Top trends of hydration, gut health and energy

Functional beverages take the beverage category beyond simply hydration and a beneficial effect on both physical and mental health. The market continues to grow as consumers become more and more tuned in to health and wellbeing and explore what functional ingredients can do for them.

Functional beverages includes a number of exciting beverage categories: including sports drinks, energy drinks, gut health soda, functional waters and juices. But what are the top trends driving all these categories forward and meeting consumers where they are?

Gut health

Gut health has been booming across the F&B industry. And beverages are no exception.

Why gut health? The benefits of digestion and well-being remain, but an increasing body of research links the microbiome to every organ in the body, even extending to mood, mental health and the way we think.

As a result, prebiotic and probiotic sodas have been moving onto shelves: not only in the US but in Asia, the UK and beyond.

In the US, this year’s big news is the entry of both Coca-Cola and PepsiCo into the category: Coca-Cola with Simply Pop and PepsiCo with the acquisition of Poppi.

The success of brands is this category is not just about their gut health positioning but the whole health and wellness package: clean label, less sugar, attractive branding and a dedicated social media presence.

“The PepsiCo + Poppi acquisition this year is certainly a significant moment, as is the creation of the “Modern Soda” category by Walmart in terms of creating space and visibility for this set,” said Howard Telford, head of soft drinks at Euromonitor International, a data analytics company.

“It’s a validation of this new segment as more than a temporary fad: both the need-state (gut health) but also the packaging, tone, aesthetic and flavor profiles of these drinks as having a mass, durable retail appeal.”

Cognitive health and mental wellness

Awareness of the importance of mental health has increased dramatically over the last decade. That’s now making its way into food and beverage. With an aging population, degenerative diseases such as Alzheimer’s and Parkinson’s aren’t increasingly in the minds of consumers.

And consumers are on a simple but constant mission to think, focus and perform better in their day-to-day lives: whether that’s in the office or at home or anywhere they happen to be.

“This is definitely an area to watch,” said Telford. “We’re seeing more consumers explicitly seeking focus, productivity-enhancement, mental clarity, rather than just caffeine.

“Focus overlaps with nootropics – and we’re seeing ingredients like l-theanine, ginseng, ashwagandha and other adaptogens being more common in brands positioned in this space.

“I think there are some new rituals and incremental occasions in non-alcohol (such as the 3pm pick-me-up, evening non-alcohol option, post-exercise recovery) that can be important areas where this resonates.”

Energy spurt

Traditional energy drinks might have always targeted certain audiences. Now, better-for-you energy drinks are widening out that consumer base.

“The category is evolving from physical energy (and the pre-workout boom of the performance energy craze over the last 3-5 years) to a more multi-dimensional understanding of energy,” said Telford.

“While physical performance and caffeine remains core, brands are tapping into new missions, like focus, hydration, calming, or social energy/reset. We’re also seeing more powders as well as RTD products in this space.

“We’re also seeing the branding, the language and the use cases attracting new or first time users to the category (such as Alani Nu).”

Today, energy is perhaps better viewed less as a category, and more as a concept for the mass audience. Energy, after all, has been a fundamental need to today’s consumers for years: whether that’s in the form of coffee and caffeine or soda for a sugar spike or energy drinks. Now, energy drinks are incorporating those needs states to reach a wider audience and with that comes different branding and marketing: take, for example, Celsius’ lifestyle positioning.

Hydration plus

One of the fastest evolving categories to watch in functional beverages is those that promise superior hydration: a concept commonly referred to as ‘enhanced hydration’ or ‘hydration plus’.

“‘Enhanced hydration’ can mean different things, depending on the brand and occasion,” said Telford, thinking about the difference between sports to thirst or simply the need for a drink in a social setting.

“But the common thread in advanced or enhanced hydration is typically added electrolytes, supporting recovery, or in some cases supporting immune system health and/or energy. These hydration brands have become wellness platforms in their own right: with electrolytes and a host of other functional ingredients or benefits.”

And one of the most exciting areas within hydration is hydration powders. Euromonitor tracks electrolyte powders alongside other powder mixes in a category called Powder Concentrates on its Passport data platform: that category grew volumes 15% in the US in 2024 (a year when most other soft drinks struggled to generate meaningful volume growth).

Personalized nutrition

Personalized nutrition has made big news. It’s about using smart tech and AI to help consumers customized beverages with exactly what they need for their body.

These options exist for elite athletes but, despite the hype, haven’t really made it into the mainstream like many predicted.

But functional beverages are where the category has the best chance to shine and the potential is still there: if brands can crack this nut.

“I think personalized nutrition as a concept is gaining traction but we haven’t really seen this scaled yet,” said Telford.

“But there is more segmentation of functional drinks around new ‘need states’.”

That might include, for example, drinks for sleep or relaxation, or more niche areas such as menopause or pregnancy.

While Telford doesn’t see any truly ‘personalized’ brands out there, he does note the trend for customization: such as sports nutrition companies that give people the ability to build nutrients and protein into their drinks or shakes as required.

Furthermore, online trends like ‘WaterTok’ (building your own syrup and powder and enhancer water recipes) shows there is demand for this model.