2025 Functional Beverage Guide
2025 Functional Beverage Guide
Means to be
of DOSING
Functional in
2025 By Mark Murphy
The success of Olipop, and indeed PepsiCo’s recent $1.95 billion In OWYN’s case, that can be anything from the 20g of pro-
purchase of Poppi, is pushing a new generation of functional tein and 5g of fiber in its Protein Shake, to the Doubleshot Pro-
beverages into the mainstream (and with it into conventional tein Coffee Shake, which adds 180mg of caffeine into the mix
grocers), ushering in an era of plant-based fibers and alternative (the latter of which is launching in Target this August). “To me,
natural sweeteners. As the breakout brands move into bustling that’s OWYN’s best definition of a functional beverage,” says
categories defined by pre- and probiotic sodas and high-protein Perez. “Consumers are really pressed for time, they want to
shakes, how do startups continue to differentiate themselves? maximize the benefits.”
And how does functional fit in when brands focus on a single Even within that split categorization, how does a brand advo-
USP, and retailers focus on mainstream points of similarity? cate itself to consumers as a unique product without falling in
It’s no secret that many growth categories are being propelled line behind longstanding incumbents?
by consumer interest in a particular function. In the 52 weeks “I like to think about it as a tree,” says Jesslyn Rollins, CEO,
ending January 21, the Weight Biolyte, whose products are sci-
Control category jumped 11.1% entifically formulated in such a
to $10.9 billion according to Cir- way as to deliver the equivalent
cana - driven by breakout brands amounts of electrolytes typically
such as OWYN (154% growth), found in an IV bag. “The cen-
while the $23 billion Sports ter of the tree is sports drinks.
Drinks category is up 4.7% dur- Then you have all these different
ing the same period thanks to branches - zero calorie, organ-
outperformers like Alani Nu, (re- ic, rapid rehydration, medical
cently acquired by Celsius, which grade, the list goes on.”
is itself showing 63.1% growth). It
begs the question - what quench-
es a thirst, and what fuels a body?
Defining Functional
There are plenty of maddening talking points to be had that,
yes, every beverage serves a function - even water for hydra-
tion. And brand owners will often tell you it’s not so much func-
tion that defines their purpose, rather great taste or potent ef-
ficacy, or even a cleaner or higher dose. So what does functional
really mean?
“My informal definition would be: does the product solve a
problem in your routine?” says Howard Telford, Senior Industry
Manager - Soft Drinks, Euromonitor.
“You can split it between what I would call functional catego-
ries: energy, sports, coconut water, kombucha,” Telford adds.
“Then there’s stuff that is refreshing, which I would say is not
functional - it’s mainly about taste.”
It’s a view shared by Julia Perez, Chief Marketing Officer at
OWYN. “Functional can mean so many things, but I think it’s
a beverage that is delivering something other than taste,” she
said. “So it doesn’t have to be such a sophisticated definition.
To me, functional is something that, in addition to taste, you’re
getting a benefit.”
Up, Up and Away sales alone for the year ending January 21 Keep it Simple
Like a puppy taking its first steps into the 2025 according to Circana. When fractions of a second define a con-
world, consumers can be cautious in their “When we first started it was kind of sumer’s purchase choice at the grocery
buying decisions. The same rings true for shocking. We’ve got seven times the electro- store, less is more when it comes to ver-
functional dosing. Recall that Red Bull lyte than what you’d find in a sports drink. biage. And identifying with a consumer’s
caused consternation in the late 90s for Now that’s kind of gotten diluted and we’re understanding of a category amplifies
its 80mg of caffeine per 8.4 oz. can, while focused on the balance of the electrolyte, that effect. “Nobody says ‘Oh, man! I re-
more recently launched energy drinks taking it to that next level to try and explain ally want a rapid rehydration drink!” says
such as Prime tout a substantially higher the quantity. More is not more.” Rollins. “They say ‘I need a sports drink.’
