Who Is the Functional Beverage Consumer?

Who is the functional beverage consumer? Comparing segments of emerging beverages Introduction A functional beverage can be broadly defined Functional Ingredients as any drink with added health benefits, on Social Media encompassing categories such as energy % Share of Voice among Functional drinks, enhanced water, and plant milks. Beverage Conversations Consumers of functional beverages purchase Probiotics Turmeric Ginger Collagen and use them regularly—often daily—and Vitamin C CBD Elderberry Other typically consider them to be part of their holistic wellness routine. 22% 25% Functional beverages is a wide category with many underlying trends. These include: • Ingredients aligning themselves with 3% nootropics to promote brain health 6% • Health claims around increased immunity 6% • Products designed to increase relaxation 22% 7% 10% Functional beverages often include added ingredients to achieve a specific need state for the consumer. Collagen Source: Brightfield Group’s Evergi Platform, Consumer Insights (N = 5,000 US Gen. Pop.) and Social Listening Most Purchased Functional Beverages Top Functional Beverages Innovation and Marketing teams are constantly % of consumers purchasing keeping an eye on emerging product trends product in last 3 months and how consumers are reacting. When moving Energy Drinks forward with a new product, they want to ensure 15% Sports Drinks they have a strong understanding of who that 13% consumer is. With emerging trends, however, it’s Vitamin-Enhanced Water 9% not always clear who that consumer is or how they Electrolyte Water think of different products. 7% Premium Smoothies 6% As the data shows, Energy Drinks and Sports Drinks Nitro/ Cold Brew are the two most purchased functional beverages. 6% Protein Powder Both have been on the market for decades and 5% are widely available. However, the difference in the Coffee Shots Energy Drink consumer and Sports Drink consumer 5% Nutrient-Infused Coffee is vast and should be strongly understood by the 4% teams creating those products. Ionized/ Alkaline Water 4% Turmeric Tea In this report, we’ll explore the consumers of the top 4% functional beverage products to uncover how they Kombucha 3% compare, contrast, and what this means for brands Post-Workout/ Recovery Drinks looking to identify their next innovation. 3% Matcha Tea or Latte Powder 3% Let’s dig in. Oat Milk Latte 2% As the category has matured, consumers have a plethora of drinks and functional ingredients to choose from. Source: Brightfield Group’s Evergi Platform, Consumer Insights (N = 5,000 US Gen. Pop.) and Social Listening Sports Drinks vs. Energy Drinks Sports drinks and energy drinks are two of the most widely consumed functional beverages in the United States, with 13% purchasing sports drinks and 15% purchasing energy drinks. Though these categories bear a number of facial similarities, the active ingredients in each can vary greatly. Energy drinks are infused with ingredients meant to improve energy, most commonly caffeine. Many are also marketed to help with weight loss and improve concentration. On the other hand, sports drinks are used by consumers as a replacement for water and electrolytes (minerals such as calcium, potassium, and sodium) which have been lost through the process of sweating from exercise. Consumers want sports drinks for healthy hydration while energy stays Energy Drink vs. Sports Drink in its lane. Consumer Social Media Use When it comes to ingredients, sports drinks consumers % of consumers that browse are more concerned with what they’re ingesting. social media platform Compared to energy drink consumers, sports Energy Drinks Sports Drinks drink consumers care more about additives in their Instagram beverages, having real ingredients, no added sugar, 61% 57% no artificial sweeteners, and no preservatives in the Snapchat products they consume. Purchasers 36% 32% of sports drinks also tend to be more TikTok concerned about health claims, especially 28% 22% when it comes to supporting heart health. LinkedIn Brands like Gatorade have always been 28% 32% about hydration but are now responding Twitter to this consumer need with a targeted 43% 46% product positioning. In general, there is more of online engagement around energy drinks. Energy drink purchasers seem to be more concerned Brands of these drinks have historically with the effect of the product rather than what is in it. made a bigger effort to create distinct Purchasing an energy drink appears to have a singular communities both in-person and purchase—to feel energized—while sports drinks online. In 2021, Red Bull has 5.2 million purchasers are looking for more nuanced health benefits. followers while Gatorade has a mere 60,000. The ability to show up on Energy drink consumers tend to skew younger, with these emerging online communities a greater number of Gen Z, Millennial, and Gen X has likely contributed to energy drinks’ consumers as compared to those who purchase sports skew towards younger consumers. drinks. This