The popularity of functional foods in 2020 grew by 360%, while the popularity of traditional sodas increased by only 9%. Today, the healthy drinks segment is valued at $43 billion and is the fastest growing in the entire industry.
Specialty Drinks
While working on the material about functional drink trends, it was impossible not to notice that the boundaries of the formats familiar a couple of years ago turned out to be very blurred. Manufacturers strive to surprise their fans by bringing such incredible products to the market that even experts find it difficult to determine which category or segment a launch should be assigned to.
We didn’t want to include kombucha in this review at first. Although the category has been growing over the past few years, in our opinion, the kombucha market deserves a separate story. But we did not manage to completely omit this topic — most people associate probiotics with kombucha, and they are one of the most powerful drivers of the entire functional drinks market.
We were especially surprised by the kombucha mixes with alcohol and beer (we will dwell on the Sneaky Bucha brand in detail), which expanded the category so much that it would be a crime not to tell the readers about it. We will mention probiotics more than once in our review — they move the entire segment forward (and also in breadth).
Let us briefly mention another leader of the functional bev industry of the last decade — energy drinks. Despite the fact that the lockdown had a strong impact on the sales of energy companies (about 25% of sales came from the morning traffic of shoppers whose schedule was disrupted by the pandemic), the category showed growth in 2020.
Consumers are still looking for functional energy drinks. This is the third driver (after increased immunity and “drinks for peace of mind”) in the segment, which gives brands a powerful incentive. So for Red Bull, the most established brand in the category, 2020 was a record year. The Nutrabolt C4 brand also excelled in US sales. “Healthy” energy can be found in many new products today.
Talking about products with mushrooms, we decided not to focus on such coffee. Yes, the trend is gaining momentum, but, again, it deserves a separate story. Take tea, innovators have succeeded in pushing the boundaries here too.
The functional drinks segment is gaining momentum. And, first of all, the tectonic shifts on it are influenced by the change in consumer habits caused by the pandemic.
Post-pandemic Era
“The COVID-19 pandemic had the biggest impact on the beverage industry in 2020,” says Gary Hemphill, managing director of research at Beverage Marketing Corp. from New York. The company is looking at the volume of beverage sales in the United States and it’s hard not to admit it right now.
“The biggest change in this category over the past year has to do with where people buy their drinks,” says Hemphill. Quarantines and closed restaurants have boosted beverage sales outside of supermarkets and horeca. The overall packaged beverage category rose 0.2% in dollar sales, according to IRI data for 2020. Alcohol was up 14.8% in online stores compared to last year. It is likely that the segments will merge, and we will talk about this in the review.
2020 saw a resurgence of carbonated soft drinks (CSD). Consumers are looking for choice and added value, which means they need to get more out of the drink than they expect. For example, caffeine, immune boosting supplements, vitamins, and protein.
But the main thing is that the pandemic has intensified and accelerated trends in the segment, which will continue for at least the next five years. And above all, the needs of consumers for the attributes of health and well-being in food and drink have increased. The most pronounced demand was for beverages to maintain immunity — trend number 1 in the world.
Liquid Immunity
The question «Where to get strength?» can be easily solved for the modern consumer. To increase the body’s resistance, manufacturers offer a wide range of ready-to-drink (RTD) immunomodulatory drinks.
Modern biotechnology and new ingredients leave a lot of room for differentiation for manufacturers. In addition, knowledge of the age-old benefits of herbal medicines is valued like never before. These are the main drivers in the sub-segment that each brand sees differently.
Founded in 2018 by Ben Goodwin and David Lester in 2018, Olipop Better-for-you soda brand uses only natural ingredients that are proven to support the gut microbiome. The brand’s products are packed with «good bacteria» to aid digestion and support a healthy immune system.
In 2020, Olipop increased sales by 600% year-on-year and added about 3,500 new points of sale to its retail network. Today, the company’s products are sold in over 5,000 grocers and convenience stores across the country, including Whole Foods, Safeway, Wegmans, Sprouts and 1,600 Kroger outlets.
In the spring, the manufacturer introduced the seventh SKU in its line — Classic Grape. Unlike traditional grape carbonated drinks with sugar, the new Olipop has 4g of natural sugar, 9g of fiber and only 45 calories.
The only dairy drink for immunity in the review (for details on dairy innovations, read our special report) — from the British brand of «breakfast drinks» Weetabix On The Go. The manufacturer has brought to the market a specialized line for immunity: Weetabix On The Go Plus Immune Support, which is high in fiber and protein (19 g per bottle), fortified with vitamins and minerals, including vitamin D.
«The demand for food and drink for the immune system is growing,» said Emma Warlow, general manager of Weetabix On The Go, «and the pandemic is fueling this trend.» Today, 67% of shoppers worldwide are interested in immune health products. And since the «right» breakfast is an important element of a healthy lifestyle, as a category leader (the brand has almost 60% share in the breakfast drinks sector), with the help of Immune Support, the manufacturer intends to popularize drinks for immunity to a wider audience.
The novelty is available in PET bottles made from 51% recycled plastic. Three flavors were prepared for the initial UK launch: chocolate brownie, berry blast, and vanilla maple. In the Asda chain, the new product could be tried at a recommended price of $2.69 per bottle.
Wellness brand Benni has announced the launch of its Immunity, an organic turmeric and ginger flavor combined with black pepper, zinc, minerals and adaptogens to provide powerful immune benefits. Orange and lemon extracts have been added to enhance the profile.