200mg of caffeine per 12 oz. can - and are We’ve been so programmed for many
lauded in certain segments for it. Is this many years of just having Gatorade and
what consumers want, or are brands push- Powerade.”
ing the envelope to create a sense of more While brands often focus on a par-
is better? ticular ingredient or function in their
“I have a colleague who has a phrase marketing, it’s rare if that is the begin-
called ‘the caffeine paradox,’” says Telford. ning and end of a product’s story. While
“Every time you ask consumers, ‘what do OWYN’s Protein Shakes splash 20g of
you think about caffeine?’ they tell you they protein clearly on its Tetra Paks, it’s also
want to cut back. And then you look at the allergen friendly, low-sugar, vegan, and
data, and it’s not true!” several other trending talking points.
For Rollins, it’s a case of tables turning. How can consumers be effectively edu-
“People say on the shelf that you’ve got a cated without causing confusion?
race to the bottom for price. But when it “The data shows that they (consumers)
comes to the milligrams of electrolytes, it feel educated enough (about protein),”
feels like a race to the top.” says Perez. “Consumers think that more
After initially launching in 2017 with We Need to Talk About Protein protein is better. So I actually think that
roughly seven times the electrolytes nor- What may be true for some categories may that education is slowly but surely mak-
mally added to sports drinks, Biolyte found not translate to others. There’s little doubt ing its way to the mainstream. At least
itself at the front of the pack in a new arms that the high protein craze - which began for protein, it seems like a rising tide lifts
race for rapid hydration. Other brands, in- in protein shake powders and has made its all boats.”
cluding Electrolit, Hoist, and even some way to every retail shelf from snack bars Almost conversely, Perez feels there’s
Gatorade sub-lines have dug deeper into to frozen breakfast sandwiches - has yet to more to it - just as much as there’s more
the ‘increased dosage = increased efficacy’ reach its zenith. to OWYN’s ingredient deck than just pro-
formula, but Biolyte has put an unusual Protein beverages are largely tracked by tein. “I do think, when it comes to ingre-
marker in the sand. Circana in the $10.9 billion Weight Control dients in general, especially for a product
“My dad, who’s the anesthesiologist be- category, which grew 11.1% year-on-year, like OWYN, where there’s a lot of science
hind Biolyte, said ‘more is not more.’ He driven by consumer demand for shelf sta- behind it, there’s a need to educate. And
said your body is going to need a balance ble and refrigerated brands such as Premier explain what certain ingredients do.”
of electrolytes to water, and so if you’re just (up 20.7% during the period) and Fairlife
electrolyte loading, and you’re not balanc- (up 28.9%). The Next Breakout Trend
ing out with water, then you’re not doing With CPG now in the infancy of its Ozem- No brand is an island, and looking ahead
the consumer any favor.” pic Era, consumers are looking to hero it seems mission critical to keep the mes-
It’s a difficult sale, though -- either to re- functions like protein to fuel their bodies. saging clear and the focus on a better-for-
tail buyers or the end user. “How do you say And brands are responding. you ethos. “We’re trending more in that
that in an elevator pitch?” asks Rollins. “The “When you look at the trends in protein, BFY space,” says Telford, of Euromonitor.
hard work is trying to make these complex the higher the protein, the better,” says “Walmart is calling it the modern soda
things simple. You’re no longer saying ‘we’re Perez, of OWYN. “If you reference SPINS category.”
more than the competition,’ because we’re or NielsenIQ data, you’ll see that the flavors “The driver of that for me is lower
not, we’re at the optimum level of what the that are growing at the fastest rate are high sugar, cleaner ingredients, and less guilt
human body needs. Some have more, but protein SKUs. Our Pro Elite High Protein when I get the flavors that I like, and
that’s not a good thing, which is not the way Shakes have 32 grams of protein and zero maybe it isn’t quite so much about the
most functional categories go.” grams of sugar. That has now taken over chicory root or the fiber,” says Telford.
Yet for Rollins and her team it’s working. our best selling protein shake.” “Maybe the consumer isn’t even aware
The company has steadily grown over the The pressure isn’t just coming from of that.”
last 8 years to become one of the largest consumers, however. “Even buyers will be “The opportunity that exists for small-
independent brands in the sports drinks pushing you to innovate on a higher pro- er brands, is who is going to define the
category, recording over $32 million in tein,” admits Perez. next gut health?”
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96 BEVNET MAGAZINE • March/April 2025
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