Description

Use Mintel’s deep analysis of the US functional drinks market to grow your brand’s research strategy. This report covers the functional beverage consumer and surrounding market, with areas covered including how and why fungi are on-trend, generational differences in interest and consumption, and opportunities for brands to compete effectively in light of trends such as these. Read on to discover some of the expert insights from this report.

US Functional Beverage Market Overview

The functional drinks market in the US is currently facing persistent inflationary pressures, with almost two-thirds of consumers feeling that most functional drinks are too expensive and close to half have lost interest due to rising costs. Despite this, there may be some relief in sight with the 12 months ending January seeing a 2.84% increase in DPI and a 1.8% increase in household spending – the largest since March 2021.

Functional Drink Consumer Trends

Statistics gathered for this report show that consumers are not fully aware of how the ingredients in functional drinks can contribute to their health and wellness. To bridge this gap, communications should be clearer to educate consumers on the benefits of functional ingredients and how they can support their well-being (see Opportunities for Brands).

Consumers of all health levels are attracted to flavor. Products should have a core selection of flavors, supplemented with eye-catching innovation to capture impulse shoppers. By connecting the flavors to their functions, consumers can justify satisfying their cravings.

  • Actual vs reported consumption: Only 12% of consumers report functional drink consumption, yet 83% cite the use of beverages with at least one functional claim.
  • Flavor outweighs function for many: 43% of consumers are “always” more likely to try a new drink based on appealing flavor than functional benefits.

Opportunities for Brands

Brands have a unique opportunity to engage with consumers by connecting their ingredients to specific functional benefits and wellness outcomes. With nearly universal functional claim use and interest in functional drinks, but low reported functional drink consumption, there is an obvious need for clearer communication that bridges the gap between awareness and action. 

By selectively communicating the inherent properties of ingredients, brands can capitalize on this opportunity and drive greater consumer engagement.

Find a comprehensive list of opportunities and strategies for brands in the full report. Not exactly what you’re looking for? Try the Energy Drinks Market Report or Sports and Performance Drinks Market Report. Our drinks market research also covers many other segments.

Topics Analyzed

  • External factors influencing the functional drinks market.
  • Trends within brand strategies and market opportunities.
  • Experience and interest with functional claims.
  • Functional drink frequency and consumption occasions.
  • Functional drink ingredients consumed.
  • Desired packaging formats and features for functional drinks.
  • Attitudes toward functional drinks.

Brands Discussed

Brands: Rebbl, OM Mushroom, Pop & Bottle, Sambazon, Clevr, Leisure Project, De Soi, Treehouse Naturals, CANN, Mary Jones, Pick Me Up Potions, Magic Hour, Better Juice, and more.

Expert Analysis from a Drinks Specialist

This report, written by Adriana Chychula, a leading drinks analyst, delivers in-depth commentary and analysis to highlight current trends in the US functional drinks market and add expert context to the numbers.

Functional drinks are a rapidly evolving space, challenging brands to keep pace with emerging trends without losing sight of the basics. In any case, flavor serves as an introduction; working backwards to connect related ingredients to micronutrients and their broader functions can satisfy thirst, with science-backed wellness to justify whim purchase.

Adriana Chychula, Analyst – Food, Drink, and Nutrition

 

Adriana Chychula
Analyst – Food, Drink & Nutrition

Table of Contents

  1. Overview

    • What you need to know
      • This Report looks at the following areas
        • Definition
          • Market context
          • Executive Summary

              • Top takeaways
                • Consumer trends
                  • Balance short- and long-term function to meet all ages
                    • Figure 1: Attitudes toward functional drinks, by generation, 2023
                  • Finances are a factor
                    • Figure 2: Functional drink frequency, by financial health, 2023
                  • Flavor paves the way
                    • Figure 3: Attitudes about functional drinks, by label reading frequency, 2023
                  • Competitive strategies
                    • Ancient wisdoms bring modern street cred
                      • Figure 4: Functional drinks containing mushrooms, 2023
                    • Self-care comes in many forms
                      • Figure 5: Mood-modulating product introductions, 2023
                    • Simplicity can stand out
                      • Figure 6: Simple functional beverage release, 2023
                    • Market predictions
                      • Opportunities
                        • Bridge connections
                          • Figure 7: Interest and experience in functional claims, NET – Any benefit/claim, 2023
                        • Emphasize consistency
                          • Figure 8: Functional claim frequency, by generation, 2023
                        • Don’t lose sight of the basics
                          • Figure 9: Functional drink ingredients consumed, 2023
                      • Functional Drink Consumers by the Numbers

