ENERGIZING FUNCTIONAL BEVERAGES FOR A STRONGER BOTTOM LINE

Experienced chef congratulated by four people at a trendy restaurant

It’s no secret that consumers are doing research and checking labels for high-quality ingredients and natural flavors—especially when it comes to their beverages and, in particular, those that convey health benefits.

Manufacturers of functional beverages are addressing a range of changing consumer demands—everything from nutrition and wellness to mood enhancement and beauty boosts—through their water, coffee, tea and other beverages. With new data from wellness-focused data researcher SPINS showing functional beverage categories up 5.9 percent across all channels over the past year, this powerful shift is proving to be, at $27.2 billion, a profitable one.

More than ever, consumers want to know what their beverages will do for them. This expectation has chefs, operators, manufacturers and R&D teams working to find creative solutions via new and unexpected recipes. If you’re among them, here are a few categories to consider:

Kicked Up Coffee and Tea

Known as the “original functional beverages” due to their naturally energizing properties, coffee and tea continue to propel this growing trend. Coffee beans, for example, are packed with antioxidants, some of which become even more potent after the roasting process. Most people don’t stop to think about the health benefits of coffee consumption, including a lowered risk of heart disease, cancer and Alzheimer’s disease.

Ready-to-drink (RTD) coffee is booming, thanks to the ample doses of activated charcoal, L-theanine, probiotics and extra protein—all on-trend ingredients—found in cold brew blends. Brands like Point Blank Cold Brew and NuZee are growing in popularity by positioning themselves as a clean energy boost for active lifestyles, while Pop & Bottle’s almond milk lattes are boosting their functionality with added nutrients, adaptogens and collagen.

A superfood in its own right, tea is highly versatile. Turmeric, ginger root and lavender, for example, have become staple ingredients by offering a perfect balance of taste and health benefits. Meanwhile, RTD teas like kombucha are taking over grocery and c-store shelves, thanks to their immune-boosting benefits. The kombucha market, in particular, is projected to reach $5.25 billion by 2025, according to World Tea News.

ginger pear beauty

Water with a Boost

With the dramatic decline of soft drink consumption, natural sparkling waters are enjoying a surge that’s showing no signs of slowing down. Popular brands like Dasani, Spindrift and LaCroix offer some of the flavor-forward punch former soda drinkers crave without the added sugars or artificial sweeteners—but bubbles are just the beginning. Flat water infusions, including coconut, maple and cactus, continue to disrupt the better-for-you beverage space by offering electrolytes and anti-inflammatory properties through powerful ingredients like taurine, which can aid muscle repair.

According to Technomic’s 2018 Consumer Beverage Trend Report, nearly three in 10 consumers are increasingly ordering water at restaurants for health reasons. In response, more operators are evolving their beverage menus to include housemade water-based creations with bold fruits, vegetables and distillates in an effort to attract customers willing to spend more for a carefully crafted infusion.

Bartender preparing negroni cocktail

Herbs, Botanicals and Beyond

As consumers seek less-sugary beverages, the opportunity continues to grow for innovative drinks made with fresh, functional ingredients such as herbs, spices, botanicals and extracts. Whether it’s a custom-blended juice or a gourmet lemonade, operators are thinking outside the beverage box as they search for high-quality ingredients packed with benefits. For example, craft soda—otherwise known as small-batch or artisanal soda—is winning fans over with fruit flavors not commonly found in soft drinks, along with bold extracts and healthful sweetener alternatives like agave and honey. By pushing the envelope of craveable beverage experiences through interesting tastes, colors, shapes and textures, this growing category is both promising and exciting.

Whatever your functional beverage focus, it’s becoming increasingly evident that investing in a functional beverage program won’t just help you stay ahead of changing consumer expectations; it will drive significant revenue. Not sure where to start? S&D can help. From strategy and recipe development to category research and merchandising, we have the insights, extract innovation and category solutions it takes to implement a beverage program that sets you apart. Contact us today to get started.