🚀 The Future Of Functional Drinks: 4 Need-To-Know Insights

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Happy Tuesday Market Shakers. Welcome to the final part of our functional drinks series. Today three functional drinks experts will unpack for you the need-to-know trends that are shaping the future of this industry and how you can capitalize on them.

Today:

• In The News: 3D-printed Grouper, Walmart’s e-commerce conquest, and more

• Trending with Gen Z: AI-generated fast food commercials spark viral horror

• Innovation Deep Dive: Experts predict the future of functional drinks.

  • 1. The Benefits at The Cutting Edge of Functional Innovation

  • 2. Consumer Attitudes to Functional Drinks

  • 3. Best Practice For Marketing Functional Beverages

  • 4. How To Nail Regulatory For Functional Drinks

📰 In The News

A curation of our favorite F&B innovation stories from the week. Can be read in less than a 🧻 break.

• Edible utensils, fruit and veg-based nori wraps, and make-your-own chocolate. Mondalez announces the newest cohort of its CoLab innovation incubator.

• Steakholder Foods debuts world’s first 3D-printed cultivated grouper fish made in collaboration with Singapore’s Umami Meats.

• Free trade agreement between the UK and New Zealand coming into effect at the end of May. Cheerio to tariffs on 97% of exports from both countries.

• Walmart scarfed up its share of online retail in 2022. The company gained ground with low and high-income consumers looking to save.

• UAE-based startup Switch Foods opens country’s first plant-based meat facility. The company plans to produce a range of plant-based meat products in the 20,000 ft. facility including kebab, kafta, and mince.

• The Coronation Effect. Brits hoard champagne, quiche, scones, and buffet favorites like pork pies and scotch eggs in preparation for crowning of new king.

📱Trending with Gen-Z

What social media is telling us about Gen-Z’s cravings! Can be enjoyed during an 🛗 ride.

A Redditor’s AI-generated pizza commercial spoof sent nightmarish viral ripples through the internet. Deemed “half pepperoni, half exorcist”, the fake commercial even attracted commentary from Pizza Hut on Twitter (and Chief Twit himself, Elon Musk).

🧉Innovation Deep Dive

Weekly deep dive into an F&B trend. Can be read in less than a 🚋 ride.

In April, GourmetPro held an exclusive roundtable to discuss the functional drinks market with industry experts. During the event, the experts illuminated the latest industry trends and what to expect next. Here’s everything we learned from the 1-hour session condensed into four simple (and ultra-valuable) takeaways just for you.

Introducing The Expert Panel

Three members of the GourmetPro network join the roundtable:

• Sayantan Paul is a passionate food innovation and consumer research professional with extensive experience in food science and research. Based in India, Sayantan works with big FMCG clients to execute high-value consumer research projects.

• Raphaëlle O'Connor is a seasoned professional in food science and technology, with extensive experience in ideation, development, and commercialization of products in the functional foods and beverages, health, and wellness categories. Raphaëlle supports big brands, such as Nestlé, to implement product development projects.

• Jan Vidal Riera is a highly accomplished Senior Innovation & Market Development Executive with extensive experience in the food-tech industry. Leveraging his expertise in commercial, R&D, and industrial networks, Jan has helped numerous food-tech companies, such as Libre foods, scale industrially and develop their route-to-market.

1. The Benefits At The Cutting Edge Of Functional Innovation

You’ve already read about the origins of functional drinks. But these beverages have come a long way since sports nutrition, and now all kinds of consumers are seeking all kinds of benefits.

According to our expert panel, demand in Europe, US, and Indian markets is rapidly growing for beverages that bring these 5 boosts.

🥛 A Gut Feeling

Startups are bubbling up with innovative concoctions that focus on digestion and gut health. Think kombucha, kefir, and more – all designed to keep your tummy happy and healthy.

🍵 Cleanse and Detox

Who doesn't want to feel refreshed and rejuvenated? Detoxifying drinks are making waves, offering a tasty way to cleanse your system. From charcoal-infused lemonades to detox teas, there's no shortage of options to flush out those toxins.

🧘 Chill Out

In a world that's constantly on the go, relaxation, and stress relief drinks are the new elixir. With natural ingredients like chamomile and lavender, these beverages are designed to help you unwind and find your inner zen.

