Soup-To-Nuts Podcast: Functional beverages trends from gut health to energy to low-sugar & high-protein

According to NIQ, nearly half of global consumers reported in 2023 that their mental and physical wellness were just as important as their financial health and job security, and Numerator found a third of consumers in 2024 are prioritizing their physical well-being – an increase of 13 percentage points from the previous year.

To achieve these goals, more Americans are reaching for functional beverages, sales of which jumped 54% to $9.2 billion between March 2020 and March 2024, according to NielsenIQ. The research firm also counted 53,000 UPC symbols in the US functional beverage category in 2023. In addition, Mintel found 83% of US consumers report using a beverage with at least one functional claim.

In this episode of FoodNavigator-USA’s Soup-To-Nuts podcast​, functional beverage brands showcasing at Natural Products Expo West this year share where they see the most potential, including which claims, ingredients and usage occasions are most attractive to consumers. Companies, including Karma Water, Good Belly and Cargill also share marketing and consumer education strategies, including the importance of clinical research to support claims. They also discuss how they are addressing emerging challenges and category threats, including rising prices.

Gut health goes mainstream with 60% of Americans struggling with digestive issues​

One of the most prominent functional benefits called out across categories and in almost every food and beverage aisle at Expo West was gut health, which was tied to immunity, digestion, satiety, mood management, skin health and more.

In the beverage space, one of the pioneering brands focused on gut health is GoodBelly, which launched its probiotic shots in 2009 before expanding into refrigerated juices in multi-serve containers and eventually supplements and fast melts.

At Expo West, the brand debuted its Prebiotic Sparkling Waters, which GoodBelly Chief Commercial Officer Juan Gluth explains expands the brand into new day parts, usage occasions, consumers and parts of the store. Featuring sustainably-sourced blue agave prebiotic fiber, the sparkling waters also introduce a new star ingredient to complement the brand’s existing product portfolio, which before this centered on probiotics.

“The vision behind [the sparkling water] launch was to have an experience with GoodBelly everyday, all day,” Gluth said.

The launch also “helps GoodBelly reach additional categories within the retail community, different shoppers that may never walk the juice aisle looking for gut health solutions,” he added.

While GoodBelly’s expansion offers growth potential, the company also is entering a crowded category with many well-established players already in the space. But Gluth says GoodBelly’s flavor profiles will help set it apart and reach untapped potential.

“What we feel makes us unique is GoodBelly is organic versus the competitive set today, which is not an organic solution. It is also a sparkling water. We know that largely the category today you see a lot of indulgent flavors, a lot of colas, root beers, grape sodas. We feel there is a market that may never consume those good existing offerings because of the flavor base. There also is no added sugars or stevia in our product. So, it is a very clean label, very refreshing, delicious drink that does stand out from the existing category set of flavors,” he said.

The line includes Lemon Lime, Mixed Berry and Mango Pineapple.

Looking forward, Gluth sees plenty of runway to support gut health, especially considering 60% of Americans have digestive health issues.

Demand for energy tips into adjacent claims of focus, attention & cognitive health​

Energy is another increasingly popular functional benefit in the beverage space that has potential to play in adjacent areas, including cognitive health, focus and attention, thanks to a wide range of ingredients.

At Expo West, functional beverage brand Karma Water, which uses a unique PushCap technology to segregate active ingredients from the water to preserve their potency until use, showcased its Energy Water, which Karma Water Marketing Manager Kelley Bridenbaugh explains includes Kyowa Hakko’s branded citicoline ingredient Cognizin.

“We wanted to be more than just an energy drink. We wanted other functionality, other benefits. So, that is why we started looking for a branded ingredient that we could work with that is clinically studied and tested, and comes with that authority and credibility. We found Cognizin,” she said.

Cognizin “does so many wonderful things for your brain,” including supporting focus and attention by supporting synapses “[talking] to each other through acetylcholine production," explained Katie Emerson, the senior manager for scientific affairs at Kyowa Hakko.

In addition to Cognizin, Karma leans on green tea extract and B vitamins for natural energy, which are increasingly important to consumers, Bridenbaugh explains.

Emerson said the rise in consumer demand for products that support energy and brain health increased during the pandemic when many people experienced “brain fog” alongside COVID – opening a discussion around brain fog as a symptom for other conditions, such as postpartum or during perimenopause. As these conversations come to the forefront, younger consumers are looking to delay or protect against these symptoms.

Looking forward, both women said they see significant potential for functional beverages that address women’s health, including supporting sleep and stress management.

Cargill helps balance health benefits with healthy beverages​

To succeed in the market, functional beverages need to not only deliver health benefits – they also need to be healthy overall, which can be a challenge when companies also want to formulate products that taste good and are tempted to lean on high amounts of sugar and fat to compensate for off notes and textures from vitamins, minerals and other beneficial ingredients.

At Expo West, Cargill showcased several ingredient solutions that Product Line Manager Alyssa Leyva said can help reduce sugar, or boost desirable flavors, like chocolate.

For example, she called out Cargill’s EverSweet +ClearFlow a stevia-based sweetener that works well in “challenging applications,” including clear and carbonated beverages, and which can round out bitter notes associated with vitamins and minerals.

Even though consumers want health benefits, they often do not want a beverage that tastes healthy​. Rather, they tend to gravitate towards indulgent flavors, which can be difficult to capture in reduced sugar and plant-based offerings. But Fatemeh Khadem, who works with Cargill’s senior technical services, said Cargill new line of Gerkens coco powders can improve the flavor profile of dairy alternatives.

For example, she explains that Gerkens Floret pairs well with almond milk and Gerkens Russet partners well with oat-based beverages.

Just as important as flavor and sweetness is mouthfeel and texture, which Leyva said Cargill also can help functional beverages master with its diverse portfolio of texturizers and polyols.

Ultimately, she added, while the opportunities within functional beverage are diverse and run the gamut of addressing physical and mental wellbeing, whether consumers buy a beverage a second time comes down to taste and experience.