The Rise of Functional Beverages: What Nine Years of Innovation Has Taught Us

Written by Brandt Maybury and Micah-Carr-Hill, Co-founders of Tastehead

FoodNavigator recently invited us to contribute to an article about the ‘modern soda’ trend in the US, and its impact around the world. It prompted a much wider conversation about functional beverage innovation, which has been our most popular category at Tastehead for several years now. While working through our answers for each question, we realised what a unique perspective we have had for this particular category – we thought it deserved its own article.

We receive dozens of enquiries every week for food and beverage product innovation from around the world (UK, USA, UAE/GCC, West Africa to name our most popular markets), from start-ups, to challenger brands, to global businesses. We have multiple beverage projects in development at any one time, many of which include market research and consumer insight services to support the product development and manufacturing setup that are our core focus.

This gives us a particularly broad view of this category, and the privilege of often becoming aware of new ideas and trends before they reach the market. We see the ideas before they reach the shelves, hear what consumers think through our research, and work through the practicalities of turning an interesting concept into something commercially viable that people can actually buy.

There is plenty of market data available, so we won’t dwell on the numbers available elsewhere. What we wanted to share here are the things that stand out most to us, and are occasionally missed by others.

We’re asking more of our drinks

For a long time, much of the conversation around healthier soft drinks focused on taking things out. Less sugar, fewer calories, fewer ingredients that consumers didn’t recognise. Those priorities haven’t disappeared, but increasingly the briefs coming into Tastehead are more about what a drink could add.

People have more health information at their fingertips, and more ways of tracking their habits and progress than ever before. That has helped create an audience for products that offer something beyond refreshment. For a consumer, a benefit that feels relevant to their day-to-day can also be more compelling than a message about avoiding problems in the distant future.

Some of the foundations were being laid well before the current functional drinks boom. Cawston Press launched its sparkling cans in 2014, with pressed fruit and flavour central to the range. Micah developed these in his role as the brand’s Head of Taste, before we founded Tastehead. It was a different approach to familiar fizzy drinks, built around ingredients consumers could recognise and a drinking experience they enjoyed.

We wouldn’t retrospectively label Cawston Press a functional drinks brand. But it is a good example of the wider change in expectations that helped make room for today’s innovation. Consumers were already questioning what went into their drinks, without necessarily wanting to give up the pleasure of drinking them.

Why so much of this innovation happens in drinks

Convenience is a large part of the answer. A can or bottle is ready when you are. There is no powder to measure, shaker to wash or extra preparation to fit into the morning. In many cases a single functional beverage can replace multiple supplement products, each with a high price point for several weeks of supply.

Drinks also have several opportunities to fit into someone’s day, more so than other convenience foods. Coffee for caffeine and water for hydration are already familiar habits. Choosing another drink for a particular purpose is not an especially big leap. Someone might happily add another drink to their day on top of what they already drink,  whereas asking consumers to consume a nootropic snack bar or packet of protein crisps may not be as easy.

There are practical reasons for founders to choose this category, too. Some third-party beverage manufacturers can offer production runs from as little as 1,000 litres. That will depend on the product and process, but it can make an enormous difference to a start-up’s initial investment and the amount of stock it needs to sell. Accessing similarly small runs can be harder in categories such as extruded snacks or industrially manufactured confectionery.

Working across food and drink gives us another useful comparison. Incorporating a functional ingredient into a liquid often involves fewer structural and textural challenges than adding it to a biscuit, chocolate or baked product. You are not simultaneously trying to preserve a particular crunch, chew, snap or crumb.

Of course, there are still flavour, stability and processing challenges. A recipe that works in the development kitchen must also work at the factory and throughout its shelf life. But beverages can offer considerable flexibility, and the possibility of a long ambient shelf life is another advantage where the formulation allows it.

None of this makes launching a drinks brand easy, but it does help explain why so many founders with a functional idea start here.

Lower sugar does not mean the same thing to everyone

We regularly run consumer focus groups and surveys at Tastehead, and have spoken to hundreds of consumers across many different projects. Among those looking for a healthier soft drink, lower sugar consistently comes through as a leading health priority. The interesting part is what happens next.

Some want zero sugar and are perfectly happy with sweeteners. Others would rather have a little sugar and no sweeteners at all. Some object to artificial sweeteners, while others also dislike plant-derived options, whether because of the taste or their perception of the ingredient.

