Psst – Have You Heard About the Surge in Functional Health Beverages?

Improve your memory? Lift your mood? Relieve tension? A growing market of “functional health beverages” enhanced with herbs and other ingredients promise to improve your health. But do these drinks really offer health benefits? Judging by the reaction to these products the answer is a resounding, yes.

Americans want to be healthier and also discover the fountain of youth and longevity. The food industry is rushing to fulfill this new desire. The new buzzword is “functional health beverages and foods.” Functional beverages (also known as “neutraceuticals”) are beverages fortified with dietary supplements and herbal medicines. And they are becoming a multi-billion dollar industry.

Experts predict Americans will buy more bottled water than coffee or beer. Artificial flavors are losing ground to drinks with “all natural” claims. Antioxidant tea products are now the rage. And at least one brand of coffee is adding herbs and minerals to its beans. Energy drinks are the fastest growing supermarket category — with sports drinks right behind.

Japan was a pioneer in functional beverages and foods consuming nearly twice as many functional beverages as any other nationality. The Japanese have always made the direct connection between what you eat and drink and what you are, and they’ve long viewed their diets as being a primary source of health and medication.

Energy drinks have been established in Japan for decades and are also known as tonic drinks. Initially targeted at young consumers (and routinely used by this demographic as alcohol drink mixes), these drinks are now being aimed at people of all ages who need a healthy energy boost. People now understand that almost everything we take in has some kind of effect-this is a new kind of knowledge. Consumers are more empowered because of this knowledge, and companies are responding to this new found personal edification.

Other market sectors are continuing to expand. Enriched juices and juice-based drinks fortified with vitamins and minerals are gaining in popularity, as are herbal-infused beverages. All this goes well for the functional beverages industry. Functional health beverages are going more mainstream, because consumers have become much more holistic-minded, so companies are now meeting them in the middle. There is a consciousness out there now that very small amounts of something can have a very significant effect.

The functional beverages industry has attracted the attention of traditional beverage manufacturers focused on expanding their product ranges in the face of falling sales of old stand-bys such as carbonates. Pepsi’s purchase of Gatorade and South Beach Beverages Sobe, Cadbury Schweppes’ purchase of the Snapple and Mistic brands are a few examples. Products affiliated with major sporting brands, such as Reebok and Umbro sports and performance drinks, also are infiltrating the market. More sophisticated products, such as fast-rehydration drinks, are becoming popular, especially in Japan, where stamina enhancing sports drinks with added ingredients to aid performance are becoming more popular.

Wellness and nutraceutical drink products are increasingly being targeted at specific segments of the population, for example, age, gender, lifestyle and particular health conditions. Examples include Sunny Delight for children and drinks for women. Targeting specific segments of the population has been the motivation for many new products such as, women-specific products, issue-oriented products, for example, prostate and breast cancer prevention.

At present, the sports drink market is the most mature and therefore presents little opportunity for growth, which has become apparent already in the US and Japanese markets. Across all functional health beverage product lines, energy drinks are the fastest-growing sector, a trend that shows no sign of slowing in the immediate future.

The nutraceutical-wellness drink sector is the least developed but possibly the most exciting category, with drinks containing ingredients such as probiotics, prebiotics, soy proteins and phytosterols. Over-the-top premium pricing policies have also restricted sales in some circumstances, although a recent US survey showed 40 per cent of consumers were willing to pay a premium for products containing added nutritional benefits.

The same study ranked these benefits and found energy enhancement, illness prevention, heart health, anticancer effects, relaxation, mood enhancement and sexual enhancement were the most desirable. With interest in these kinds of products higher than ever, the future looks bright for this category. The 1990s fueled a health and lifestyle revolution that resulted in consumer demand for foods and beverages that provide both nourishment and good taste, at the right price. The beverage industry, with functional drinks, has successfully met those desires by selling a broad range of products–juices, energy drinks, smoothies, soy-based beverages, enhanced isotonics, enhanced water, teas that fulfills a nutritional need.

Claims for many of these drinks have not been proven and the amount of added ingredients is neither standardized nor identified on the label. And their safety — optimal doses, interactions and long-term consequences — isn’t known. Some skeptics believe the best approach for healthy living and feeling energetic is to eat healthfully, get regular physical activity and give yourself time to relax.

US consumers spent more than $25 billion dollars on ‘wellness drinks’ in 2005, making up 12% of all soft drinks spending across the US and Europe. The market represents a major opportunity for drink marketers, as consumers become aware of the link between diet and lifestyle.

What is important about the Wellness Industry? How about the definition: wellness is anything that makes you feel healthier, stronger, see better, hear better, feel better, or fight symptoms of ageing. The Sickness Industry’s definition is more in line with healthcare: anything concerned with being sick and treating symptoms of sickness. The Sickness Industry has little to do with preventing illness, being stronger or healthier which increases the popularity of the functional health beverages and food products. People are tired of popping pills for everything that ails them and are taking a more holistic or as some say looking at alternative health treatments rather than the traditional medical care that most of us have grown accustomed to.

The Wellness industry is going through a boom. Before the end of this decade, it is estimated that the Wellness industry may surpass the dot.com revolution. This is an exciting time.

Whether its drinks or spreads, yogurts or desserts, functional foods and beverages are among the fastest-growing categories in the food industry. If this looks like the 80s all over again, this newly discovered health trend has got to be the strongest yet. Consumers approach to health is different this time; it’s more aggressive, sophisticated, and here to stay.