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Finding the Right Niche in Today’s Functional Beverage Market

The functional beverage market is growing in often-surprising ways, mirroring trends we’re seeing in the overall beverage market. A recent joint FMCG Gurus – Kerry webinar notes that consumers recognize that diets and lifestyles may contribute to the risk of long-term health problems, and are taking proactive steps to address this. Consumers are making changes to support their health by reducing the intake of some long-held favorites like sodas and sugary drinks. As well, the past year saw a reduction in consumption of traditional forms of alcohol in favor of lighter spritzers and sparkling brews.

Beyond making better-for-you beverage choices, consumers are looking for added wellness benefits in the beverages they consume—and these choices are spurring expansion in the market for functional beverages with immune health benefits.

What functional beverages do consumers want, and why?

Strong growth of nearly 10% in functional foods in beverages in the last year demonstrates that people continue to embrace the concept of ‘food as medicine” and are expecting these products to deliver on benefits. Innovation and convenience are key components of immune health beverages that resonate. As consumers resume on-the-go lifestyles, they look for functional beverages in convenient formats.

As well, consumers are becoming even more adventuresome and look to emerging flavors for a refreshing change of pace: blood orange and grapefruit. Delving deeper into these two flavors, Kerry researchers saw that the macro trends around health and wellness—with a particular focus on immune health—were driving their popularity.

Finding the beverages that resonate with niche markets.

Innova notes that in the current competitive market, functional beverages must evolve and diversify to provide consumers with the benefits they seek. Beyond the traditional function of hydration, functional beverages are  now being called upon to help relieve stress, provide energy, improve mood, support immune health, and promote a healthy digestive tract. Consumers now view beverages as a customized means for supplementation through active ingredients and holistic nutrition.

Accordingly, individual beverage categories have gone through their own functional revolution to provide more products geared to the niche consumer. Dairy and alternative dairy milk is often fortified with additional protein. As well, soft drinks have increased functionality while lowering sugar.  Hot drinks, like coffees, teas and cocoas add functional benefits to their intrinsic calming properties. And meal replacements have expanded beyond weight management and into functionality around protein, fiber and nutrients.

Immune support is a key driver.

Immune health is a significant concern as people take a prevention or management over cure approach to health maintenance. In fact, Kerry’s 2021 survey shows that nearly three-quarters of global consumers say that they have made changes to their diets in the last twelve months in order to improve their immune health. Of consumers who have looked to improve immune health, nearly half have increased their use of immune-supporting foods and beverages. This increased focus highlights the importance of products being compromise-free from a taste, cost, and convenience perspective so that products can be easily incorporated into diets.

The right product at the right time.

Kerry’s research revealed that people consider the morning a prime opportunity to start their day right. The study shows that more than a third of consumers want fruit and vegetable juice beverages that support immune health at breakfast. In addition, recent product launches highlight other popular formats for functional beverages that provide immune health benefits. Sports nutrition and powders rank high, and even soft drinks are getting a refresh with immune-supporting ingredients. Yet another emerging category, hot beverages, includes on the-go coffees with immune-supporting ingredients.


Branded ingredients build trust.

Growing health consciousness is playing out in increased focus on the benefits offered by functional beverages. Kerry’s research notes that almost half of consumers say that they would be more likely to buy immune-supporting products if they contained a branded health ingredient. Although trust is a building block for product development, more importantly, formulating with research-backed ingredients, like Wellmune®, a yeast beta glucan, enables consumers to make the best choices for their immune-health needs. Formulating with branded ingredients consumers know and trust is key to creating successful immune health beverages.

Learn more about the growing market for immune health beverages. Download the white paper.

 

Sources
FMCG GURUS-Kerry joint webinar: Responding to the growing needs of the immune and digestive health consumer in an ever-changing environment, June 2021
Kerry Global Consumer Research, Digestive and Immune Health, 2021
Innova Market Insights, Trends Insider, In Tune with Immune, 2021

關於: Beverages

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