We hear similarly different views on sugar itself. One person sees agave or coconut sugar as a better choice; another feels that ‘sugar is sugar’. These perceptions influence what people buy, regardless of whether the differences are as meaningful nutritionally as they believe.

There is another distinction that matters enormously when writing a development brief: wanting less sugar is not necessarily the same as wanting less sweetness. One consumer wants the familiar sweetness of their usual soda, with less sugar. Another would actively prefer a less sweet drink.

Both may describe themselves as health-conscious. They would not necessarily choose the same product.

That is why we put so much emphasis on understanding the intended consumer before getting too far into formulation. “A healthier drink” is a starting point for a conversation, not a sufficiently clear brief on its own.

What are consumers looking for the most?

Gut health has become a particularly prominent part of modern soda/functional beverages, with brands such as Poppi building their proposition around prebiotics. In our development work, certain fibres can be relatively accommodating ingredients, allowing us to add functionality without significantly changing the flavour or texture. The choice of fibre, the quantity and the overall cost still need careful consideration.

We are also seeing considerable interest in protein-enriched drinks over the past 3 years. Those projects can be more challenging, particularly when the ambition is a light, refreshing, acidic drink rather than a conventional shake.

This is an area that brands have been exploring for many years now. A project of ours from 2019, EXALT, brought a fresh, fruit-led approach to protein smoothies. We worked with the team on its protein blends and ready-to-drink products to deliver a fresher, whole food approach to the classic protein shake. They have since secured listings with Ocado and premium retailers, and have attracted investment backing and established partnerships with Premier League football clubs including Tottenham Hotspur and Brighton & Hove Albion.

Healthier takes on various coffees and teas are another popular trend. One of the more innovative beverages we have worked on recently is cascara, made using the dried outer fruit of the coffee cherry. It comes from the coffee plant, but produces a fruity, tea-like drink rather than tasting like a cup of roasted coffee.

For Eden, we developed cascara drinks in Grapefruit, Tropical and Ginger flavours, all three of which received awards at the 2025 Dubai International Taste Awards (2 x Platinum, 1 x Gold). It is a good example of looking beyond familiar soda flavours and using an ingredient’s own character to create something distinctive and enjoyable.

We continue to see ideas involving a wide array of functional ingredients; collagen, mushrooms, sea moss, adaptogens, nootropics and other ingredients many people have never heard of (including us, occasionally), but an interesting ingredient story is only part of the job. There needs to be a credible reason for including an ingredient, and the finished product needs to deliver what the brand promises.

Recent laboratory testing of some creatine gummies found little or none of the advertised creatine in the final product. Those were food supplements, not drinks, but the findings have certainly fuelled a heightened sense of caution in many consumers.

The can is part of the appeal

It would be a mistake to assume that consumers are choosing these products solely by comparing nutritional information from one product with another.

For some, a well-designed, branded can is almost an accessory to them. It sits on their desk, comes along on a walk or makes an appearance in the Saturday Instagram carousel. A packet of gummies or a snack bar wrapper doesn’t have quite the same impact.

We see this as a genuine part of the value, rather than something separate from it. A brand can make a new ingredient or unfamiliar type of drink feel approachable. It allows them to signal that they care about their health and wellbeing, both to themselves and to others.

There is a balance to strike with health messaging though. Put too much emphasis on the functional ingredients and suggested health claims, and you can inadvertently suggest that taste has taken second place. This is a careful balancing act we have walked in many a focus group.

From challenger brands to the mainstream

The US modern-soda market shows how quickly these ideas can move beyond a specialist audience. Walmart’s dedicated modern-soda section has given the products a recognisable place on the shelf. We see that as retailers helping to shape a category, rather than simply finding space for individual brands.

The larger manufacturers are responding through different routes. PepsiCo has acquired Poppi and launched Pepsi Prebiotic Cola under its flagship brand, while Coca-Cola has entered through Simply Pop.

What interests us is how those approaches earn the consumer’s confidence. A challenger built around functionality from the beginning offers a different story from a familiar cola introducing it to an existing audience. There is room for both, and the larger businesses bring investment and distribution that can take the category further.

We also expect growth to come from several occasions. A consumer might replace a conventional soda, switch from kombucha or juice, or buy a drink on an occasion when they would otherwise have had tap water. Paying more for an existing occasion can increase sales value without increasing the amount people drink.

Those are different kinds of growth. For a founder, understanding which occasion the product is trying to win is often more useful than deciding exactly which category label it belongs under.

