Functional Beverages: Market Trends and Opportunities, 2nd Edition

Functional Beverages: Market Trends and Opportunities is the go-to source for a complete understanding of U.S. consumer trends regarding functional beverages. This report combines extensive monitoring of the food and beverage market with proprietary surveys, and evaluates current trends and future directions for marketing and retailing, along with consumer patterns during the pandemic and inflation area and across the broader food and beverage market.

Functional beverages purport to provide functional benefits that consumers perceive as important to health or day-to-day life, such as:

increased energy
enhanced hydration
boosts in cognitive function/brain activity
better sleep and relaxation
boosts in immunity
increased gut health
meal replacement and weight management
sports performance improvement

Functional beverages are appealing to those who want to make small changes for big results. Consumers also increasingly want and expect products with “better-for-you” attributes that are perceived as more nutritious or healthful. “Better-for-you” traits seen in many functional beverages include clean labels, natural/organic ingredients, reduced or eliminated sugar and calories, and vegan/plant-based designations.

With a focus on “what’s next” and current consumer trends, Functional Beverages: Market Trends and Opportunities is packed with insights about consumer trends, behavior, and motivations to help beverage producers, retailers, packaging companies, employers, and investors gauge consumer perspectives and find areas for growth in a competitive market.

Functional Beverages: Market Trends and Opportunities delivers actionable predictions and recommendations designed to guide producers, retailers, and investors in making business decisions by providing data and insights about consumer behavior and what consumers think about these products.

Scope

This report analyzes the dynamics of the current landscape of the functional beverage market. Consumer demographics, perceptions, motivations, and behavior pertaining to beverages and attitudes on food, diet, health, and product packaging are taken into account. Effects of the COVID-19 pandemic on consumers are also analyzed in a broad sense, as well as in the context of seeking out functional beverages.

Functional beverages are segmented by the following product categories:

Energy and Sports Drinks
Functional Carbonated Drinks
Functional Coffees and Teas
Functional Dairy and Dairy Alternative Beverages
Functional Juices
Functional Waters
Nutritional Shakes, Protein Drinks, and Meal Replacements
Other Functional Beverages

Sales include both ready-to-drink (RTD) versions that are bottled or canned and beverage powders. This report also includes functional dry coffee and tea that are brewed with water to become functional beverages.

This report includes sales of the above items from:

Grocery stores, supermarkets, and discount grocers (e.g., Kroger, Safeway, ALDI)
Mass merchandisers (e.g., Walmart, Target, Meijer) and warehouse clubs (e.g., Costco, Sam’s Club, BJ’s)
Convenience stores (e.g., Pilot/Flying J, Circle K, 7-Eleven) and dollar stores (e.g., Dollar General, Family Dollar)
Other retailers, such as gift stores
All online outlets, including online-based grocers (e.g., Amazon, Thrive Market, FreshDirect, Boxed), third-party pack-and-deliver companies that use their own workforces to purchase groceries at various stores and deliver them to customers (e.g., Instacart), brands that sell their own food products via their websites, direct-to-consumer, and online sales from websites or apps of retailers in the previous categories

Historical numbers for the retail functional beverage market are provided from 2017 through 2022. Market forecasts are provided from 2023 through 2027.

The reasons for and implications of shifts in consumer perception and behavior are analyzed in the context of future market opportunities.

Additionally, Functional Beverages: Market Trends and Opportunities has dozens of tables highlighting numerical survey data on consumer demographics and psychographics and numerous marketing photographs. This report goes in-depth on COVID-19 and inflation trends that have affected the food and beverage market.

