The rise of functional beverages

Already a booming market, the functional beverages sector is expected to gain traction as consumers continue to hone in on the health and wellness benefits they bring to modern-day lifestyles.

According to Kerry, the global functional beverage market was worth $102 billion in 2020, with a predicted CAGR of 3.2% as new functional beverage innovations hit the shelves. As a result, we expect to see more brands blurring the lines between refreshment and functionality as the demand continues to grow, especially amidst the pandemic.

Here, the World Beverage Innovation Awards team takes a look at the top four functional ingredients trending in 2021 and beyond.

Collagen

The global collagen market is projected to reach $6.6 billion by 2025 with an annual growth rate of 6.5%, according to a new report by Grand View Research. Known for its cosmetic health benefits, the ingredient – one of the richest proteins in the body – is set to skyrocket in 2021 as more people look for greater functional health benefits in the products they consume.

Beverages designed to help ‘top up’ natural collagen levels, including Bulletproof Cold Brew Coffee Plus Collagen and Diva’s Beauty Inside Collagen, are increasingly popular. More recently, we have seen a growing interest in the addition of collagen to alcoholic beverages, such as Vodka Nature, a unique combination of naturally crystalline water and precious collagen molecules with vitamin C. This trend is only set to rise as consumers seek beverages that fit into modern life without compromising health, flavour and experience.

Nootropics and adaptogens

A new trend that is starting to take shape within the global functional beverage industry is the use of nootropics and adaptogens. As modern-day drinking culture changes, nootropics and adaptogens offer a solution to those consumers sporting alcohol-free options to focus on a healthier, more natural alternative.

Adaptogens – a term used to refer to traditional herbal remedies like turmeric, elderberry, reishi mushrooms and other powerful compounds – are being infused into beverages to help manage stress levels and maintain a calm and balanced state.   

Nootropic supplements are used to boost cognitive function such as mood, memory, creativity or motivation. And with more consumers seeking natural ingredients, nootropics such as ginseng – known for its antifatigue and immunity properties, as well as boosting energy – offer a natural evolution from energy or stimulation drinks.

As a result, brands are now steering away from caffeine, offering diversity in their flavours and ingredients that appeal and excite while delivering natural functional benefits.   

Botanicals

As consumers continue to focus on health and wellness within their everyday lifestyles, brands are seeking new opportunities to deliver healthy, fun beverage options that incorporate functional ingredients such as botanicals. The global botanical extracts market – which includes all uses for botanicals – is projected to reach $7.59 billion by 2025, growing at a CAGR of 8.7% between 2017-2025, according to Market Watch.

Consumers perceive food and beverage products with botanical ingredients as being premium and healthy while also valuing their taste. Holly McHugh, marketing associate at Illinois-based Imbibe said: “Consumers are taking a more holistic approach to their wellbeing, and some are even looking to botanicals deep-rooted in ancient traditions for their intrinsic health benefits”.

As more people discover the benefits of botanicals, such as energy and immune boosts, healthy skin and improvements in memory and focus, demand for beverage manufacturers to distribute innovative ingredients has grown and new products are expected to appear in 2021 and beyond.

As the rise of no- and low-alcohol increases, we have seen a significant increase in the number of non-alcoholic ‘spirits’ derived from botanical distillates. The appeal for botanical-infused beverages that mimic their alcoholic counterparts comes from the rising trends of wellness, health and moderation. Botanicals offer clean, pure ingredients that don’t compromise on taste, providing the consumer with both transparency, reassurance and shelf appeal.

Finally, brands can sustainably source botanicals using ingredients that would have otherwise gone to waste, offering a product for consumers seeking functional beverages that are not only better for them, but better for the planet. For example, Bombay Sapphire announced that all 10 of its botanical ingredients are on track to be certified sustainable in 2021.

Prebiotics and probiotics

Arguably, consumers are now expecting their beverages to feature a functional aspect. As the trend for better-for-you products continues to thrive, more beverage products are being launched that target consumers’ digestive health concerns.

Prebiotics and probiotics are being utilised by manufacturers to meet this need, most commonly in fermented beverages, like kombucha, kefir and enhanced waters.

According to Kishan Vasani, co-founder and CEO of Spoonshot AI: “We expect probiotics and prebiotics to gain greater traction in the coming year as a means to overall immunity.”

And the reason is elementary: “Consumers are already quite familiar with these ingredients, and there’s growing research to highlight how important gut health is to overall health and wellness,” Vasani continued. “As such, it won’t be difficult to convince consumers that probiotics and prebiotics can play an important role in their overall immunity.”

Brands jumping on the trend include Molson Coors’ new non-alcoholic HUZZAH Probiotic Seltzer and Biomel’s dark chocolate dairy-free probiotic drink. As consumers become more aware of the importance of gut health, we expect to see more functional beverage innovations incorporating prebiotics and probiotics this year and beyond.

Have you recently launched, or in the process of launching a functional beverage? Enter your innovative products into the ‘best functional beverage’ category in this year’s World Beverage Innovation Awards 2021 now!