Getting a first purchase is only part of the job

The fundamentals of growing a functional drinks brand are much the same as for any other food or beverage business. Understand the consumer, invest in the brand, price sensibly, keep developing the range and make sure the product tastes good.

That does not mean every brand needs the same route to market. A straightforward drink with broad appeal may suit mainstream retail. A more specialist product, bought as part of a regular supplement-like routine, may find a particularly good home in online sales and subscriptions.

More ingredients do not automatically make a stronger product, either. A complex formulation can be appropriate, but the consumer should still be able to understand why they might want it.

Then there is the practical question of getting people to try it. Sampling can be very effective when it reaches the right audience. A chilled single can also asks for much less commitment than a multipack of an unfamiliar drink.

In the UK, meal deals are especially useful here. They allow someone to try a premium drink with lunch without necessarily paying its full standalone price. Another Tastehead project, Grass & Co.’s canned range, is a good example: Liquid Focus is stocked in Sainsbury’s and included in its meal-deal selection. That puts the product into an everyday shopping occasion, rather than relying only on consumers actively seeking out a functional drink.

In the US, we have been struck by the space devoted to chilled grab-and-go drinks. The familiar British supermarket meal-deal format is less entrenched, but convenience-store bundles offer another route to trial, and UK-style meal-deal approaches are gaining ground.

For brands, the chilled cabinet, front-of-store display and main drinks aisle can therefore do different jobs. The right placement helps somebody discover the drink; a suitable multipack and price can help it become a regular purchase.

But a listing is not the finish line. The product needs to keep selling after the introductory offer, with costs and margins that work for both the brand and the retailer. A consumer enjoying a free sample is encouraging. Choosing to spend their own money on it again is the more important test.

International interest, local expectations

The appetite for this kind of innovation is not confined to the UK and US. We see that directly through our international enquiries and projects, particularly in the Middle East.

Slurpz, a children’s soft drink range we recently developed, reached Carrefour in the UAE within its first year. Its launch through Bright Bites covered 30 Carrefour stores, including Mall of the Emirates. For a young brand, that is a significant distribution milestone, and a useful example of the opportunities beyond the UK for better-for-you drinks.

Working with founders in these markets also gives us a view of the interest in UK product-development expertise. But we would be careful about describing international innovation as a simple sequence in which one country leads and everyone else follows.

Different markets have their own flavour preferences, sweetness expectations, price points and shopping habits. A product that works well in one country may need adapting elsewhere, while another may travel with very little change.

The important thing is to ask those questions rather than assume. What should stay consistent about the brand? What do local consumers value? Does the same drinking occasion exist? These are normal considerations for an international launch, not signs that the original product was wrong.

There is still plenty of room for better taste

We are sometimes asked whether functional drinks are becoming saturated. Our view is that the category is busy, but still very much growing and evolving.

The typical segments the industry have used to classify various types of beverages are becoming less useful, too. A lower-sugar drink might also offer a functional benefit and compete with an energy drink. Someone else might choose it instead of alcohol. We expect more of this overlap, rather than a future in which every drink sits neatly in its own category.

One opportunity, however, remains very clear to us: making the products more enjoyable.

We develop and benchmark a lot of functional food and drink. There are some very good products, but we still regularly taste things where we see considerable scope for better balance and a more enjoyable taste. As consumers have more options, there is less reason for them to accept something they do not particularly like just to get the functionality.

MEDAHUMAN Greens is a project we are particularly proud of in this regard. The drink is already stocked in Morrisons, and won Best Functional Drink at the UK Soft Drinks Awards 2026. As we were developing the product, what stood out was how enjoyable a greens drink could actually be if it’s approached in the right way. It did not need to taste overly vegetal, or feel like another task to get through in the afternoon.

Keeping our own understanding of taste developing is important too. Members of the Tastehead development team judge at awards including Great Taste and The Grocer New Product Awards. Alongside the judging itself, we value the opportunity to encounter different products and exchange views with other people who spend their working lives thinking about food, flavour and innovation.

An award is not a substitute for understanding your consumer, of course. But continually tasting, discussing and questioning what makes a product work helps us bring a broader perspective back to our development projects.

For founders, we think there is plenty to be encouraged by. The next opportunity does not have to involve an ingredient nobody has heard of or a longer list of benefits. It may be a better fit with somebody’s day, a clearer reason to choose the brand, or simply a drink that tastes better than the alternatives.

A functional benefit can give people a reason to first pick up the can. We also want to give them a reason to look forward to opening it again.

If you would like to learn more about how we could help your brand, please contact us at hello@tastehead.com