                        • Strong interest, low awareness point to room to grow functional knowledge…
                          • Figure 10: Interest and experience in functional claims, NET – Any benefit/claim, 2023
                        • …but beware of overwhelm
                          • Figure 11: NET experience and interest in functional claims, by Label reading frequency, 2023
                        • Functional interests vary by age, generation
                          • Figure 12: NET interest and experience with functional claims, by generation, 2023
                        • Gens Zs and Xers show functional frequency potential
                          • Figure 13: Functional drink consumption frequency, by generation, 2023
                        • Premium perceptions water down participation, frequency
                          • Figure 14: Functional drink consumption frequency, by financial health, 2023
                      • Market Drivers

                        • Increased DPI bodes well for functional drink brands
                          • Figure 15: Disposable Personal Income, January 2013-23
                          • Figure 16: Consumer perspective on functional beverage release, 2023
                        • Label confusion can stifle functional value
                          • Figure 17: Food and drink habits and opinions, 2022
                        • Sugar stigmas dominate the drink space
                          • Figure 18: Healthy beverage associations, 2022
                        • Nutrition study whiplash only further threatens consumer confidence
                          • Figure 19: Consumer labeling and ingredient attitudes, 2022
                      • Competitive Strategies and Market Opportunities

                        • Functional fungi blends across beverage category
                          • Figure 20: Functional drinks containing mushrooms, 2023
                        • Choose your mood
                          • Figure 21: Mood-modulating product introductions, 2023
                        • Support simple functionality with clean looks and communications
                          • Figure 22: Simple functional beverage release, 2023
                        • Brands target alcohol reduction with THC
                          • Figure 23: Products containing THC, 2023
                        • Glow from the inside out
                          • Figure 24: Beauty-focused functional drinks, 2023
                        • Blurring the functional lines encourages functional escapism
                          • Figure 25: Magic Hour Instagram post, 2023
                        • Fiber-based sugar reduction soothes multiple pain points
                        • The Functional Drinks Consumer – Fast Facts

                          • There is ample white space to fill
                            • First impressions are critical
                              • Basics will always be in vogue
                              • Functional Claim Experience and Interest

                                • Antioxidants can unite emerging claims
                                  • Figure 26: Functional drink experience and interest, 2023
                                • Millennials are proactive; Gen Zs not far behind
                                  • Figure 27: Use of functional benefits, by generation, 2023
                                • Gen Xers are interested, but could use a push
                                  • Figure 28: Interest in functional benefits, by generation, 2023
                              • Functional Drink Frequency

                                • Engaged consumers prove inclination toward routine
                                  • Figure 29: Functional drink frequency, 2023
                              • Functional Drink Occasions

                                • Opportunity to reach consumers at all dayparts
                                  • Figure 30: Functional drink consumption frequency, 2023
                                • Get in front of Gen Zs
                                  • Figure 31: Functional drink consumption frequency, by generation, 2023
                                • Empower parents’ leisure
                                  • Figure 32: Functional drink occasions, by parental status, 2023
                              • Functional Drink Ingredients Consumed

                                • Connect to the basics
                                  • Figure 33: Functional drink ingredients consumed, 2023
                                • Electrolytes are a gateway function
                                  • Figure 34: Functional ingredient consumption, by label reading frequency, 2023
                                • Functional drinks can support balanced nutrition
                                  • Figure 35: Functional ingredients consumed, by generation, 2023
                                • Market emerging ingredients to parents
                                  • Figure 36: Functional ingredients consumed, by parental status, 2023
                              • Packaging Formats and Features

                                • Give consumers flexibility
                                  • Figure 37: Desired packaging formats and features, 2023
                                • Slow call for plastic reduction led by Millennials
                                  • Figure 38: Desired packaging formats and features, by generation, 2023
                              • Attitudes toward Functional Drinks

                                • Balance immediate gratification with long-term reward
                                  • Figure 39: Attitudes toward functional drinks, 2023
                                • Flavor’s appeal universal across range of label reading behaviors
                                  • Figure 40: Attitudes about functional drinks, by label reading frequency, 2023
                                • Help transition younger adults into proactive behaviors in wellness
                                  • Figure 41: Attitudes about functional drinks, by generation, 2023
                              • Appendix – Data Sources and Abbreviations

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

                                          • Figure 42: Attitudes toward functional drinks, 2022
                                          • Figure 43: Interest in functional beverage claims, by non-alcoholic beverage use, 2023
                                          • Figure 44: Use of functional beverage claims, by non-alcoholic beverage use, 2023
                                          • Figure 45: Interest in emerging ingredients, 2022
                                          • Figure 46: Functional drink consumption occasions, by functional drink consumption occasions, 2023

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