1 Executive Summary

Recent Trends in Adoption and Innovation
Key Consumer Trends
Packaging Trends
Scope

2 Recent Historical Trends from the Pandemic to the Inflation Era

Highlights
First Time Use of Online Grocery Shopping and Restaurant Ordering Methods In 2020
Table: Coronavirus Food Ordering Habits: "Because of the coronavirus, I have for the first time used…", 202
Boosted Online Grocery Shopping Activity
Activity Spiked in 2020 during the Early Part of the Pandemic
Table: Coronavirus Food Purchase Habits: "Because of the coronavirus, I am…", 2020-2021 (percent of consume
Many Consumers Continued Ordering More Groceries Online in 2021 and 2022
Frequency of Grocery Shopping in 2023: In-Person vs. Online
Snacking and Healthy Eating Habits
Trends from 2021-2022
Table: Coronavirus Eating Habits: "Because of the coronavirus, I am eating more…", 2021 (percent of consume
Changes to Snacking Habits in 2023
Table: Current Snacking Activity Compared to Pre-Pandemic Levels, 2023 (percent of consumers)
Preferred Types of Snacks
Table: Preferred Types of Snacks, 2023 (percent of consumers)
Concerns about COVID-19 Exposure Have Remained
Most Still Consider the Pandemic a Health Threat Personally or to Family/Friends
Table: Coronavirus Health Concerns: "I am concerned about the…", 2020-2023 (percent of consumers)
Concerns about COVID-19 Variants
Concerns about Future Potential Pandemic Outbreaks
Table: Future Potential Pandemic Outbreak Concerns, 2023 (percent of consumers)
Rising Prices during the Pandemic
Many Consumers Are Concerned about Inflation and Rising Food Prices
Table: Consumer Concerns about Rising Food Prices, 2021-2023 (percent of consumers)
The Vast Majority of Consumers Have Noticed the Rising Cost of Food, and Many Are Changing Their Pur
Consumers Find Price More Important for Food and Beverage Purchase Decisions in 2023
Cutting Back on Household Expenses
Table: Consumers Cutting Back on Household Expenses in the Last 12 Months, 2022 (percent of consumers)
Table: Types of Household Expenses Cut Back on in the Last 12 Months, 2022 (percent of consumers)
Table: Consumer Spending on "Extras", 2023 (percent of consumers)
Food Shortages during the Pandemic
Concerns about Food Shortages
Table: Consumer Concerns about Food Shortages, 2021-2022 (percent of consumers)
Stockpiling of Food and Beverage Items
Table: Consumer Stockpiling of Food and Beverage Products, 2022 (percent of consumers)
Negative Personal Effects of the Pandemic
Negative Effects Reported in 2020 and 2021
Table: Coronavirus Concerns: "The coronavirus has negatively affected my…", 2020-2021 (percent of consumers
Continuing Mental and Physical Health Effects
Stress Levels and Impact on Food/Beverage Consumption
Pandemic Effects on Work
Changes to Work Patterns Have Continued in 2021 and 2022
In-Store Shopping Patterns

3 Overview and Market Trends

Highlights
The COVID-19 Pandemic Was the Jumpstart the Online Grocery Market Needed
Impact on the Beverage Market
Concerns about Food Waste
Most Consumers Are Concerned about Food Waste
Table: Levels of Concern about the Environment and Sources of Food Waste, 2022 (percent of consumers)
How Consumers Reduce Food Waste
Opportunities for Functional Beverages
Food Intolerances, Food Allergies, and Dietary Restrictions Are a Concern to Many Consumers
Prevalence in 2022
Rising Rates of Reported Food Allergies and Lactose Intolerance over Time
Table: Food Allergies and Lactose Intolerance, 2017-2022 (percent of consumers)
Purchases of Foods with Allergy-Friendly Labels
Many Consumers Purchase Allergy-Friendly Foods for Reasons Other Than an Allergy or Intolerance
Plant-Based and Plant-Forward Trends
Definitions
Plant-Based Eating and Sustainability Are Buzzwords Important to the General Public
One-Fourth of Consumers Claim to Primarily Follow a Flexitarian Diet in 2022
Nutrients, Ingredients, and Desired Health Benefits Sought by Consumers
Functional Health Benefits
Consumers Continue to Seek Out Nutrient Sources in Foods and Beverages
Table: Preferences for Functional Food and Beverage Ingredients, 2022 (percent of consumers)
Table: Looking for/Preferring or Never Hearing of Functional Food and Beverage Ingredients, 2021-2022 (perc
Sources Used to Consume Nutrients
Consumers Report Increasing Consumption of Protein from Poultry and Whole-Plant Sources
Avoiding or Limiting Sugar Intake
Reasons for Avoiding or Limiting Sugar Intake
Sugar Continues to Be Preferred Over Low/No-Calorie Sweeteners
Table: Preferences for Sweetener Types, 2022 (percent of consumers)
Many Sweeteners Are Considered Unsafe by Consumers
Avoiding or Limiting Sodium
Information Consumers Seek Out on Nutrition Facts Labels
Mindful and Intuitive Eating
Definition
Dieting Activity
Frequency of Feelings and Behaviors Associated with Mindful and Intuitive Eating Patterns
Consumer Mindfulness Index

