Trends: Consumers Want More Functional, Healthy Beverages

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Consumers approach wellness in a holistic view these days. They prefer foods that come are organic and GMO-free, and other clean label cues. This trend is taking over drinks as well as more consumers want functional and healthy beverages.

The Trend for Healthy Beverages

Innova Market Insights, a Netherlands-based company, noted that many consumers are now becoming savvy when it comes to buying their favorite drinks. In 2016, a trend regarding the rising consumption of functional beverages rose to 27.2% from 12.6% in 2012. This means that more people opt for drinks that are fortified with vitamins and minerals or those that contain high amounts of protein for muscle buildup. These drinks are touted for their health benefits. The result is many companies in the US and UK are shifting their focus to healthy beverages to supply the growing demands of the market.

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Aside from functional beverages, there is also a growing trend called “lighter enjoyment” where consumers are opting for alcoholic drinks that have lighter alcohol content and more flavor and texture to reap the benefits of the alcoholic beverage without the need to be intoxicated.

Today’s shoppers are taking health and other wellness-related matters into their own hands, and this has created a niche within the beverage industry to meet the growing demand. There is an increasing number of consumers who are following healthy routines such as training and exercising, so they need a drink to support their lifestyle.

The Effect of The Healthy Beverage Market

So why are many people turning to healthy foods and beverages instead of medicine? People who are not getting their desired results from traditional medicine are trying out health and wellness products. The trend here is an opportunity for companies to innovate their products into functional food and beverages.

This is where personalization of products comes in as people have different preferences when it comes to their health and wellness. For instance, people who follow specific diets tend to avoid specific ingredients in their beverages. So the traditional, one-size-fits-all approach to creating drinks is no longer a reliable concept for manufacturers.


Many shoppers are making more focused and informed buying decisions. They are very mindful of the types of products that they buy.  Aside from the kinds of ingredients, the “why,” as well as the “how” behind the product, is an essential factor in the decision making process of today’s shoppers. This adds another layer of complexity to the food and beverage industry to develop products that will appeal to more educated customers.

Beverages attribute to more than $11 billion in global sales, and these highly competitive functional drinks are slowly creeping up to make up a quarter of the market. In fact, functional and healthy beverages made $3.1 billion in sales last year, and the projections seem to grow more by the year.

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Artificially Sweetened Soda Can Increase Risk Of Stroke And Dementia

Drinking artificially sweetened soda and drinks have many health risks including stroke and dementia. In a study published in the journal Stroke and Alzheimer’s & Dementia, researchers linked the consumption of sodas to the increased risk of dementia and stroke.

The Validity Of The Study On Artificially Sweetened Soda

The long-term observation study involved 2,888 people who provided data since the survey started in 1971.  The researchers found out that those who drank at least one can of diet soda daily are three times more likely to develop Alzheimer’s disease or suffer from an ischemic stroke.

Although the statistics suggest the possible link, many experts still caution people who interpret the results of the study. They noted that while there is an association between soda drinking and such diseases, it does not mean that drinking can cause these conditions to develop.

Other Factors That Can Increase The Risk For Stroke And Alzheimer’s

Some critics have highlighted several flaws in the study citing that if factors such as weight, genes, and diabetes were taken into account, the association with stroke and dementia would disappear. The thing is that defects in the genes, obesity, and diabetes are more likely causes of stroke and dementia than drinking a can of diet soda.  So why arrive at such a correlation? Critics point out that it is probable that the people involved in the study are already suffering from ill health such as diabetes. These patients are more likely to opt for zero-calorie drinks thus influencing the result of the survey.

Experts still suggest that drinking fizzy drinks should be in moderation as drinking too much is attributed to weight gain–a more plausible cause for stroke and Alzheimer’s.

Is It Safe?

Studies involving the harmful effects of soda on health hurt the beverage industry all over the world. In response to the bad publicity, the American Beverage Association issued a statement regarding the safety status of artificial sweeteners as highlighted by international organizations like the World Health Organization, US Food and Drug Administration, and the European Food Safety Authority. Beverage companies claim that the amount of artificial sweetener or any sweeteners for that matter that they use on their products do not go beyond the established limit set by these agencies.

But whether artificially sweetened drinks has some health risks or not, the sales have still declined as consumers are looking for healthier alternatives such as low-calorie and naturally sweetened drinks as well as bottled water.  Surprisingly, the sales of bottled water overtook the sales of fizzy drinks in the United States last year making bottled water the largest beverage category regarding volume consumed per capita.

Another reason why the sales of the sugary drinks industry have declined is the taxes imposed on them discouraged people from buying them. Last year, sales decreased by 21% due to higher tax rates. So regardless of the result of the study linking soda with stroke and Alzheimer’s disease, the industry is struggling with selling a product does have some adverse effects on your health.

