Functional beverages are having a moment

ARLINGTON, VA. — Beverages remain one of food retail’s strongest growth categories, generating nearly $295 billion in sales in 2025 and representing a 3% increase versus dollar sales in 2024, according to FMI – The Food Industry Association’s “Power of Beverage” report.

Nonalcoholic beverages, specifically, grew 5% in dollar sales versus 2024 and accounted for several of the top 20 retail growth categories. The momentum was led by energy drinks, up 15%, followed by carbonated beverages, coffee, weight control beverages, bottled water and milk.

“The beverage category represents a significant opportunity for the food industry to invest in innovative products that cater to grocery shoppers’ expanding preferences when purchasing beverages,” said Leslie G. Sarasin, president and chief executive officer of FMI. “To date, much research has been done about beverage tastes, trends and packaging, but there are few insights into how consumers are shopping for beverages and what their daily beverage repertoire entails. This research dives deep into the beverage habits of consumers to provide valuable insights for the food industry.”

Functional benefits have become a point of emphasis for consumers in the beverage category. The report found younger consumers, such as those in the Gen Z and millennial cohorts, are more likely to factor functional benefits into their beverage purchasing decisions, and sales for beverages offering mood support, immune health and digestive health are growing at double-digit rates. Formulations focused on wellness benefits such as hydration, protein and energy are on the rise as well, according to FMI.

Functional benefits have become a point of emphasis for consumers in the beverage category.

| Photo: Pure Leaf

“Consumers increasingly view beverages as solutions for a range of needs, including energy, hydration, protein and broader well-being goals, rather than simply as refreshment,” FMI said. “Growth is not limited to emerging products. Mainstream categories such as carbonated soft drinks, milk, coffee and tea are also gaining renewed momentum by aligning with trends around low or no added sugar options, functionality, personalization and enjoyment.”

The report compiled data from a May 2026 online survey of 2,003 US grocery shoppers age 18 or older, along with data and insights from market researchers Circana and Nichefire, to identify changes in beverage shopping behavior, consumer preferences and emerging opportunities.

In addition to functional benefits, consumers are emphasizing certain “better-for-you” attributes in their purchasing choices, the report said. The most popular claims include caffeine content, low or no added sugar, electrolyte content and natural flavors.

FMI identified that the next wave of opportunities is being driven by the same younger consumer cohorts, which are increasingly interested in protein, B vitamins, fiber, magnesium, amino acid and adaptogen claims.

“(Younger consumers) are less concerned with sugar reduction and artificial ingredients than older consumers and appear more motivated by what a beverage adds than what it removes, suggesting a focus on function may resonate more than a focus on restriction,” FMI said. “The result is a beverage marketplace where functionality is becoming more personalized, with different generations defining beverage benefits in distinct ways.”