4 Market Size and Forecast

Highlights
Scope
Functional Beverage Sales
Sales by Product Category
Table: Functional Beverage Retail Sales by Product Category, 2017-2022 (million dollars)
Table: Functional Beverage Retail Sales by Product Category, 2022, 2023E, 2024P-2027P (million dollars)
Consumer Beverage Purchases
Types Purchased
Table: Beverage Types Purchased by Consumers, 2023 (percent of consumers)
Frequency and Source of Purchases
Table: Frequency and Source of Ready-to drink Packaged Beverage Purchases in the Last 12 Months, 2023 (perc
Consumer Preparation of Drinks at Home

5 Marketing Trends and Opportunities

Highlights
"Superfoods", "Adaptogens", and "Food as Medicine"
Hemp and CBD
Brain Health, Cognitive Function (Nootropics), and Mental Focus
Sleep, Relaxation, and Stress Relief
Dealing with Sleep Issues
Promoting Relaxation and Stress Reduction
The Role of Alcoholic Beverages and Non-Alcoholic Alternatives
Energy and Sports Functions
Immunity Boosting and Gut Health
Meal Replacement and Weight Management
Some Consumers Engage in "Cleanse" and "Detox" Diets or Intermittent Fasting to Boost Immunity, Mood
Opportunities to Interest Older Consumers in Functional Beverages
Targeting Families with Children
Beverages for Kids
Beverages for Parents
Opportunities to Target Gamers
"Better-for-You" Trends
Clean Label
Unrefined Sugar
Sugar-Free/No Sugar Added Products and Alternative Sweeteners
Low-Carb/High Protein, Keto, and Paleo Diets
Vegan/Plant-Based Products Appeals to Those Looking to Eat a Plant-Forward Diet
Organic and Non-GMO Products
Dairy and Dairy Alternatives
Carbonated Soft Drinks
Energy and Sports Drinks
Enhanced Waters
Tea
Coffee
Juice
Personalized Nutrition
Direct-to Consumer (DTC) Marketing
New Companies and Products with Niche Appeal May Choose DTC Channels
Subscriptions Save Consumers Money and Boost Sales
Private Labels
In-Store Purchasing Trends
Retail Stores Rely More On Impulse Purchases
Private Label Products Are a Driver of Store Traffic and Retailer Loyalty

6 Consumer Demographics

Highlights
Purposefully Seeking Out Functional Beverages, and Willingness to Pay More for Them
Table: Consumers Opinions on Functional Beverages, 2023 (percent of consumers)
Trends by Gender
Table: Seeking Out and Willingness to Pay More for Functional Beverages by Gender, 2023 (percent of consume
Trends by Age Bracket
Table: Seeking Out and Willingness to Pay More for Functional Beverages by Age Bracket, 2023 (percent of co
Patterns Based on Household Income
Table: Seeking Out and Willingness to Pay More for Functional Beverages by Household Income Bracket, 2023 (
Regional Differences
Table: Seeking Out and Willingness to Pay More for Functional Beverages by US Region, 2023 (percent of cons
Urban, Suburban, and Rural Consumers
Table: Seeking Out and Willingness to Pay More for Functional Beverages by Urban, Suburban, or Rural Living
Educational Attainment
Table: Seeking Out and Willingness to Pay More for Functional Beverages by Educational Attainment, 2023 (pe
Presence of Children in the Household
Table: Seeking Out and Willingness to Pay More for Functional Beverages by Presence of Children in HH, 2023
Race/Ethnicity
Table: Seeking Out and Willingness to Pay More for Functional Beverages by Race/Ethnicity, 2023 (percent of
Plant-Forward Consumers
Table: Seeking Out and Willingness to Pay More for Functional Beverages by Primary Diet/Eating Philosophy,
Online Grocery Shoppers (Food Delivery and Pickup Services)
Table: Seeking Out and Willingness to Pay More for Functional Beverages by Shopping Online for Groceries in
Clean Label Dieters
Table: Seeking Out and Willingness to Pay More for Functional Beverages by Adherence to a Clean Label Diet,