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Beverage Manufacturers Leaning Towards More Natural Ingredients

With the continuing rise of “better-for-you” products, beverage companies have incorporated healthy ingredients to their new drinks. Today, the latest trend in the industry is functional beverages.  Functional beverages are defined as refreshing drinks that come with a multitude of health benefits. To incorporate these benefits into their products, beverage brands have used herbal extracts and natural sugars to amplify the nutritional value of the drinks and improve the natural flavor of the beverage.

Diversity in Natural Beverages

Although the use of natural ingredients is on the rise for many beverage companies, the challenge lies on how companies should reinvent flavors. With many fruits and vegetables in their arsenal, it is quite challenging to find great matches for vegetables like cucumber, beets, and carrots. Traditionally, they have worked with different fruits and spices like berries, apples, mint, and ginger.

In today’s society, where modern consumers are empowered with tons of new information connecting their health to the food they eat, consumers have a high affinity towards a healthy diet and a good quality of life. It is the reason why they are not hesitant to spend extra for nutritious foods and beverages. There are also many people who have shifted their diets to vegan and vegetarian. These people follow a particular diet with many restrictions. In the United States alone, the number of vegans and vegetarians continues to rise.

The healthy drink industry has diversified to meet the demands of many clients. Today, you can find healthy energy drinks that are not laden with caffeine, artificial sugar, and other derivatives. Healthy energy drinks are now made up of natural ingredients that are much cleaner and better fo you than traditional energy drink ingredients. Examples of ingredients that are used in creating healthy energy drinks include tea, guarana, and other natural sweeteners. 

healthy beverage fruits vegetables fruve 15 nutrifusion grandfusionThe Effects of  Healthy Beverage Development

So, what is the effect of this shift observed in beverage companies? The use of healthy fruits and vegetables has triggered new impulses regarding drinking such beverages. For instance, beverage companies would never dare to use vegetables in making their drinks. But now, vegetables are the main ingredients in creating healthy drinks and, surprisingly, it provides a harmonious complement with fruits. A fantastic example is a fast growing company called Fruve, with a variety of fruit and vegetable based ingredients, Fruve is developing 15 servings of fruits and vegetables per bottle.

Clean Labeling Trend

As mentioned earlier, the other trend that beverage manufacturers are keen to implementing is clean labeling. Clean labeling encourages companies to become transparent with the ingredients that they use to make their drinks. It emphasizes the customers’ demands to choose products that are made from natural sources. Significant growth is possible in healthy and natural beverage development. It will be interesting to see how the industry players strategize to win this new market share.

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Consumers are Replacing Traditional Breakfast with Nutritional Drinks

The adage “breakfast is the most important meal of the day” is no longer valid today, thanks to the rise in the popularity of performance and nutritional drinks. With the dietary habits of people evolving, many people opt for nutritional beverages as a favorite breakfast item these days.  About 35% of Americans agree that they do not adequately take care of themselves because they live very busy lifestyles and drinking performance drinks has become the norm for breakfast. Research conducted by Mintel indicated that 39% of people consume nutritional drinks every morning as a meal replacement while 48% consume them as part of their daily meals.


What Consumers Think About Nutritional Drinks

About 80% of consumers view nutritional drinks as a guilt-free beverage. Moreover, 69% believe that they are excellent sources of nutrients compared to tablets and pills. Many consumers drink nutritional drinks because they provide a more convenient method for eating whole foods.

Nutritional beverages are marketed very effectively by convincing consumers that they can maintain healthy lifestyles just by drinking them. The functional characteristic of nutritional drinks sets them apart from the rest of the beverages sold in the market.

Senior Food and Drink Analyst at Mintel, Beth Bloom, noted that performance drinks are the epitome of modern drinks as they provide the convenience that can fit the lifestyle and diet choices of the average American. Moreover, as many consumers move away from eating the traditional three meals a day, such beverages, fit in perfectly with their current lifestyle as they are affordable and accessible to many people who live very busy lives.

The Large Market Share of Nutritional Drinks

The favorable attributes of nutritional drinks are the reason why they are gaining a significant market share in the beverage category. Currently, there are now a lot of types of drinks under this category which includes weight loss formulas and sports drinks. Many consumers look for three basic characteristics when buying nutritional drinks including flavor, amount of protein, high fiber content, essential vitamins, and minerals.

Between 2010 and 2015, there was a surge in the sales growth of nutritional drinks of around 67% which is equivalent to $31 billion. Most of the sales come from sports drinks, which the industry growth is pegged at 22% during the same period. Weight loss drinks only have a 5% growth.

According to the Mintel’s Global New Products Database, manufacturers of products such as fruit juices, water, coffee, and tea have used the functional positioning as a platform to sell their goods to the market. Currently, many products have used the value of having functional attributes which are challenging the nutritional drinks in their strategy. Since the competition is very tough, the market has diversified the choices to their consumers. Nutritional beverage manufacturers should focus on promoting and substantiating their products’ efficacy by going for more natural products.

