Functional Refreshments

The term “liquid lunch” may soon be taking on a whole different meaning. Breakfast may become “the most important beverage of the day,” and before long parents will be telling their kids, “drink your dinner, or no dessert.”

An exaggeration perhaps, but not by much. 

According to Chicago-based research firm Mintel, three in five consumers use nutritional and performance drinks as meal replacements. The habit is driving consumers toward beverages that taste great, provide nourishment and contain trustworthy ingredients.

“Today’s time-crunched consumers are looking for healthier refreshment, convenience and functionality—they want transparency into what they are consuming, and they expect quality ingredients,” says Robert Kral Jr., vice president of marketing and procurement for Chicago-based Protein2o. “Brands that meet the demands of these consumers while providing a great tasting and truly functional beverage product will have the opportunity to win at retail.”

Having a favorite flavor was the most important factor for consumers when purchasing nutritional and performance drinks, according to the Mintel report. This is likely because 80 percent of consumers view nutritional and performance drinks as a great guilt-free snack. Industry observers predict carbonation will also be a big hit this year as consumers continue their retreat from soda.

“One of the things we recognized a while ago that’s now very common is that the sparkling aspect of beverages is important to a lot of consumers who do want to shift away from soda to more healthier options,” says Kevin Klock, president and CEO of Preston, Wash.-based Talking Rain Beverage Co. 

Protein was the second-most important factor in consumers’ decisions to purchase a functional performance beverage, and better-for-you beverage producers have noticed the trend. Kral says he has seen products that were once only known to the niche, wellness-focused consumer hitting mainstream retail shelves. 

“Retailers should continue to embrace this transition to better-for-you beverages and evolve their product offerings to meet this growing demand,” Kral says. “Protein is a perfect example of a functional ingredient that was once considered niche but has exploded in popularity in recent years due to the appealing functional benefits it has been linked to, including satiety, lean muscle growth and weight loss.” 

There is no more pulling the wool over consumers’ eyes in terms of the functionality of a beverage either. Consumers are scrutinizing the ingredients and source of ingredients more so than ever before. Evolution Fresh, a cold-pressed juice producer and Starbucks subsidiary, has recently debuted products such as Protein Power Berry, Protein Power Greens and Organic Green Lemonade to help keep up with these demands. 

“With innovation always a top priority at Evolution Fresh, we recently looked to emerging juice trends and consumer insights for inspiration, and found that consumers are seeking more sources of protein and new options for hydration,” says Mark Ninomiya, product manager at Evolution Fresh, based in Rancho Cucamonga, Calif. “In fact, a survey of juice shoppers found that protein and hydration were two of the top five most important benefits shoppers are seeking in juice.”

Karma Culture, based in Pittsford, N.Y., offers Karma Wellness Water, which allows consumers to push a button at the top of the bottle to release vitamins and nutrients into the beverage. Karma recently rolled out a version with probiotics.

“Consumer demand for functional beverages is at an all-time high,” says CJ Rapp, CEO of Karma Culture. “Karma continues to experience rapid growth in both sales and retail distribution. The fundamental difference between the early days of enhanced water versus today is the absolute requirement for the product to deliver on its promise.” 

Observers say more and more retailers are stocking better-for-you beverages as the trend continues its upward trajectory. “Consumers are increasingly aware of the damaging effects of artificial products, chemicals and environmental contaminants,” says Tyler Gage, CEO and co-founder of Brooklyn, N.Y.-based RUNA Clean Energy. “They want more connection to what’s real and nourishing,” 

Observers say words like “organic,” “dairy-free” and “gluten-free” are still powerful and quick to catch consumers’ eyes when it comes to wellness beverages.  Kevin Miller, vice president of marketing at Sparta, Mich.-based Old Orchard Brands, says today’s consumers are more educated about what they are putting into their bodies and want to know exactly what is in the products they purchase. 

“At Old Orchard Brands, we are helping retailers market healthy beverages by continuing to provide them with new, trendy options that we know consumers will love,” says Miller. “We found that consumers identified ‘organic’ as the latest trend in food products. To cater to this, we developed our own line of Organic 100 percent juice blends.”

Story time

Kaitlin Barton, senior marketing director at Los Angeles-based Califia Farms, a dairy-free beverage producer, says the story behind how the company’s drinks are made really helps draw in consumers. 

“Storytelling at point-of-sale around how local the product is and the fact that our entire almond milk process happens within a 30-mile radius also drives a lot of growth for stores,” she says. “That ethos of a commitment to the supply and that storytelling around the quality of the ingredients and the commitment to partnering with local farmers is very compelling.” 

Califia Farms recently added a plant protein-enhanced unsweetened cold brew ready-to-drink coffee to its portfolio. Barton says the product is especially appealing to consumers because it is dairy-free. “Having our full shot in the cold brew coolers is a great way to show consumers that a grocery store is kind of cutting edge when it comes to health and protein, which is a really popular category right now,” she says.  

The perception of gluten-free as a healthier option is also continuing to trend upward among consumers, including those who are not diagnosed as gluten intolerant. These trends can even be seen at the bar as more consumers turn their eyes toward gluten-free alcohol. 

“As consumers learn more about health and lifestyle options, they are looking for more information about the products they purchase so they can make informed decisions,” says Nicole Portwood, vice president of brand marketing at Austin, Texas-based Tito’s Handmade Vodka, a gluten-free liquor offering. “Gluten-free products are gaining traction both with consumers who are truly intolerant, as well as those seeking to live a gluten-free lifestyle for other health and fitness reasons.”