Ready to drink nutraceutical beverages, also known as functional beverages, are playing an increasing role in the food and beverage markets, as consumers look to them for health-oriented and convenient solutions. A ready to drink functional beverage is characterized as a beverage which includes additional ingredients to provide a health benefit beyond basic hydration and is premixed and packaged for grab and go consumption. Functional drinks have been gaining popularity over the past decade, becoming an important part of the overall food and beverage market. According to Fortune Business Insights, the functional drinks market was valued at $258.8 billion in 2020 with an 11% growth rate and is expected to grow at a compound annual growth rate (CAGR) of 9.5% through 2028. This segment is growing faster than conventional soft drinks have grown in recent years.
Ready to drink functional beverages are playing an increasing role in the food and beverage markets, as consumers look to them for health-oriented solutions.
Functional beverages are growing faster than conventional soft drinks, with an expected growth rate of 9.5% per year over the next decade. Consumers are increasingly looking for health-oriented solutions and convenience, as well as healthier alternatives and better taste. Functional beverages have seen rapid growth in several markets due to their healthy image and growing consumer demand for nutritious products that go beyond traditional soft drinks and juices.
Consumers who opt for convenience over traditional cooking methods have helped boost the popularity of on-the-go items such as energy bars and drinks, which have high nutritional content. The growing global demand for healthier alternatives to sodas and other sugary drinks has also been a key factor in driving growth in the functional drinks market.
- Consumer awareness of the benefits of functional beverages
- Improved taste
- Increased investment in R&D and marketing
- Rising consumption by Millennials and Generation Z
Increasing Consumer Awareness
There is a growing awareness among consumers about functional and nutraceutical drinks. In an article by Euromonitor International, health has become top of mind for consumers as a result of the Coronavirus (COVID-19) pandemic, with people taking greater ownership of their health and putting a much stronger focus on preventative health measures. Many are choosing natural solutions over vitamins or other supplements.
Recent research indicates that the segment is experiencing rapid growth as more consumers become aware of the health benefits offered by these products and opens opportunities for manufacturers of functional drinks that provide health benefits beyond basic nutrition.
The taste of food and drinks plays a key role in people’s purchasing decisions, even when they are looking for healthy items. Functional ingredients, such as botanical extracts and herbs, when added to foods & beverages, can give an off or bitter taste to the product. Flavor additions, especially with natural fruit flavors, have been a trending way that manufacturers have developed to deal with these off-tastes and undesirable flavors.
Increased Investment in R&D and Marketing
Increased investment in R&D and marketing will be essential for manufacturers as they try to meet these demands. R&D is essential for creating new products and improving existing ones. Marketing is also critical, as it helps communicate the benefits of functional drinks to consumers who may not know how they benefit their health or performance at work or during exercise activities.
Rising Consumption of Functional Beverages by Millennials and Generation Z
Millennials and Generation Z drive markets such as organic, plant-based, and other healthy products because they are more concerned with health than previous generations. Millennials value convenience when it comes to health and wellness; for example, many turn to ready-to-drink products because they do not have time or energy after work or school on weekdays.
Trends in Functional Beverages:
- Plant power
- Mood food
- Personalized nutrition
- Sustainable consumption
The trend for plant-based beverages is growing rapidly, both in terms of popularity and the variety of products being launched into the market. Consumers are increasingly aware that they do not need to be vegan or vegetarian to want to eat more plants, and they are looking to functional drinks as a way to add more nutritional value into their day. In particular, plant-based beverages are gaining popularity among consumers who want to make healthier and more sustainable choices.
Approximately one-fifth of consumers actively try to increase their consumption of plant-based alternatives (and two thirds are simply open to using them) according to a GlobalData 2021 Q2 Consumer Survey. The future growth of this trend depends on how brands innovate in this category by providing products that fulfill consumer requirements such as taste, texture, convenience, nutrition profile and affordability.
Food For Mood
With the rise in awareness around mental health issues, there has been an increase in demand for products that can help improve moods and alleviate stress. This has led researchers to explore how certain ingredients can impact moods positively, while also making sure these ingredients meet regulatory requirements when it comes down to things like packaging claims and nutrition facts panels
As consumers are increasingly concerned about mental wellbeing, there are opportunities for brands to provide effective solutions. Companies can offer functional beverages that have mood-enhancing properties that help consumers improve their health and wellbeing. These include foods and beverages known to improve mood or boost energy levels, such as caffeine or amino acids found in certain plant-based products.
