Providing the most comprehensive and up-to-date information and analysis of the US Functional Drinks Consumer market including the behaviors, preferences, and habits of the consumer.

73% of adults consume drinks promoting some type of added functional benefit – a number that has risen compared to a year ago – despite the often premium price points of these products. In 2021, functional drinks remain well positioned to provide convenient wellness solutions in times of disrupted schedules and still heightened concerns over immunity. As fears of COVID-19 lessen and consumers return to prepandemic routines, it will be important to innovate and expand the number of benefits offered in order to keep current users engaged and invite new users to the category as well – especially adults aged 55+, who remain the biggest area of opportunity for this loosely defined market.

Read on to discover more about the US Functional Drinks consumer market, read our COVID-19 Impact on Food & Drink: One Year Later 2021 report, or take a look at our other Drinks Market research reports.

Quickly understand

  • The impact of COVID-19 on consumer behavior and the functional drinks market.
  • Importance of balancing functionality and value.
  • Need to expand bandwidth to include older adults.
  • The overall functional drinks market.
  • Health drink trends.
  • Innovations and expansions continue to blur brand and category lines.

Covered in this report

Brands include: Dram Apothecary, Sol-ti, LIving Beverages, Ensign Beverage Company, Nuun, Numi Organic, Vahdam India, Driftwell, Nestlé Pure Life Revive, Water Joe, PepsiCo, Perrier, Ocean Spray, Soulboost, Bai Boost, Suja, Rowdy Mermaid, Brew Dr, Health-Ade, KeVita, Olipop, Poppi, Culture Pop, SkinTē, Moment, Marz Brewing, Heywell, LIFEAID, Vital Proteins, Koia.

Expert analysis from a specialist in the field

This report, written by Karen Formanski, a leading analyst in the Health and Nutrition sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Functionality has been the most important driver to innovation in the non-alcoholic beverages market for the past decade, and consumer demand for drinks with added benefits has only increased during the pandemic. The number of adults consuming drinks with functional claims has risen over a year ago, as has the number of benefits consumers are getting from these products. Brands that expand to offer options with benefits that appeal to a wider range of shoppers – especially older adults – will have the best chance of standing out in an increasingly competitive and blurry space.

Karen Formanski, Health and Nutrition Analyst

Karen Formanski

Health and Nutrition Analyst

Table of Contents

  1. Overview

    • What you need to know
    • Key issues covered in this Report
    • Definition
    • COVID-19: US context
    • Economic and other assumptions
  2. Executive Summary

    • Top takeaways
    • Market overview
    • Impact of COVID-19 on functional drinks
      • Figure 1: Short-, medium- and long-term impact of COVID-19 on functional drinks, July 2021
    • Opportunities and challenges
    • Functional drinks landscape is growing, has room for expansion
      • Figure 2: Consumption of drinks with select benefit claims – Any functional benefit, by gender and age, 2021
    • Give consumers more ways to benefit from beverages
      • Figure 3: Consumption of drinks with select benefit claims, 2021
    • Introduce functionality via familiar formats
      • Figure 4: Interest in functional drinks by type, 2021
    • Emphasize efficacy and value
      • Figure 5: Motivating features, 2021
  3. The Market – Key Takeaways

    • All beverages can be more functional
    • Price an obstacle to even more growth
    • Break the age barrier
    • Sustainable is the next functional
  4. Market Perspective

    • Seeking creative paths to success in murky waters
      • Figure 6: Functional/Plus claims in new product launches – Non-alcoholic beverages*, 2016 and 2020
      • Figure 7: Functional claims in new product launches – Non-alcoholic beverages*, by subcategory, 2016 and 2020
  5. Market Factors

    • Strike the right balance of functionality and value
      • Figure 8: Consumer perception of non-alcoholic beverages – With and without functional claims, July 2021
      • Figure 9: Consumer confidence and unemployment, 2000-21
    • Refocus some energy on the older population
      • Figure 10: Population by age, 2014-24
    • Sustainability claims can add incentive for categories’ top users
      • Figure 11: Ethical claims in non-alcoholic beverage launches, 2016 and 2021
      • Figure 12: Functional drink brands with sustainable packaging: Dram Apothecary and Sol-ti
  6. Companies and Brands – Key Takeaways

    • Entice consumers with familiar functionality
    • Brands expand to keep up with demand
    • Support healthy aging across lifestages
  7. Competitive Strategies

