The Rise in Functional and Flavor-Forward Beverages
By Katherine Meyer, Product Marketing Manager at Chicory
We are seeing a shift in consumer habits going from basic hydration to beverage experiences, including flavor, function, and fizz.
The scroll is fueling the shopping cart like never before. Social trends and health consciousness play pivotal roles in this transition out of plain water.
Here’s how we are seeing behaviors shift in the beverage industry:
Functional Beverages on the Rise
Traditional H2O no longer carries the same weight it used to. Health and wellness trends reveal consumers are looking to get more out of their daily hydration habits. Consumers want more: protein, probiotics, and electrolytes, for example.
That is why we are seeing functional drinks like kombucha and prebiotic soda grow 18x faster than supplements.
With brands like Liquid IV and Poppi, better-for-you brands are reshaping the beverage aisle and creating a middle ground between plain water and soda or coffee. You still get the fun flavors, but with more of the health benefits.
Flavor + Fizz = Fun
“Fuzzy” water has been around for decades, but is the current consumption spike just a fleeting trend that consumers are clinging to at the moment? The sparkling water industry is valued at $30B, growing at a 12% CAGR, so it is probably safe to say it is only trending up.
Flavored and sparkling waters offer variety with fewer drawbacks than soda. It appeals to those cutting back on sugary sodas or alcohol and offers a tactile and sensory appeal. Consumers value being able to enjoy carbonation without compromise.
Product Innovation and Viral Moments
With increased interest in fun and functional beverages, manufacturers have kept up with the demand by releasing new hydration formats. Electrolyte supplements like LiquidIV and energy drinks like Celsius have all taken off in popularity.
We are also seeing brands take advantage of viral beverage moments for product innovation. Take the Sprite Zero Sugar + Iced Tea, for example.
Gone are the days of simply water, coffee, tea, or soda as your only options. Consumers are always looking for the next hydration fixation.
The New Hydration Mindset
Despite the innovation and trends around non-water beverages, bottled water is still king. 15.94 billion gallons of water were sold in 2023, with $48B in retail sales.
And it certainly isn’t going anywhere. Yet, consumers are still enhancing even this staple with flavor drops, electrolyte boosters, and trendy bottles.
Even plain water is being influenced. We’ve seen a rise in #WaterTok along with the personalization of hydration.
So consumers aren’t necessarily drinking less water, they’re just drinking it differently. The new standard is hydration with a twist, including iterations on water itself as well as fun new beverages that bring hydration along with other functional benefits.
Why It Matters for Brands
Beverage decisions are driven by experience and identity—what’s cool to carry, drink, and share. Along with many other consumer habits, what everyone is drinking is strongly influenced by social media.
Chicory helps CPG and grocery brands meet consumers in their experimentation phase. Brands can highlight functional, non-alcoholic, and better-for-you options to consumers in an inspired mindset while browsing relevant recipes and food-related content.
Looking forward, we can expect to see continued growth in the flavor-forward and functional beverage space as health, fun, and personalization collide.
Ready to learn more? Reach out to see how Chicory can help your brand take advantage of these hydration trends.