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As the US functional beverage market expands, interest in energy, hydration, and protein is ramping up. Here are some of the claims, flavors, and benefits consumers want most, along with a look at new functional beverage trends and opportunities.
The $50 billion US functional beverage market is forecast to grow at a CAGR of 4.5% from 2022 to 2027, reaching $62 billion.1 Energy drinks lead as the largest functional beverage category at $16.0 billion (accounting for one-third of the market), followed by sports drinks at $12.2 billion.2 While energy drinks continue to show solid growth (est. CAGR +3.2%, 2022-2027), sports drinks are growing even faster (est. CAGR 5.6%).3
| Functional Beverage Type | Sales in Billions (2022) |
|---|---|
| Energy drinks | $16.0 |
| Sports drinks | $12.2 |
| Sports protein RTD and meal replacements | $6.4 |
| Functional waters | $4.1 |
| Dairy alternative beverages | $3.2 |
| Functional juices | $3.2 |
| Functional RTD coffees and teas | $1.8 |
| Functional carbonates | $1.7 |
| Yogurt beverages | $1.2 |
Hydration and energy are driving the consumption of functional beverages. 44% of US consumers had a beverage with a hydration claim in the past three months, while 38% consumed a beverage with an energy-boosting claim, reports Mintel.4 Satisfying thirst and boosting energy are the top two drivers for both energy drinks and sports drinks, as well as for protein RTDs, revealing an unexpected overlap in consumption motivations among today’s consumers.5
Even for sports and energy drinks, more than two in three consumers say they’re influenced by protein claims for these beverages.6 That points to an expanded role for protein in functional beverages. Beverages with protein are more likely to be seen as healthy, with 88% of consumers perceiving protein RTDs as healthy or neutral, compared to only 30% for energy drinks.7 "Great tasting" and "low or no sugar" are important attributes for energy, sports, and protein drinks.8
| Energy Drinks | Sports/Electrolyte Drinks | Protein RTDs |
|---|---|---|
| Great tasting (46%) | Hydrating (64%) | Great tasting (62%) |
| Refreshing (33%) | Great tasting (58%) | High protein (57%) |
| Low/no sugar (32%) | Refreshing (49%) | Satisfying (51%) |
| Satisfying (29%) | Low/no sugar (33%) | Vitamins and minerals (43%) |
| Made in USA (28%) | No added sugar (28%) | Low/no sugar (38%) |
The top usage occasions are "while working or studying" for energy drinks, "breakfast" for protein RTDs, and "after the gym or sports" for sports/electrolyte drinks.9 Energy and sports drinks are the most preferred pre-workout products for sports performance and active lifestyle consumers, with about half using these products.10 Innova reports that Gen Z and Millennials are the generations most likely to be using energy, hydration, and protein beverages to support exercise.11
After energy and sports drinks, protein RTDs make up the next largest functional beverage category. The high protein trend and perception of protein as healthy is expanding usage occasions. Consumers have protein RTDs instead of breakfast, after the gym or sports, instead of another meal, and during breaks at work or college.17 Heavy protein RTD users are the most likely to consume them across a wide range of non-exercise occasions, including on a day out and while reading or using the computer.18
Besides messaging that addresses different usage occasions, ingredient choice is another opportunity. Dairy protein is an important ingredient here since 53% of US consumers prefer milk or whey protein as the protein source in their fortified protein products.19 In addition, protein drink users cited the most appealing flavors as chocolate (64%), vanilla (52%), strawberry (44%), cookies & cream (33%), peanut butter chocolate (32%), and mixed berry (31%), with great tasting as the most important attribute in a protein RTD.20
Beyond the interest in energy, hydration, and protein, there are some product trends showing up across functional beverage categories. These include an expansion of clean label claims—from “natural” to “free of preservatives” to “clean caffeine.” Sugar claims are also on the rise, with “sugar-free,” “no added sugars,” and “no artificial sweeteners” more prominent than ever.
While fruit flavors such as berry, summer fruit, citrus, melon, punch, orchard fruit, and superfruit are the top flavors in sports, fitness, and energy drinks,21 the fastest growing are strawberry, lemonade, orange, and pineapple.22
Bringing together delicious and appealing flavors with the health benefits and nutrition profile today’s consumers are looking for will be an exciting challenge for the industry. Our functional beverage solutions—from proteins to premixes to flavors—and our beverage development expertise and marketing insights can help you meet the challenge. Contact Glanbia Nutritionals to learn more.
A 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.
Dairy is the main source of calcium in the American diet, making it the top food group for supporting healthy bones at all ages. Dairy is also a source of high-quality protein, with all the essential amino acids in the right proportions to meet the needs of the body—especially important for muscle building and maintenance for active, sports performance, and aging consumers. Dairy also contains several beneficial bioactive proteins such as lactoferrin, which supports healthy iron levels.
Dairy alternatives such as plant-based milks and plant-based yogurts are often fortified, making them a good calcium source for those with milk allergies or lactose intolerance. Some are also high in plant-based protein. In addition, both dairy and dairy alternatives are often fortified with vitamin D to improve calcium absorption. Dairy/plant-based milk blends are a trend that combine the high-quality protein of dairy with the phytonutrients and lower calories of plant-based milks.
Plant-based milk is made starting from beans (such as yellow peas or soybeans), nuts (such as almonds or cashews), grains (such as oats or rice), seeds (such as flax or hemp seeds), or another whole plant source. The starting material can either be soaked in water, ground into a slurry, and filtered to remove the insoluble fiber, or it can be ground into flour first before removing the insoluble fiber.
Next, water and other ingredients like flavors, sweeteners, vitamins, minerals, and thickeners are added. Finally, the plant-based milk is pasteurized and packaged. Some (like pea milk) are a good source of plant-based protein, while others (like oat milk) are known for their soluble fiber benefits. Manufacturers can also start with optimized ingredients to minimize any bitter plant tastes and ensure the smoothest texture.
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