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The functional and fortified beverage sector is no longer a niche space, but one that is driving mainstream demand as consumers increasingly seek products that support health, convenience and lifestyle without sacrificing taste and indulgence. With functional beverages now achieving margins higher than traditional drinks, it is a category that forward-thinking investors will want to be a part of. Ivanka Skrypnichenko, Tetra Pak’s global category manager, explains why there has never been a better time to invest in nutritional and functional beverages.

Opportunities for untapped growth in the food and beverage sector are rare, but when they do arise, they demand swift action. Functional beverage products reached a global volume of 17.4 billion litres in 2023, and the market shows no sign of slowing. The European market for meal replacement products alone is projected to grow by over 7% between 2024 and 2033, to $3.91 billion. Fortified products and food supplements are no longer just the preserve of athletes – consumers across generations are choosing them for immunity, cognition, digestive support and more. Beyond that, the boundaries of products in this category keep expanding – functional drinks provide nutrients, fuel with energy for a day, replace or complement meals and offer flavour/texture experiences.

This reflects a broader shift: today’s consumer is not defined by age or lifestyle, but by mindset. Studies show that over half of global consumers say they are mindful of their well-being and actively seek products that make wellness-related claims. As these health-focused consumers become more interested in transforming their lifestyles, they are turning to meal replacements, special nutrition products and protein shakes that supplement their nutritional needs.

The evolving landscape of functional and fortified products presents a significant opportunity for beverage manufacturers to differentiate and grow. Our experience has shown us that success will lie in identifying unmet needs, understanding evolving consumer priorities and exploring how technology can enable new product formats and experiences. Those able to navigate these shifts stand to gain a meaningful advantage in a fast-moving category.

The profit potential

The business case for food supplements and nutritionally enhanced products is stronger than ever. Research suggests a surge of interest for food supplements and products with nutritional benefits: 74% of consumers look for active claims when purchasing food and drink, and 88% are willing to pay more for healthier options. This demand brings an increase not just in potential revenue, but in potential profitability, with functional beverages achieving margins up to an impressive 800% higher per litre than traditional beverage categories.

For the F&B industry, this presents a compelling opportunity to enhance both growth and return on investment by delivering products that offer clear, tangible value to health-driven customers.

Innovation is key

Consumers are increasingly drawn to products that support, among others, energy, hydration, focus and improved cognition. To meet these wellbeing-focused expectations, producers are innovating to deliver nutrients without compromising product taste, texture or stability, creating a dynamic space for formulation and packaging advancements.

Technologies like precision micronutrient dosing are enhancing accuracy and consistency, especially in protein-enriched products where ingredient behaviour can be complex. Success in this space requires investment and focus on proteins that are pure, soluble, neutral-tasting tasting and stable, key to achieving mainstream appeal.

But while nutritional value, convenience and enjoyment are all key factors, they must be tailored to the market. Our teams have found that tastes and preferences in different geographical locations play a role in consumer adoption. For example, customers in Asia often prefer thicker, smoother and creamier textures, whereas European consumers generally prefer more natural, less processed textures. Meanwhile, in America, sweeter and indulgent textures are more popular.

For RTD products, an enjoyable mouthfeel is often an important factor in whether consumers adopt a product, and so, it should be considered as important as ingredient and flavour combinations. Manufacturers can use science and technical expertise to formulate products with exact flavour profiles and characteristics needed to capture the attention of individual markets.

For businesses, getting the sensory profile right means reducing trial-and-error costs and increasing repeat purchases. Convenience is just as important and has become a decisive factor, particularly for individuals navigating increasingly active and fast-paced routines. Products must integrate seamlessly into consumers’ daily routines. This means formats that are pre-dosed, portable, easy to consume on the go and require minimal or no preparation and clean-up. Whether it’s a protein-enriched drink consumed post-workout, an energy boosting snack between meetings or a nutritional beverage enjoyed during a commute, convenience is a key factor. The more intuitively a product fits into existing habits, the greater its potential for repeat purchase and long-term brand loyalty. Emerging formats like ready-to-drink solutions are designed to meet and exceed these expectations by making daily nutrition accessible for everyone.

As competition in the food supplement and nutrition market intensifies, differentiation is essential. Winning products will combine scientifically supported benefits with convenient, consumer-friendly formats.

From concept to commercialisation

As demand for nutritional drinks accelerates, the opportunity for brands willing to innovate is both clear and commercially compelling. Success will require not just a winning idea – it must be supported by precise formulation and a nuanced understanding of consumer needs across markets.

Partnering with a company with a strong heritage in product development can help reduce the risks of entering a burgeoning market. For forward-looking brands, the chance to lead this growing category is ready to be taken.