One example of this is a ‘brain food’ trend which refers to healthy food products that aim to improve one’s cognitive ability (e.g., facilitating calming properties). According to the GlobalData 2021 Q2 Consumer Survey, consumers actively look for functional ingredients that they recognize or are aware of the benefits of, therefore brands must strategically place claims and ingredient usage on products. The top ingredients that global consumers thought had a positive impact on their health were Vitamins, Ginger, Aloe Vera, Turmeric, Matcha, Antioxidants, and Electrolytes.
Personalized nutrition is all about providing people with information about their bodies so they can make better choices about what they eat or drink on a daily basis. In the functional food and beverage market, this has become increasingly relevant with over 84% of global consumers influenced by how well a product is tailored to their needs and personality(1).
With younger generations becoming more health conscious and self-aware of their nutritional requirements, we foresee brands incorporating technology such as artificial intelligence (AI) into their products to help them meet the increasing demand for personalized nutrition. Other ways companies can incorporate personalized nutrition is by informing consumers of what diet trends their products fit into, such as the Keto or Paleo Diet, as well as indicating if the product is free of certain allergens, like gluten or soy.
(1)GlobalData’s Top Trends in Food and Grocery Report 2022
Consumers are looking to make environmentally friendly choices by reducing waste, using less energy, buying products that are better for the environment, and even by choosing products based on the suitability practices of the companies they purchase from. Globally, 45% of consumers deem environmental issues to be extremely important, which rises to 48% in Asia & Australasia and 55% in Central and South America according to a GlobalData report(1). This suggests that consumers in these regions are more sustainability conscious, and therefore brands must incorporate environmental initiatives into their strategy to gain customers.
Here are some ways to practice sustainable consumption in your processing plant:
- Reduce food waste by increasing yield or using machinery that uses more of the raw materials
- Use equipment that is energy efficient or uses renewable energy such as solar power
- Reduce water usage by investing in equipment that has higher yield between cleanings
- Utilize sustainable packaging that uses less plastic or is made with recycled materials
- Focus on partnering with suppliers that use sustainable practices throughout your supply chain.
Manufacturing Solutions in Nutraceutical & Functional Beverages
When choosing equipment to manufacture nutraceutical and functional beverages, you want a company that will partner with your plant and design a solution tailored to your particular needs as well as one that designs machinery that aligns with the market drivers and trends discussed in this article. JBT can offer a complete food and beverage solution for processors, starting from blending/mixing of the ingredients to the final packaging, to help our customers in the complete process. JBT also has research and technology centers around the world that can be use by our customers in the process of developing functional drinks or test new ingredients.
“We can assist during the entirety of the critical production process,” says JBT’s Global Product Line Director for Aseptic Systems, Juan Martinez. “Our experts can help by providing an analysis of your production process and developing a strategic plan to increase efficiency and improve the use of your equipment. As a full-service partner, we will pull from our well of knowledge and experience to design the right innovative solution, ensuring reliability and performance across all areas of operations and food safety, including quality, environment, production.”
A Focus on Sustainability
Getting the most out of each ingredient and product is core to our mission of making better use of the world’s precious resources. We partner with customers to design equipment that maximizes food yield and extends product shelf life, delivering value to our customers and end consumers. Our relentless focus on continuous improvement helps to optimize efficiency in our own operations and within the products we develop. We offer technology that analyzes equipment and process performance to track efficiency in real time, and we seize every opportunity to enhance our solutions to be more energy- and water-efficient.
Through innovations such as the Heat Recovery System – which can deliver a reduction in steam usage of up to 40% – JBT helps customers optimize energy use, helping reduce a company’s overall footprint, while delivering substantial cost savings. educing or recovering food waste is also a key component of JBT’s strategy, with solutions that enable customers to benefit from potentially lucrative by-products that would otherwise be thrown away.
In an era of rising populations and increasing pressure on the global food and agriculture system, practical solutions are urgently needed to help producers and processors make better use of the world’s precious resources. Responding to the challenges, JBT has launched ambitious sustainability initiatives aimed at working together with customers to achieve a more efficient food industry worldwide.
The global nutraceutical and functional beverage industry is here to stay, and we expect that it will only grow in popularity as health-conscious consumers continue to choose these products over conventional beverages. Ready to drink functional beverages are no longer niche products for bodybuilders or health fanatics; instead, they are becoming mainstream offerings on store shelves everywhere. The rise of the functional beverage industry has been fueled by consumer awareness about their diets, which has fueled demand for healthier options like protein shakes or probiotic yogurts—both examples of products that were once considered niche but now are commonplace in many stores across America.