages, with 42% very or extremely interested.6 Energy is the attribute the most consumers are interested in (45%), followed by sleep support (40%) and stress reduction (40%).7 Consumers have experienced a variety of day-to-day challenges arising from the COVID pandemic that have brought these needs to the forefront.

Which functional health benefits in a beverage are you interested in? (top 10 answers)

Energy 45%
Sleep Support 40%
Stress reduction 40%
Heart Health 37%
Immunity 37%
Weight management 36%
Bone/joint health 33%
Longevity 31%
Gut/digestive health 31%
Anti-inflammatory 28%
Source: Datassential, Functional Beverages, February 2021, Base = 993 US consumers
man drinking water

Popular Functional Beverage Ingredients

Fortifications for functional beverages range from vitamins and minerals that address nutrient shortfalls to trending ingredients like adaptogens and nootropics, whose potential health benefits are still being explored. Combinations of functional ingredients can also be added through an off-the-shelf or custom premix. This is an easy way to turn any beverage into an energy or sleep support beverage, for example.

Today's most popular categories of functional ingredients include: 

  • Vitamins
  • Minerals
  • Antioxidants
  • Prebiotics
  • Probiotics
  • Omega-3 fatty acids 
  • Amino acids
  • Herbs and herbal extracts
  • Tea and coffee extracts
  • Superfruit extracts

Although formulating with functional ingredients addresses consumers’ demand for beverages with benefits, repeat purchase is largely driven by taste. This makes it essential to find a delicious way to deliver those health benefits. Among US sports and performance drink consumers, 55% say flavor is important—ahead of low/no sugar (43%) and vitamin/mineral content (40%).8

How to Flavor a Functional Beverage

Functional beverages have unique flavor challenges in overcoming the often bitter or unpleasant tastes of functional ingredients. One useful technology is microencapsulation, a process that coats the ingredient particles (often with an oil or edible wax) to mask their taste and odor. Another option is the use of flavor maskers, which includes bitter maskers.

A functional beverage can also be formulated with flavors that naturally contain bitter notes (such as coffee, chocolate, or grapefruit) to work with the ingredients rather than against them. Another approach is to choose bold flavors that can mask the off tastes of functional ingredients. This can mean spicy flavors (like ginger or cayenne) or sweet, indulgent flavors (like caramel macchiato or maple).

sweet drinks

2023 Flavor Trends in Functional Beverages

US functional beverage launches show the continued popularity of mainstream flavors, with strawberry, orange/sweet orange, lemonade/lemon, and vanilla/vanilla bourbon leading as the top category flavors.9 However, some emerging trends include an expansion in tropical flavors for energy drinks and nostalgic flavors like classic root beer and orange cream for functional carbonates.

In the meal replacement drink segment, where there has been little shift in flavor launches in the past five years, Mintel reports 30% of consumers would like to see more flavor variety.10 Meanwhile, a few brands are introducing nostalgic and dessert-inspired flavors such as Girl Scout cookie and butter pecan in their meal replacement and nutrition drinks.

Expanding beyond mainstream flavors will be a key strategy in grabbing consumers’ attention in the functional beverage category. Functional beverage flavor trends on our watch list include botanical flavors (e.g., basil, sage, and cardamom) and an expansion in tropical flavors (e.g., guava, jackfruit, and Asian pear). We also expect floral flavors (e.g., elderflower, hibiscus, and rose) to maintain their presence, and fruit varietal flavors (e.g., blood orange, Sicilian lemon, and Tahitian lime) to pick up speed.

The Taste of Success

Whether a beverage offers a tropical adventure or nostalgic indulgence, consumers are always on the lookout for a healthy beverage that tastes great. Functional beverage manufacturers may have some unique flavor challenges, but there are a variety of solutions available to achieve a winning product.

For beverage manufacturers looking to stand out in the functional beverage market, using a supplier with a wide range of functional beverage solutions, including custom premix  and flavor solutions, makes it easy. Contact us to discuss creating a functional beverage that appeals to today’s consumers.


1-5. Euromonitor, 2022. Data ending 2021.
6-7. Datassential, Functional Beverages, February 2021.
8. Mintel, Sports and Performance Drinks – US – February 2021.
9. Mintel GNPD, 2022. Data ending 2021.
10. Mintel, Nutrition Drinks – US – 2021. 

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