For today’s health-conscious consumer, it’s not enough that their beverage offerings be calorie-conscious. They need to impart a special ‘something else’ too. Adaptogens, CBD, natural flavorings and herbal concoctions line beverage aisles and draw consumers who have traded the bar for the yoga studio—or at least want to drink like they have.
As leaders in the research and product launch space, we’ve kept a keen eye on wellness trends in beverage, following the low-no alcohol trend in real time and helping guide some of the world’s most innovative brands toward product launch success.
From within the consumer call for no and low alcohol beverage offerings, we’ve seen a thread emerge: functional ingredients, like vitamins, antioxidants and zero sugar, are in high demand. But it will take more than claims on the label to lure health savvy purchasers. To truly leverage the functional ingredient trend, you’ll need a deep understanding of the why behind consumer choice. Here’s a glimpse at some of the overarching factors contributing to the trend.
Health Comes First
In an ongoing study with OpinionRoute looking at American food and diet choices, we found that one in three people adapted a diet plan during COVID-19, with high protein, vitamin rich and low carb protocols leading the way. Top drivers behind diet choice included ease of preparation, nutritional completeness, and increased energy.
While it’s difficult to say just how many have stuck with these diets in 2022, more than half of total respondents who were following a diet in June of 2021 claimed they had been on said diet for more than a year, suggesting that, for many, the turn toward health and wellness brought about during the pandemic is here to stay.
We can see the proliferation of this trend echoed by those in the larger Health and Wellness space. In early 2022, Mindbody released an annual Wellness index with a special look at post-pandemic sentiments in Americans. They found that 65% of respondents mentioned a greater focus on wellness since the start of COVID-19 as a means of living a longer and healthier life; 55% did so to improve their immune system.
Even more interesting: 46% of those surveyed mentioned interest in trying immune health services like red light therapy, IV vitamin drops, and detox programs. While alternative therapies such as these have often been looked at with a critical lens, today’s health-conscious consumer is more willing to experiment when it comes to achieving their health goals. Foundational research and claims testing can help brands entering the Functional beverage space to sift through the static and find solutions that will not only appeal to your target customer, but also guide them toward the life-enhancing choices they seek.
Giving Dry a Try
There’s another key consumer choice catalyzing the functional ingredient trend: the turn toward no-low alcohol beverage offerings. While we’ve written extensively on No-low beer and wine trends, the push toward low- and no-alcohol beverage options is not going away any time soon.
There is also the emerging creation of zero-proof spirits, a category trying to find its pace in the no-low market, and functional cocktail mixes like the new brand PARCH, a non-alcoholic canned cocktail with functional herbs. Just earlier this year, NielsenIQ reflected on the 2022 celebration of “Dry January” and its impact on American drinking habits across age demographics, finding that non-alcohol products saw a rise of 19% in dollar sales whereas total alcohol sales dropped 6.7% this year alone.
They similarly observed that 78% of consumers who purchased no-low options also purchased alcoholic options in the same time frame, suggesting that consumers are experimenting with a more moderate approach — and the offerings that come along with it. Brands looking to ride the growing no-low wave should consider brand positioning of their functional beverage offerings to appeal to the sober, as well as the sober curious, for lasting impact.
Putting the Fun in Functional
While the demand for functional ingredients undoubtedly meets at the intersection of health, wellness, and conscious consumption trends, the heightened anxiety around heath during the COVID-19 pandemic has been just as formative in bolstering consumer interest. So, how have successful functional-ingredient beverages been able to walk the delicate balance of heeding consumer interest without eliciting negative responses around this health anxiety?
With Instagram-worthy branding and the Goop seal of approval, mocktail company Kin Euphorics has come out as a front runner in the functional ingredient category since their launch in 2018. Founder Jen Batchelor shared that their consumers have leveraged the nootropic-rich recipes to benefit their mental health during, and beyond, the pandemic, saying that: “People caught on to the fact that when you lower stress, but harness focus and actually nourish your cognition, you can sit and have a really relaxed focus session of work, or you can sit and have an enjoyable conversation with a colleague. It kind of took the monotony out of the pandemic….”
This focus on ritual, self-care, and reconnection won over consumers through the pandemic without damaging the utility of Kin’s functional ingredient list in a post-vaccine world.
We couldn’t devote an article to functional ingredients without touching upon CBD, the sales of which have exploded since the pandemic in response to mental and chronic health issues brought on by increased isolation.
Beverage brand Recess utilizes whimsical pastels and cloud imagery to bring levity to functional offerings that pack a serious punch. Their infused sparkling waters couple broad spectrum hemp with adaptogens like ginseng, L-theanine, and lemon balm for a decidedly relaxed — and research-backed — approach to wellness that consumers appreciate. In 2018 the total global CBD beverage market was estimated to be worth around US$901.8m, with an expected 17.8% compound annual growth rate (CAGR) through 2025 to nearly $3bn.
Ian Monat, CEO and founder of Rhythm CBD Seltzers, reflected on the growth of offerings in this category, noting that, “Consumers are looking for added health benefits in their beverages, even alcoholic beverages… I foresee a wider acceptance of CBD in beverages, and you’ll start seeing more CBD seltzers being merchandised alongside the kombucha and other wellness or anti-inflammatory products on the shelf.”
Riding the Wave
For brands and producers seeking to enter the functional beverage space, specialized market research into the who and why behind consumer choice will be the difference between products that quench consumer interest and those that fizzle out. With an expected growth of 6.6% in the next 6 years, the value of joining this market now outweighs the effort it will take to get product messaging and formulation right.
About the author: Miriam Konz brings more than 25 years of experience in quantitative marketing research and analysis to clients in diverse industries in her role at AMC Global as EVP of Corporate Strategy and Innovation. Throughout her career, she has primarily led strategic initiatives with an emphasis on product development, market segmentation, product line extensions, pricing and new product/concept testing. Miriam has executed research around the world in geographies from the United States and Europe all the way to Asia, Egypt and South America and has been lucky enough to travel to many of her research locations.