According to a YouGov poll of more than 1,700 US adults in mid-April, only 66% say they drink three or more glasses of water, including sparkling and flavored options, a day. A quarter report drinking only one or two glasses a day and 8% say they rarely or never drink water.
This is woefully short of the National Academy of Medicine’s daily recommendation of nine glasses for women and 13 glasses for men, and places into context research by The Hartman Group published last summer that found hydration is the second-largest beverage need state after taste with 45% of consumers reporting they are trying to drink water more often but 28% reporting they do not like the taste of it.
So what are they drinking instead? According to the YouGov poll, 38% of Americans indicate that they prefer soda, while research from Hartman Group found 54% of consumers choose soda to quench their thirst. While these figures may be concerning to public health advocates, The Hartman Group found 47% of consumers want to drink soda less often and 25% want to find healthier versions of sports and energy drinks, which 48% say they reach for because they want specific nutrients.
According to The Hartman group, these needs “point to opportunities for customization, variety and healthier options,” which this episode of FoodNavigator-USA’s Soup-To-Nuts podcast explores with Sai Chaluvadi. the VP of R&D and scientific affairs at Liquid IV, which helped pioneer the fast-growing hydration category. He shares key consumer trends that are influencing how hydration brands develop and market their products, how Liquid IV is educating consumers about the science behind its products and unique ingredient blends and how the brand is addressing demand for products that are functional and flavorful.
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Sales of functional beverage surge as Americans fall short on water consumption
Despite – or potentially because – how many Americans fall short of recommended daily water consumption, demand for functional beverages, are on the rise with Nielsen’s NIQ tracking a 54% increase in sales of functional beverages between March 2020 and March 2024 to reach $9.2 billion.
While the pandemic fueled a significant uptick in demand for products that support overall wellness and offer functional benefits, Chaluvadi says the sustained demand for hydration and functional beverages even as the threat from COVID ebbs underscores the category’s future potential. But for brands to seize that opportunity, he says, they need to step up the scientific rigor with which they develop and evaluate products and they need to improve the taste experience.
“Most consumers recognize that they are not hydrating enough. I think the stat is about 70% of the consumers are under-hydrated, or a lot of them are chronically dehydrated,” and they are beginning to recognize their hydration impacts their mood, cognition and how they approach the day, Chaluvadi said.
“That insight opened up this whole category of functional beverages,” he added.
From the starting point of hydration, Liquid IV launched its Hydration Multiplier line, which it then expanded to include other health benefits across 12 platforms that are related to or impacted by hydration, including options to support immunity, sleep, energy and more.
Complementary ingredients that Liquid IV blends with electrolytes and hydrating ingredients, including five times the daily value of vitamin C in its Hydration Multiplier + Immune Support drink mix, 1 billion culture forming units of the probiotic BC30 in its Hydration Multiplier Gut Health, 100 mg of natural caffeine in its Hydration Multiplier + Energy, and a combination of L-theanine, valerian root extract and 3mg of melatonin per stick pack of its Hydration Multiplier + Sleep, which is the only offering of the batch that is categorized as a supplement.
Consumer want better-for-you beverages, including low- and no-sugar options
Just as important to consumers as what is in their functional beverages, is what is not. And one of the top ingredients they are trying to reduce is sugar. To meet this need, Liquid IV launched a line of sugar-free Hydration Multiplier SKUs last year, which replaces the sugar with an Amino Acid Allulose Blend and Stevia Leaf Extract from Rebaudioside A.
Developing the product took about two years, a full team of sensory scientists, product developers and consumers who shared feedback, said Chaluvadi.
He explained that priorities included a great taste experience, but also the team wanted natural sweeteners and to ensure the safety of the product.
“There are concerns around the health benefits of artificial sweeteners. And we recognize that. So, we’ve done extensive studies on both the safety and the efficacy, and I can share with you today that we have successfully demonstrated the safety of this product in a human clinical trial, and we will be publishing those results soon in a peer-reviewed journal,” Chaluvadi said.
“The other thing I'll say is the sugar free product [had to have] the same nutrition benefits and the effectiveness of hydration without losing out on any of the flavor and taste experience that we are known for. And it was no easy task to get there without using any artificial sweeteners,” he added.
He explained the combination of allulose, L-glutamine, L-alanine, malic acid and pantothenic acid delivered the functional benefits and taste consumers expect from Liquid IV, but without the sugar.
“Flavors are half of the magic of liquid IV in our design process, and we are very consumer-inspired when it comes to our choices of flavors. We ask them a lot of questions and we take inspiration from the flavor landscape globally,” said Chaluvadi.
For example, the company recently teamed with Popsicle to create a nostalgic Firecracker flavor that not only replicates the obvious notes of the summertime favorite, but includes hints of wood to recreate the experience of chewing on the popsicle stick.
As illustrated by Liquid IV’s approach to science-backed ingredient blends, flavors and marketing, innovation is central to the brand and Chaluvadi says it will play a pivotal role in how it continues to develop cutting-edge products that meet consumers’ evolving needs.