⚡️ Energize and Replenish

Forget old-school energy drinks. The functional beverage scene is bringing new ways to rev up your engine. Whether you're seeking an electrolyte-packed, low-sugar sports drink or a natural energy booster, there's a bevy of options to power you through your day.

💪 Personalized Potions

Gone are the days of one-size-fits-all beverages. The future of functional drinks is all about catering to individual needs. From dietary supplements to infant nutrition, the industry is expanding to serve a broader range of consumers.

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2. How Customers Think About Functional Drinks

While industry types like you and me are gushing about “functional drinks”, this is a term that consumers don’t give a hoot about. Instead, they are concerned with the benefits they get from imbibing and how these will make them feel. Oh, and, in case mass-producing liquid kale is part of your master plan, functional drinks still have to taste good too (sorry Kale…).

“Functional” Doesn’t Resonate With Most Consumers

• Forget the umbrella term, Raphaelle believes "functional beverages" is too vague for the average consumer. Brands should focus on customization and target specific needs, like a high-protein profile or convenient healthy options. This is being realized as brands, such as Rowdy Mermaid Kombucha, brand drinks according to the mental or physical states they help you achieve.

Instead, Beverages Need To Appeal To Emotion

• Emotion is key according to Jan. Customers are less concerned with the microgram weights of vitamins or what specific chemical compounds they consume. This means taking things a step further than “1000mg of vitamin C!” Instead they want to know how beverages will benefit them. Is it better sleep? A relaxed feeling? Fortitude against flu? Lead with the outcome.

Taste and Experience (surprise, surprise) Still Reign Supreme

• In Sayantan's view, the term "functional" might not hold much weight with consumers. It's all about nailing the taste, texture, and overall experience of your beverage. Add in some sustainability and personalized health benefits, and you'll have a winning formula.

3. Best Practice For Marketing Functional Beverages

Now that you know more about customer attitudes to “functional drinks”, how can you translate this into better marketing practices? The answer is simple: keep it simple, keep it benefit-driven.

• Use Personalized Communications

  • Custom-fit communication: Ditch the broad "functional beverage" label and make your message relevant to your target audience says Raphaelle. Pinpoint their needs and preferences, then tailor your branding accordingly. This means investing in developing clear customer profiles and archetypes from the get-go so that you ensure you develop and market products that solve a customer’s pain point.

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• Keep Messaging Simple and Evocative

  • Emotion over-explanation: Jan and Sayantan advise against overloading the front of your packaging with info. Instead, let the emotional appeal shine and draw customers in. Think Red Bull, its simple packaging and evocative marketing clearly convey the message to consumers that the drink gives you energy (without overloading them with other details). 🍹

4. How To Nail Regulatory For Functional Drinks

A big challenge for functional drinks is regulations. Products often contain novel and rare ingredients that different states and countries take different stances on. It’s essential for companies to have an air-tight understanding of regulations in their target markets…from the get-go! Here are some simple and effective approaches you can take to ensure you stay on the right side of regulations.

• Compliance by Design

  • Know the rules, and then innovate within them says Raphaelle. Align your product with regulations from the get-go, starting with the basics like nutritional profile (carbohydrates, sugar, fibers, protein, etc), and ensure that products deliver. Once that’s nailed down, start adding in unique functional and bioreactive ingredients, all the while ensuring solid, science-based testing to back up the benefits your product claims to deliver. 📚🔍

• Monitor and Assess Risk

  • Jan’s advice: hire a pro and create a matrix. Bring a senior advisor on board to help you navigate the regulatory maze. Work with them to assess risks and opportunities, ensuring you stay on the right side of the law without sacrificing your vision. 💼📈

• Test, Test, and Test again

  • This is something that a lot of companies, even big players, overlook according to Sayantan. It’s vital to ensure your product meets the regulatory requirements throughout its lifecycle. Keep an eye on ingredient thresholds, and don't forget to study how your product reacts in different markets. This means taking into account how your beverage will perform two months or six months down the line. Also, factor in how ingredients will react with each other, or with packaging (especially when exposed to different temperatures in hotter markets).🌍🔬

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See you next week as we round off this series by exploring the impact of AI on the food and beverage industry.