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Taste is Leading Consumer Indicator for Beverages

The rise of lifestyle diseases like diabetes and obesity have created a growing concern for parents and everyone at large to move to beverages that offer more benefits. This migration is what has come to be known as the better-for-you alternatives. It is the direction that the non-alcoholic beverage companies are moving with 90% of the new products they bring to market. However, taste still plays a major role in new product development of healthy alternatives.

Taste + Health = Top Beverages

After recent research by Mintel, it is clear that most people’s choice in non-alcoholic beverages is still primarily driven by taste. The percentage of individuals that prioritize taste above all else stands at a staggering 72% while health or nutritional benefits follow by a far cry at 21%.  The least influential factor for consumer preference according to the study happens to be functional benefits at 12%.

The same research shows that there was a stagnant or decline in sales between 2014-2015 and the saddest part of the story is that this trajectory is synonymous with the findings of the research. Carbonated soft drinks had a 0.1 percent growth, and juices grew by the same margin. The largest hits, however, were dairy milk that fell by 7 percent. On the other hand, beverages like coffee had an 8.7 percent growth and energy drinks had an 8.9 percent growth.

In the report, Mintel indicated that consumer preference was quickly changing and the numbers that stood at 66% for juice drinkers, 64% of carbonated soft drink drinkers and the same for dairy products would soon shift. This was as a result of the more than half of the Americans (67% to be precise) were often buying different or new style beverages. Another 18% indicated that they drink a vast variety of drinks. This goes to suggest that the scope of the non-alcoholic beverage industry is rapidly changing.

There is no doubt that the beverage market is doing all it can to meet the consumer’s need for healthier options. However, flavor and taste are still a big part of why customers prefer different drinks. If the taste is not great, then there is no doubt that the consumers will not even touch it. One of the beverage analysts at Mintel went ahead to state that the vast diversity of products that were available in the market made it much easier for consumers to move on to the next one.

It is true that the better-for-you movement is reshaping the industry, and the sales trends are proving this. However, brands will still have to consider factoring in the flavor factor which is primary as well as function and health.

The Future of Beverages

There has also been an emergence of cross-category beverages that has led to the development of new drinks. They add to consumer preference confusion and makes it also challenging for brands that would like to keep their new customers without polarizing those that have not yet made up their minds.

These varieties continue to diversify the options with 40% of customers being encouraged to purchase a new beverage as long as there is a sample in the store that they could try. The playing field is quite open, and the one brand that can incorporate great taste and health is more than likely going to take over the market.

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Bottled Water is Top Beverage Among Generation Z

For more than a few decades, carbonated drinks and sodas have remained as the number one beverage. In fact in 1998, an average American drank 54 gallons of soda and only 30 gallons of water a year. However, the excessive consumption of soda fueled the country’s rising rates of obesity and type 2 diabetes, and as a result many have shifted to other healthier beverage options. But with the age of Generation Z and Millennials at hand, soda is now being replaced by a pure and unadulterated drink–water.

Bottled Water and Beverage InfographicGen Z and Millennials have been taught to make healthy choices. This is especially true when it comes to choosing beverages. A recent survey conducted by the Beverage Marketing Corporation and Fluent indicated that most Millennials and Gen Z prefer natural drinks like water.

It is important to take note that these generations grew up knowing that soda and sugary beverages are bad for you. This is the reason why many opt to drink water. However, this also creates an opportunity for beverage companies to create healthy drinks to fill in the niche.


Bottled Water Tops the List

It is interesting to know that bottled water tops the list of beverages that gen z and millennials prefer. In the survey, 43% of the correspondents consume water seven times per week while 22% consume it with coffee, milk or tea.

The popularity of bottled water as the healthiest alternative to soda and other flavored drinks is the reason why it became the second most popular drink in the United States. Soda companies are shaking in their boots.

What makes it perplexing is that tap water is also available, but respondents still prefer bottled water. In fact, 20% indicated that they solely drink bottled water instead of tap water due to safety concerns (Flint, Michigan). However, more are willing to drink from the tap as long as it has been filtered with an efficient filtering system.

As more and more people have become conscious about their health, water has become the most favored beverage in the country. Unlike other drinks, water does not contain any calories. It makes sense since we need it to survive.

What’s Next for Bottled Water?

The bottled water industry has fast-tracked since people started drinking more water than soda. In fact, an average American today drinks 58 gallons of water compared to two decades ago. That’s a 20-gallon increase since 1998. So what’s next for bottled water?

Industry experts suggest that the bottled water will surely hold on to the top spot for many years to come. But the question whether people will start drinking from the tap is still uncertain unless they are sure about the source of their water.

The popularity of water as the number one beverage allowed companies to develop their line of flavored water as well as enhanced water to appease the market’s growing need for innovation. However, the concerns for plastic can cause a backlash in the industry, and this is something that water bottling companies need to address.

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