Edition #3 - Functional Drinks Innovation
The functional drinks market in Europe is booming. In 2024, the sector generated around USD 40.5 billion in revenue, and it’s expected to grow at ~8.3 % annually through 2030.
Consumers are demanding hydration + health, clean labels, and functional upgrades. From gut-health sodas to protein coffees and hydration waters, shelves are filling up fast. Retailers are giving these products prime space.
But growth also brings challenges: crowded categories, overlapping claims, skeptical consumers, and regulatory scrutiny.
The opportunity is enormous—but the margin for error is thin.
Anyone can sell a functional drink once.
The real challenge is getting consumers to come back.
Because brilliant formulations collapse on launch day when consumers don’t understand the benefit or don’t trust on the brand promise. In a market this competitive, the brands that win won’t be those with the flashiest formulas—but those that build trust, clarity, and everyday ritual that fits consumer life.
The Trust Gap in Functional Drinks
Formulas, even technically perfect ones, don’t build brands. Trust does.
And trust only comes when three elements align:
Credibility: Claims must be backed by science, clinical trials, proof of efficacy. Consumers are getting wise to marketing spin.
Influencers, doctors, and other stakeholders are also key pieces in building trust with your audience. Understand who your consumers trust before defining your ambassador strategy.
Clarity: Communication has to translate science into something consumers instantly understand and value.
Not every consumer has the same level of awareness or education. This step starts with deeply understanding your target’s preconceptions.
Consistency: Taste& texture, Format, Benefit, ritual—if the experience breaks once, trust collapses.
Keep in mind that most functional drink benefits are intangible and not felt immediately. The ritual and format are essential to create an experience that makes people feel good and trust the process.
A product doesn’t win by being technically perfect. It wins by connecting Taste, Clear Benefit, Enjoyable ritual and trust to what the consumer is already searching for.
INNOVATION BY UPGRADING YOUR POSITIONING
What separates winners from the pack is not just what’s inside the can, but how positioning and communicate it.
Too many brands launch new ingredients, formats, or technologies—yet fail to tell a story that resonates.
Example – Creatine for Brain Health:
Creatine has always been positioned as a sports supplement, but science shows cognitive benefits too. Where are the functional drinks reframing creatine as brain fuel for students and professionals? The innovation exists, but the communication gap keeps the category stuck.
👉 Bottom line: the next big opportunity may not be a new ingredient—it’s translating existing innovation into trustworthy, repeatable stories.
INNOVATION BY GENERATING TRUST
Too many functional beverages are packed with nutrients on paper—yet lose potency over time, leaving consumers with little more than flavoured water.
Example – ACTIVATE Drinks:
Back in 2012, ACTIVATE challenged this assumption with an interactive cap. Instead of premixing vitamins in liquid (where they degrade), nutrients are stored dry inside the cap and released only when you twist it, right before drinking.
This meant three things:
✨ Nutrients don’t degrade on shelf.
✨ Consumers get them fresh and active.
✨ Trust shifts from “claims on label” to “experience in the moment.”
👉 Bottom line: The future of functional drinks isn’t just about what you put in—it’s about showing consumers it works
INNOVATION BY BEING SPECIALIST
Another emerging pattern in functional drinks is the rise of specialist brands. Instead of spreading themselves thin, these brands build deep expertise around a single platform, product, or ingredient.
Specialism can mean:
Targeting a specific consumer group (e.g., women’s health, athletes, seniors).
Focusing on a particular need state (focus, gut health, immunity).
Leveraging a proprietary technology (fermentation, encapsulation).
Owning one signature ingredient (collagen, kombucha cultures, mushrooms).
Example – Huel:
Huel’s success comes from owning the “complete nutrition” platform. Instead of diversifying broadly, it built authority and brand clarity around one promise: all-in-one fuel. That specialism turned a niche powder into a global category leader.
👉 Some days ago Huel Launched its new line “lite”, by relying on customer feedback: “every calorie counts” was a clear insight that drove them to design a powerful formula with same nutrients but fewer calories.
INNOVATION WITH RITUALS
Health hacks take daily essentials to the next level. Instead of creating complex new products, brands are embedding functional benefits into routines consumers already have.
Example – Protein or Collagen Coffee:
Coffee is the most entrenched daily ritual worldwide. By layering in Collagen or protein, brands transformed a universal habit into a functional upgrade—no new behaviour required, just a smarter swap.
Health hacks are the evolution of foundational nutrition. By removing barriers to consumption and integrating benefits seamlessly into daily life, they make healthy behaviour easier to adopt and maintain.
👉 The future of functional drinks may belong not to the most exotic formulas, but to the brands that transform daily rituals into habitual health upgrades.
What’s Next
The future of functional drinks: Innovating outside the lab
The functional drinks of tomorrow won’t just sit on shelves as “better-for-you” options. They’ll integrate into people’s daily lives as trusted companions—helping them manage energy, mood, recovery, and wellbeing in ways that feel effortless and authentic.
That means the winning brands won’t only innovate in the lab; they’ll innovate in culture. They’ll shape rituals, own micro-occasions, and build emotional connections that make their products a habit rather than a novelty.
The future of functional drinks will not be decided by formulas alone, but by trust. The brands that win will be the ones that prove it, communicate it clearly, and embed themselves into the rhythms of everyday life.
Inside Kraut Food Studio
The future of protein in Europe
In the coming days we’ll be working on an in-depth report on the protein enriched foods categories in the UK and Europe. If you’d like to share information, insights, or join us for an online interview, you can reply directly to this email, reach me at [email protected], or connect with me on LinkedIn to discuss further.
👉🏻 Looking for consultancy in the Functional Food or supplements category?
Set up a 15 min call to tell me more about your challenges - From innovation to communication or positioning- and we can evaluate how we help you
Each week, I’ll keep sharing the trends shaping food and wellness. My wish is that they give you not only inspiration, but also clarity — so that we can all build a healthier, brighter future.
Remember, trends only matter when they spark action!
Until next week :)
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