7 Consumer Psychographics

Highlights
Special Eating Restrictions or Preferences
Table: Extent to Which Consumers Report Following a Special Diet, 2023 (percent of consumers)
Table: Special Diets Followed by Consumers, 2023 (percent of consumers)
Levels of Stress, Anxiety, Tiredness, Loneliness, Energy, and Focus
Table: "Please rate how you currently feel in these areas (stress, tiredness, anxiety, loneliness), compare
Table: "Please rate how you currently feel in these areas (stress, tiredness, anxiety, loneliness), compare
Perceptions About Health and Nutrition
Concerns About Health Can Be Addressed by Functional Foods and Beverages
Table: Health Concerns That Can Be Addressed by Functional Beverages, 2023 (percent of consumers)
Nutrition and Healthy Foods
Table: Opinions about Healthy Foods and Nutrition, 2023 (percent of consumers who agree)
Vitamins/Supplements and Alternative Medicine
Table: Opinions about Alternative Medicine and Vitamins/Supplements, 2023 (percent of consumers who agree)
Table: Taking Vitamins or Supplements, 2022 (percent of consumers)
Table: Reasons for Taking Vitamins or Supplements, 2022 (percent of consumers who take vitamins or suppleme
Opinions on Sweeteners, Calories, and Sugar Content
Table: Consumer Opinions on Sweeteners, Calories, and Sugar Content by Gender and Age Bracket, 2022 (percen
Influences on Food/Beverage Consumption or Shopping Choices
Opinions on Sustainability

8 Packaging Trends

Highlights
The Balance Between Effective, Sustainable, and Low-Cost Packaging
Protective Packaging Is Important For Product Integrity
Retail-Ready Packaging Promotes Stocking Efficiency in Stores
Consumer Insights on Recycling, Household Waste, Sustainability, and Packaging
Functional Beverage Connection
Recycling and Household Waste
Table: Consumer Opinions on Recycling and Household Waste, 2023 (percent of consumers who strongly agree)
Access to and Use of Curbside/Residential and Drop Off Recycling Services
Table: Consumer Access to Curbside/Residential and Drop Off Recycling Services, 2023 (percent of consumers)
Table: Consumer Frequency of Using Curbside/Residential and Drop Off Recycling Services, 2023 (percent of c
Opinions on Packaging Materials
Table: Consumer Opinions on Packaging Materials, 2023 (percent of consumers who strongly agree)
Sustainable/Eco-Friendly Packaging Types Consumers Look for
Table: "Do you especially look for any of the following in terms of "sustainability" or "eco-friendly" pack
Packaging Types Considered Eco-Friendly
Table: "Which packaging types would you consider eco-friendly?", 2023 (percent of consumers)
Priorities Placed on Food Packaging Features
Table: Priorities Placed on Packaging Features for Food Products, 2023 (percent of consumers)
Priorities Placed on Ready-to-Drink Beverage Packaging Features
Table: Priorities Placed on Packaging Features for Ready-to-Drink Beverages, 2023 (percent of consumers)
Opinions on Food Packaging
Table: Consumer Opinions on Food Packaging, 2023 (percent of consumers)
Opinions on Beverage Packaging
Table: Consumer Opinions on Beverage Packaging, 2023 (percent of consumers)
Beverage Packaging Forms that Consumers Purchase
Table: Forms of Beverage Packaging Purchased by Type of Beverage, 2023 (percent of consumers purchasing eac

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Scope

Functional beverages are segmented by the following product categories:

This report includes sales of the above items from:

Table of Contents

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