Functional Beverage Market Growth Expected to Reach $225 Billion by 2027

LOS ANGELES, CA, May 24, 2023 /24-7PressRelease/ — Functional beverages, which are non-alcoholic drinks that contain added nutrients and ingredients intended to provide specific health benefits, are growing in popularity at an increasingly high rate. Sales are expected to increase to a 225-billion-dollar industry by 2027.* As consumers, especially Gen Z (the youngest demographic with purchasing power born between 1995-2010), want healthier beverages and non-alcoholic options, the variety of functional beverages has soared.

Functional beverages offer good-for-you ingredients such as electrolytes, antioxidants, vitamins, probiotics, herbs and mushrooms. They feature a low sugar content and natural ingredients. Some examples include mood-boosting drinks, fortified fruit drinks, enhanced water, plant milk, probiotic beverages, ready-to-drink teas and performance drinks. Consumers use functional beverages to help with relaxation, aid digestion, support immunity and boost energy.

To further analyze this trending category, Fusion, a leader in B2B marketing and research, conducted a study analyzing data from over 300 respondents representing the total U.S. market. The study indicated that over 65% of consumers aged 18-65 purchased a functional beverage in the last month. More than half of the respondents said they would purchase a functional beverage at a grocery store over buying from a convenience store, health food store, restaurant, or online. This finding provides insight into an immense opportunity for retailers to build large, eye-catching displays or cross-promote with other healthy products to capture a piece of this growing category.

The study also explored the generational purchase behaviors between Baby Boomers (those born between 1945 – 1964); Gen X (those born between 1965 and 1981); Millennials (those born between 1982 – 1994); and Gen Z. As expected, hydration and taste were the most important attributes when purchasing a functional beverage across all demographic cohorts. Secondary purchasing decisions were based on wellness benefits and product positioning. Gen Z was more concerned with price, branding and packaging compared to the other generations. Digestive health and mental well-being were also important for Gen Z, while energy and immune health were more important to consumers over 30 years old. Millennials, Gen X, and Baby Boomers were primarily concerned with the wellness benefit that functional beverages offer.

Functional beverages are innovative with their variety of flavors and benefits. As consumers continue to focus on their nutrition and healthy lifestyle needs, the market expansion will continue to grow. The market is likely to see an influx of more functional beverages. Shoppers want to know what they are consuming, and they are reading the nutritional labels. According to Fusion’s study, over 62% of respondents indicated that they “always” or “usually” read the nutrition labels on the functional beverages they are consuming. Consumer awareness of health and wellness product attributes are key growth drivers. The global compound annual growth rate for functional beverages is expected to grow 11.1% by 2027.*

As generational shifts continue and Gen Z becomes a larger part of the shopper demographic with strong purchasing power, it’s important to keep shopper behaviors and preferences in mind when planning marketing strategies and promotions. For a deeper dive into functional beverages, retailers and beverage companies are encouraged to contact Fusion directly.

Fusion specializes in trend analysis, category research, and in-depth shopper and consumer research in the grocery retail segment. Fusion’s marketing group focuses on bringing complicated data information into easily understandable motion graphics. The key to Fusion’s industry success is the ability to find useful information to help its clients increase sales. For more information about Fusion and its client roster and capabilities, please visit their website at

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