Like other Benni products manufactured in small batches in Atlanta, Immunity is suitable for vegans and keto fans. The new product was launched in partnership with P10 Distribution, and the main sales are concentrated in retail throughout the southeast.
Founded in 2019 by Bryant Joseph and Val Rodriguez, Benni (from the Latin word for wellness) strives to make healthy living more accessible to the average consumer through healthy products with functional ingredients.
Benni’s mission includes social impact initiatives. The company donates part of the proceeds to the non-profit organization Yoga 4 Change, which promotes a targeted yoga program for young people, military veterans, prisoners and people in drug rehabilitation.
Belvoir Botanicals’ range of 4 non-carbonated SKUs are made with all-natural ingredients, no sugar, no sweeteners or artificial additives, and are fortified with vitamin C. Each product boasts specific health benefits derived from plants, vegetables or fruits.
For example, Immune Support with elderberry, rose hips, raspberries and echinacea to increase immunity, Natural Energy – a mixture of lemon, mandarin, green tea, jasmine, ginseng and guarana for a natural burst of energy, and Skin Support, which, in addition to mandarin, hibiscus and geranium, Added Goji Berries — Offers an easy way to support skin health and improve complexion.
The drinks are produced in 330 ml reclosable plastic bottles with a wide neck for easy drinking. On the Asda chain in the UK it was possible to try for about $2.30 a bottle.
blk is a completely natural product made from a fulvic acid alloy — alkaline water with a pH of 8+, saturated with natural fulvic acids and humic acids. The functional novelty contains organic trace elements and electrolytes that enhance the immunomodulatory properties of the body due to humic acids, while maintaining the purity and taste of water.
The complete blk line includes 13 SKUs in 0.5 liter bottles. The product is available to order in the company’s online store.
Live Beverages, a Texas-based brand, has developed a variant of organic health cola to support the health of the digestive system, on which immunity depends 99%. A functional, limited edition version of the popular probiotic soda is with zero calories, no added sugar and only 1g of carbs per can.
The brand’s mission is inspired by the words of company founder Trevor Ross to «improve the health of your family by creating a soda-flavored kombucha.» Ross founded Live Beverages in memory of a father and sister whom he lost to cancer.
Each of Live Beverages’ products (the brand also produces kombucha and beer) is non-GMO and 99.7% made from natural ingredients. Instead of sugar, the manufacturer uses a sweetener made from monk fruit extract, which the USDA classifies as a natural ingredient to reduce the calorie content of foods.
Complex Beverage organic lettuce teas are a product that deserves special market attention. Lettuce is a vegetable that is known for its extremely high water content. In Lettuce Organic Tea, it is precisely the ingredient that combines the popularity of functional tea drinks with alternative vegetable drinks.
Four flavors of the drink: Mango, Pomegranate Passion Fruit, Exotic Apricot and Strawberry, made from organic vegetable juice of salad and organic traditional black tea, rich in nutrients. Fortified organic Lettuce salad teas are ideal for supporting a healthy immune system, balancing blood sugar and blood pressure, and weight loss.
Remedy Organics builds its products on the philosophy of Hippocrates. In line with the Aesculapius’ vision of “food should be medicine and medicine should be food,” the company creates high quality, functional, plant-based drinks with health benefits.
The newest addition to the product portfolio is Golden Mind, a modern take on Ayurvedic «golden milk» with turmeric, whose anti-inflammatory properties have been known for millennia. It contains 90% curcumin, MCT oil, adaptogenic herbs and DHA Omega-3, which are beneficial for supporting brain, eye and heart health. Other key ingredients in Golden Mind include maca, ginger, and prebiotics for gut health.
ROAR Organic has announced a new recipe for its functional drinks line. The company’s products are now fortified with vitamins B5, B6, B12 and C, as well as antioxidant vitamins A and E and electrolytes from coconut water. The move comes following market research showing that consumers are actively looking for foods with vitamins and antioxidants.
In addition to adding vitamins and antioxidants, the new ROAR packaging is more sustainable. It uses completely recyclable materials in all components, including the bottle itself, cap and label. These changes complement ROAR Organic’s mission of promoting health and resilience. The company also redesigned the packaging and updated its positioning. Products now attract more new consumers and stand out better on the shelf. 
The brand focused on aggressively expanding its revamped lineup into specialty natural food retailers across the country, including Sprouts and Whole Foods Market.
4 new ROAR Organic SKUs: Cucumber Watermelon, Mango Clementine, Georgian Peach and Blueberry Acai are available at Wegmans, Sprouts, Whole Foods Mid-Atlantic, Natural Grocers Vitamin Cottage, The Fresh Market, Fresh Thyme, Safeway / Albertsons and 7-Eleven, and at Rite-Aid and Duane Reade stores in New York.
PepsiCo estimates the category of improved water for health at $ 11.3 billion. For it, the market leader for carbonated water has launched its brand — Soulboost. Four flavor profiles are available in the US through e-commerce, including Amazon and select retail stores.
Soulboost’s Functional Line with 10-20 calories per 354 ml / 12 oz can ($ 2.99 per can), contains either 200 mg Panax Ginseng (2 SKU Lift) or 200 mg L-Theanine (2 SKU Easy), and targets healthy lifestyle consumers primarily to support mental stamina.
PepsiCo is actively investing in immunity innovation to meet growing consumer demand. In addition, the world leader sees opportunities in yet another segment with great potential.
PART II