Kerry expects the functional beverage market to gain traction and see a surge of NPD targeting consumers who are approaching health holistically due to the COVID-19 threat. 

This is based on new Kerry research, which found that 65 percent of functional beverage consumers are more worried about their health since the start of the pandemic. 

“The COVID-19 pandemic has brought attention to the importance of a functional immune system, and we expect that demand for products perceived to enhance immunity will continue in the future beyond COVID-19,” Breda Kelly, Kerry’s nutritional beverage lead for Europe and Russia, tells FoodIngredientsFirst.

“While immune health is top-of-mind at the moment and is the most important health concern since the onset of the pandemic, younger age groups are worried about body-mind wellness and their mental health, meaning that there is an opportunity to create products to address these concerns.”

Breda adds that the demand for functional beverages is translating into new product launches in the marketplace, with products that deliver benefits in areas such as immunity, digestive health, mental health and cognitive health.  

Interest in fortified foods and beverages is also echoed by Innova Market Insights’ 2021 Top Ten Trends report, which spotlights “Nutrition Hacking” as a leading nutrition trend.

Functionality top-of-mind
The whitepaper, Understanding Consumer Drivers in Beverages, examines the key health priorities that will drive the functional beverage market. It surveyed 2,662 beverage consumers across the UK, Germany, Poland and Spain. 

When asked about the health concerns that have become more important since the emergence of COVID-19, 59 percent of respondents cited immunity, while 50 percent said mental health is now a priority. 

The research has also indicated that consumers prefer beverages with natural ingredients. However, there is a high level of acceptance for fortification, with 39 percent of Europeans now placing more importance on fortification when it comes to their health.

“Consumers are looking for beverages products and ingredients that are healthy and natural, and this has implications beyond ingredients and origin,” Breda explains. 

“The emerging consumer is paying closer attention to label claims and callouts as well as product appearance, flavor, aroma and mouthfeel. So, quality must remain high across the board for functional beverages,” she notes.

Previous Kerry research also found that 41 percent of consumers identified the use of foods and beverages with added functional benefits as one of the best ways to manage their health. 

The research also showed that consumers prefer beverages with natural ingredients.Amid the world’s COVID-19 and environmental crises, a growing acceptance of foods altered or “hacked” to improve nutrition is emerging. In a 2020 Innova Consumer Survey, four out of five respondents affirmed, “I believe in progress in food and beverages through science.”

Consumers demand, industry delivers
As the market for products with functional and nutritional benefits grows, there is increasing consumer demand for formats that meet the needs of different occasions and can be conveniently consumed. 

The research also found that just over half of all Europeans attach equal importance to taste and delivery of the benefit. 

The functional beverage market is projected to grow and for beverage manufacturers, there are opportunities for different offerings such as functionality in hot drinks like tea and hot chocolate.

“We think the opportunity to create iconic products is still ahead of us. Brands will need to communicate the key benefits of the products while also delivering on taste and texture,” notes Breda.

“Consumers are willing to pay a premium for beverages with a functional benefit and will repurchase if that benefit is proven to work. This means that manufacturers need to use ingredients that are backed by science and trusted by consumers,” she adds. 

Ripples of drinks innovation
All consumer and marketplace evidence point to functional beverages continuing to grow strongly into the future, according to Breda. 

“Kerry’s research reveals high levels of interest in functional beverages that are fortified with ingredients such as protein, vitamins and minerals.”

Despite the importance of naturality, consumers are showing a willingness to consume modified foods for increased health benefits, such as foods with added protein. 

The beverage category is a key segment for high protein formulation. According to Innova Market Insights, around 80 percent of global meal replacement launches now contain a “high in protein” or “source of protein” claim. 

While protein beverages have conventionally come in thick textures, new technologies have allowed for refreshing high-protein drinks, which can appeal to mainstream consumers. 

Last month, Kerry revealed that sugar reduction, low-alcohol beverages, hard seltzers and plant proteins are trending within the beverage space and this is driven by the COVID-19 pandemic.

Kerry also underscored late last year that the functional beverage space presents significant scope for growth and premiumization of existing products.