How brands are cashing in on functional beverages

Beverage brands are capitalizing on the growing demand for functional beverages among young and health-conscious consumers by introducing increasingly innovative offerings, including protein-fortified coffees and CBD-infused sodas.

$160 billion global functional beverage market It has become an increasingly lucrative category encompassing multi-purpose beverages that claim to promise flavor and enjoyment as well as wellness benefits, as consumers look for convenient ways to achieve their health goals.

“Functional beverages are beverages that will deliver results,” Sally Lyons Wyatt, global vice president and general counsel for consumer goods and food services at consumer insights firm Circana, told CNBC.

“Convenience is definitely a factor, but it’s also the quest to live longer, healthier… do you want to drink a drink that’s on hand, or do you want the drink to work harder for you?”

According to EY’s latest report, approximately 75% of Millennials and 80% of Generation Z consume a variety of functional beverages such as energy drinks, probiotic drinks and vitamin-enriched beverages consumer beverage survey More than 2,500 adults in the United States and Brazil.

EY found that more than half of survey respondents said they were willing to pay more for beverages that support their health and wellness goals.

Additionally, Circana’s 2026 beverage evolution report showed that approximately 64% of consumers sometimes choose to buy beverages as a snack, and this jumps to 70% among people aged 25-34, indicating a growing appetite for meal replacement beverages.

Starbucks launched protein coffees sold in stores in the U.S., Canada and Europe last year to capitalize on the all-purpose wellness drink craze; Expanded the availability of ready-to-drink protein coffees in supermarkets, launching in 2024.

“Functional beverages are now really prevalent in all kinds of categories across food and beverage, and protein is probably at the top of them,” Sam Henderson, Starbucks’ EMEA Group Beverage Development Manager, told CNBC.

“We are selling [almost] cold sparkling protein as well as we do in flat whites, and as you can imagine flat whites are an incredibly popular drink and protein is performing just as well right now,” he said.

The wider industry is also looking to tap into the market, with the French food and beverage company Danone It recently acquired Steven Bartlett-backed protein drink maker Huel as part of a deal worth reportedly $1.15 billion. Huel offers nutritionally complete protein shakes as meal replacements.

Meanwhile, soda giants PepsiCo And Coca Cola It also jumped into the trend. Coca-Cola launched its prebiotic soda brand Simply Pop in the US early last year, while Pepsi acquired prebiotic soda startup Poppi in a $2 billion deal.

“I think more than ever our consumers — all consumers — are looking for products that provide them with functional benefits. I think people are more educated than ever about nutrition and what they’re putting into their bodies,” Henderson said.

As coffee chains, soda brands and startups compete for a slice of the functional beverage market, many are charging higher prices than traditional products.

Starbucks’ in-store protein coffee prices range from $5.75 to $6.75, while protein-enriched milk and protein cold foam can be added to any beverage for $1 and $2, respectively.. “They are definitely a top-notch offering,” Henderson said.

Founded in 2019, UK-based wellness drinks startup TRIP sells drinks containing adaptogens and botanicals with ingredients ranging from CBD to magnesium.

A single TRIP drink can cost over £2.00 ($2.60) and is available in UK supermarkets as well as many retailers in the US.

“TRIP is a premium product; it’s not sold next to traditional soda,” TRIP co-founder Olivia Ferdi told CNBC. “We don’t produce standard sodas; we formulate daily wellness solutions that customers will recognize.”

Ferdi explained that six years ago, functional drinks were a nascent concept, but now they have become a “basic consumer need” for which people are willing to pay more.

Additionally, sourcing key ingredients such as magnesium, lion’s mane, and ashwagandha, a medicinal herb believed to reduce stress, requires different standards than traditional soda production.

“Our consumers aren’t just paying for refreshment; they’re investing in a functional benefit that supports their mental clarity and daily essentials.”

There are doubts about how effective supplements and vitamins like magnesium and collagen really are. experts and nutritionists previously told CNBC. They warned that supplements are not strictly regulated by the Food and Drug Administration in the United States and that consumers should instead aim to get essential nutrients from foods.

TRIP has become TikTok Shop UK’s #1 drinks brand In January 2025, it used a “social first” strategy to tap into this young consumer base.

“Social media has been a huge catalyst for this, turning functional beverages into a status symbol,” said TRIP co-founder Ferdi. “On platforms like TikTok and Instagram, choosing a beverage that supports your mental foundation has become a lifestyle statement.”

In fact, according to 2025 data shared with CNBC by food and beverage analytics firm Datassentials, 72% of Generation Z looks to social media for food and beverage-focused wellness trends.

“Them [young consumers] “We’re going to continue to grow over the next five years because they’re coming into high-earning years, which gives them more purchasing power,” said Circana’s Lyons Wyatt.

“If they’re going to pay for something, they want to get the most out of it, and that’s why you’ll find coffees with protein and other benefits will probably outshine some of the old-fashioned traditional options,” he added.