translates to their social media use—energy drink consumers over index on numerous apps typically associated with younger individuals, including Instagram, Snapchat, and Tik Tok. Comparatively, you are more likely to find a sports drink consumer on LinkedIn or Twitter. Source: Brightfield Group’s Evergi Platform, Consumer Insights (N = 5,000 US Gen. Pop.) and Social Listening Social Conversations One would assume the context of Top Topics Social Conversation conversations around sports drinks would by Share of Voice be sports or exercise. However, “hydration” dominates the topic of conversation around 70% 67% sports drinks. This makes sense as people 60% look to hydrate after a workout. But why isn’t 49% “exercise” part of the conversation? That’s 50% where energy drinks come in. 40% 30% Looking at posts about energy drinks, the 20% 15% 18% top topics of conversation are “energy” and 10% “exercise.” People seem to be more likely to talk about energy drinks in relation to their workout 0 Hydration Excercise Energy Exercise than sports drinks. They may look to an energy Sports Drinks Energy Drinks drink to hype them up before a workout. As the workout comes to a close, they’ll reach for a more sports-positioned beverage focused on hydration and recovery. Source: Brightfield Group’s Evergi Platform, Consumer Insights (N = 5,000 US Gen. Pop.) and Social Listening Turmeric Tea vs. Kombucha Two popular functional teas, kombucha and turmeric tea are used by a similar number of American consumers. 3.5% of the general population reports buying turmeric tea in the last 3 months, and 3.2% report buying kombucha in the last 3 months. Turmeric tea is high in curcumin—a chemical purported to have anti- inflammatory benefits. Popular health websites—such as Medical News Today—claim the tea can reduce arthritis symptoms, boost immune function, and help prevent and treat cancer. But like many claims we see in functional beverages, none of these claims have been thoroughly evaluated or approved by the FDA. Kombucha is, simply put, fermented fizzy black or green tea. The drink has been around for thousands of years and is purported to promote health by aiding digestion, boosting the immune system, and aiding in weight loss— though similar to turmeric tea, these statements have not been evaluated. Regardless, consumers can find kombucha on store shelves nationwide, and the adventurous may even use a SCOBY (symbiotic culture of bacteria and yeast) to ferment their own at home. Kombucha is used for bodily and mental health while consumers seek turmeric tea Top Consumer Need States for general well-being. Turmeric Tea Kombucha Kombucha has a younger userbase and is more common among Gen Z and Millennial purchasers than turmeric tea. Both sets of consumers skew towards the upper income tier, but turmeric tea 90% 91% does so to a greater degree than kombucha—which 90% 91% is still enjoyed significantly among lower income consumers. Though both sets of consumers have Sustainability90% Sustainability91% sustainability as their top need state, kombucha users 63% 76% significantly over index on relaxation and focus while 63% 76% turmeric tea purchasers 63% 76% are comparatively more in need of holistic wellness and Immunity Relaxation immunity. Lipton’s Turmeric 53% 58% Herbal Tea, found in the “Wellbeing” section of their 53% 58% website, aligns very well with the need states of those consumers. 53% 58% When it comes to ingredients, turmeric tea Holistic wellness Focus consumers are significantly more concerned about additives and tend to buy organic more frequently, though both consumer groups over-index on these attributes. On the other hand, kombucha consumers are more concerned about artificial sweeteners and have a stronger desire for probiotics. Source: Brightfield Group’s Evergi Platform, Consumer Insights (N = 5,000 US Gen. Pop.) and Social Listening Turmeric Tea Consumers Take a What do we mean by “Crunchier” Approach to Well-being. “crunchy?” When it comes to their attitudes on well-being, Consumers who are more likely to be a larger majority of Kombucha purchasers eco-minded, emphasize sustainable agree “reducing stress is a priority” than well-being practices, and look for those turmeric tea drinkers. Turmeric Tea are more attributes in the products they buy. likely to “focus on me time.” Interestingly, these attitudes play out in how each consumer group copes with stress. Turmeric tea drinkers deal with stress most often by getting enough sleep, while kombucha drinkers destress by engaging in media. Kombucha consumers tend to spend more time with friends and family while turmeric tea consumers spend comparatively more time in nature. Stress Reduction Tactics % of product purchasers that manage stress with tactic Kombucha Turmeric Tea Get enough sleep 26% 31% Engage in media 34% 30% 27% Go for a walk 22% 26% Friends or Family 17% 13% Spend time in Nature 18% Source: Brightfield Group’s Evergi Platform, Consumer Insights (N = 5,000 US Gen.

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