    • Merging functional with familiar
    • Rising tide of functional waters
      • Figure 13: Enhanced water examples: Driftwell, Nestle Pure Life, Water Joe
    • Juice aims to refresh its image with added functionality
      • Figure 14: Juice with added benefits – Ocean Spray, Bai, Suja
    • Extend bandwidth with new functionalities and formats
    • Enhance digestive support with additional benefits
      • Figure 15: Kombucha with added benefits – Rowdy Mermaid, Brew Dr, Health-Ade
    • Present the gift of guilt-free or low-guilt BFY soda
      • Figure 16: Soda with added digestive benefits – Olipop and Poppi
  8. Market Opportunities

    • Expand consumer base via healthy aging support
      • Figure 17: SkinTē Collagen Sparkling Tea
    • Position botanical beverages as healthy stress relievers
      • Figure 18: Moment Botanical Water
    • Reward brand ambassadors
  9. The Consumer – Key Takeaways

    • Need to grow beyond youthful core audience
    • Expand on offerings to please diverse consumer needs
    • Introduce emerging ingredients alongside the familiar
    • Beverage blurring may be key to increased functional beverage trial
    • Don’t underestimate the power of testimonials
    • Present functional drinks as refreshing VMS substitutes
  10. The Functional Drinks Consumer

    • Targeted marketing is key for continued expansion
      • Figure 19: Consumption of drinks with select benefit claims – Any functional benefit, 2021
    • Reach out to older adults, women with targeted functionality
      • Figure 20: Consumption of drinks with select benefit claims – Any functional benefit, by gender and age, 2020 and 2021
  11. Benefits and Frequency of Functional Drinks Consumed

    • Address both shorter- and longer-term benefits for future growth
      • Figure 21: Consumption of drinks with select benefit claims, 2021
    • Pair healthy aging benefits with superior hydration
      • Figure 22: Consumption of drinks with select benefit claims, by age, 2021
    • Parents’ focus on health supports the market
      • Figure 23: Consumption of drinks with select benefit claims, by parental status, 2021
    • More than half of adults drinking in multiple benefits
      • Figure 24: Repertoire of functional drinks consumed, 2021
      • Figure 25: Repertoire of functional drinks consumed, by age, 2021
    • Reinforce the long-term benefits of regular use
      • Figure 26: Frequency of consumption of drinks with select benefit claims – At least weekly, 2021
      • Figure 27: Frequency of consumption of drinks with select benefit claims, 2021
  12. Functional Ingredient Usage

    • Look to VMS space to guide product positioning
      • Figure 28: Consumption of drinks with select functional ingredients, 2021
    • Getting to know you: education needed on emerging ingredients
    • Explore the untapped potential of herbals/botanicals: adaptogens, nootropics and CBD
      • Figure 29: Consumption of drinks with select functional ingredients – Adaptogens, nootropics, CBD, by age and gender, 2021
    • Sipping the fat: Omega-3s, collagen and MCT oil
      • Figure 30: Consumption of drinks with select functional ingredients – Omega-3 fatty acids, collagen, MCT oil, by age and gender, 2021
  13. Functional Drinks Behavior Changes

    • Use testimonials to increase trial along with occasions
      • Figure 31: Functional drinks behavior changes, 2021
  14. Use/Interest by Functional Drink Type

    • Cross beverage category lines to cast widest net
      • Figure 32: Use/interest in functional drinks by type, 2021
    • Blend functional with familiar to attract older consumers
      • Figure 33: Use/interest in select functional drinks by type, by age, 2021
  15. Motivating Features

    • Refer a friend: incentivize trial and loyalty via word-of-mouth
      • Figure 34: Motivating features, 2021
    • Experience is key for trust in brand integrity, product value
      • Figure 35: TURF analysis – Select motivating features, 2021
    • Catch the eye of younger adults with social media and sustainability
      • Figure 36: Select motivating features, by age, 2021
  16. Opinions on Functional Products

    • Education needed to expand bandwidth, increase engagement
      • Figure 37: Opinions on functional products, by total and current functional drink users, 2021
    • Time to swoop in on traditional supplements
      • Figure 38: Select opinions on functional products – Functional beverages vs traditional VMS, by gender and age, 2021
    • Reach out to heavy users for product testimonials
      • Figure 39: Select opinions on functional products – Efficacy, by number of functional benefit types used, 2021
    • Give older consumers more of what they may be missing
      • Figure 40: Select opinions on functional products – Functional beverages vs foods, by age, 2021
  17. Appendix – Data Sources and Abbreviations

    • Data sources
    • Sales data
    • Consumer survey data
    • Abbreviations and terms
    • Abbreviations
  18. Appendix – The Consumer

      • Figure 41: Table – TURF analysis – Motivating features, February 2021
    • Methodology

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