Functional Beverages 26/27: Sector Outlook
Published 01 April 2026
With 80% of US millennial and Gen Z saying they consume functional beverages on a regular basis (EY, 2025), the market for these kinds of drinks has never been more ripe for investment and innovation. As such, brands are stepping up with products that offer an array of ingredients targeting some of the most sought-after consumer wellness benefits, including brain health, elevated hydration and weight management.
Uplifting Everyday Performance
Hydration’s New Edge
Targeted Wellness Tonics
Drinks designed to elevate everyday performance – think high-protein sodas with added creatine and sips that improve cognitive function – have become ubiquitous across the functional beverage landscape. Meanwhile, the energy drinks category is appealing to an ever-broadening scope of consumers, with a particular focus on women.
Drinks designed to elevate everyday performance – think high-protein sodas with added creatine and sips that improve cognitive function – have become ubiquitous across the functional beverage landscape. Meanwhile, the energy drinks category is appealing to an ever-broadening scope of consumers, with a particular focus on women.
Elevated hydration continues to be a huge area of innovation for functional drinks as consumers increasingly recognise its impact on everything from energy to focus and recovery, and are even creating their own ‘loaded hydration’ drinks at home. From a product development perspective, brands are looking for alternative natural sources of electrolytes, kid-friendly formulations, and cold-weather-specific formats.
Beyond drinks delivering a broad range of functional advantages, a number of brands are offering thirst-quenchers with ingredients targeting specific wellness concerns. Some are repositioning functional drinks as crave-curbing liquid snacks, while others are helping to alleviate symptoms of hormonal imbalance and environmental allergies like hay fever.
Functional Beverages 26/27: Sector Outlook
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Functional Beverages 26/27: Sector Outlook
With 80% of US millennial and Gen Z saying they consume functional beverages on a regular basis (EY, 2025), the market for these kinds of drinks has never been more ripe for...