Fervor for health, function and flavor in beverages – article

Consumers have always turned to beverages for function — think water for hydration and coffee or tea for energy and focus. But today’s modern beverages go a lot further. Store shelves are filled with beverages that enhance cognitive function, support stress response, promote younger-looking skin and maintain muscle mass.

It is abundantly clear that consumers see beverages as a perfect package to deliver on these health and wellness goals. But they aren’t pushovers: Consumers still want beverages to taste great without too much sugar or artificial ingredients. And they seek sustainability while demanding good value.

The landscape for beverages is changing. According to Amber McKinzie, marketing manager for sugar reduction at Cargill, “Consumers are more thoughtful and deliberate in their choices. For today’s health-conscious consumers, that means actions like scrutinizing product labels, watching added sugar levels and avoiding artificial sweeteners.”

The market research is also clear — consumers expect a lot from their beverages. According to a recent report from Nielsen IQ, there are three key trends shaping functional beverages: a growing focus on wellness, a desire for innovation and an interest in products that address specific health concerns.¹ Demand for these beverages, the report noted, is particularly high among younger shoppers (Millennials and Gen Z) who are prioritizing wellness but also seek beverages that align with their lifestyles and health goals.

This is translating into growing purchase and use of functional beverages in the United States. An Innova Category Survey in 2024 found that 34% of U.S. consumers purchased energy drinks in the last 12 months, while about 1 in 5 purchased sports/functional drinks and functional waters. Consumption data underscores the popularity of these beverages, with more than 2 in 3 consumers now saying they drink at least one of these beverages on a weekly basis.

There are big opportunities in functional beverages, but brands attempting to meet all of these requirements may encounter formulation challenges — and overcoming these challenges requires both an understanding of consumer behaviors and the ingredients and techniques it takes to build better beverages.

The first step is understanding the target customer and what they may or may not be willing to accept. This will help establish priorities in sugar reduction, taste, function and value.

Sugar reduction gains momentum

Sugar content continues to be a hot issue, McKinzie said. “Surveys continue to track an American shopper disillusioned by sugar, with the latest data from the International Food Information Council finding three-quarters of U.S. consumers are trying to limit or avoid its consumption.”

Beverage brands are taking note. “In the last year, nearly 40% of all new product launches carried a sugar-related claim. While consumers still enjoy sweetened beverages, they’re eager for options with little or no added sugar,” McKinzie said.

This trend is apparent from U.S. sales data. “Sales of beverages containing stevia are on a tear, delivering an 18% increase in dollar sales and a 20% increase in unit sales year-over-year,” McKinzie said. “Contrast that with sales for drinks made with traditional nutritive sweeteners, which saw unit sales decline. It’s clear which products have momentum in the marketplace.”

Artificial sweeteners aren’t faring much better. They’re nearly flat in unit sales growth and posted modest revenue gains. “When you look at sweeteners, it’s the non-artificial options that are growing, and of those, stevia leads the way,” said McKinzie.

Consumers are not the only ones driving the rise in reduced-sugar products. Regulations, governments and taxes around the world are supporting less sugar intake as a health priority and adding pressure on brands to lower their products’ sugar and calorie counts.

Brands are also under tremendous pressure to meet publicly announced sugar-reduction goals. “Consumers are watching their sugar intake, regulatory bodies are keen to see CPG brands reduce sugar levels, and even shareholders are pushing for healthier choices,” McKinzie said.

Adding functional ingredients brings other challenges. One of the biggest is delivering that all-important great taste, added Jennifer Berndt, category marketing manager for beverages at Cargill. “While consumers are attracted to the health positives they associate with botanicals, proteins, vitamins and minerals, many of those ingredients come with negative flavor attributes,” she explained.

Staying ahead of the curve on innovation is another thing brands and manufacturers need to keep in mind. While this is important, Berndt noted, in the face of recent inflation, price has also become a big purchase driver. “Consumers are still willing to make trade-offs,” she said. “They may stretch their budgets by purchasing private-label brands on some occasions yet indulge in a premium brand they love at other times. The lowest-priced product doesn’t always equate to the best value in consumers’ minds.”

Supporting beverage formulation sustainably

Brands must establish their priorities and then work with an experienced supplier to help select ingredients that provide what they need. Cargill, for example, has a broad portfolio including both nutritive and non-nutritive sweeteners, plus other complementary ingredients, giving them a comprehensive toolbox to support beverage formulation. For brands targeting reduced or no-sugar-added formulations, that includes stevia solutions like ViaTech^® stevia leaf extract, EverSweet^® stevia sweetener and Zerose^® erythritol.

“We’ve worked with stevia for nearly two decades, investing hundreds of thousands of hours to unlock the secrets of the stevia leaf. It’s an innovation journey that has led to huge leaps in the taste and functionality of our stevia sweeteners, evidenced most clearly by our EverSweet stevia sweetener,” said McKinzie.

EverSweet, which consists of Reb M and Reb D, gets closer to the sweetness quality of sugar. “That great taste gives EverSweet a decisive edge over other stevia products, offering unparalleled versatility in application, minimizing the need for flavor modifiers and delivering deeper sugar reductions than were possible before,” McKinzie explained.

In addition to significant sugar and calorie reductions, EverSweet also delivers compelling cost-in-use numbers compared to sugar and HFCS (high fructose corn syrup), she added.

To help customers quantify EverSweet’s full value, Cargill developed a model to compare the sweetener’s economic and environmental impacts with other sweetening solutions. By combining cost-in-use and sustainability metrics, the model provides a comprehensive, quantifiable view of EverSweet's impact.

“When we walk customers through the model, they are often surprised by how relatively small reductions in sugar often deliver cost-optimization benefits,” McKinzie explained. “Given the inflationary price pressures facing consumers and margin pressures facing today’s brands, those savings matter.”

Many beverage manufacturers also have set bold goals around water, land use and carbon emissions, McKinzie noted. “Ingredient sourcing will play a major role in their ability to meet those targets. Agronomic production consumes significant amounts of land and water — whether for sugar beets or stevia. In contrast, we’ve found fermentation requires fewer land and water resources and a reduction in carbon footprint.”

While EverSweet checks off most of the boxes — from affordability to sustainability metrics — Cargill’s solutions do go beyond stevia. For example, in some applications, it may be necessary to use sweetener blends, pairing a high-intensity option like stevia with other complementary sweeteners, McKinzie added. “Erythritol delivers up-front sweetness, rounds out sweetness quality and builds back mouthfeel without adding calories, making it a great complement to stevia.”

When used at low levels that qualify for the flavorings with modifying properties (FMP) distinction, both EverSweet and erythritol label as natural flavors. Other supporting players include hydrocolloids like pectin and carrageenan, which can help replace missing body in a soft drink or add creaminess to a reduced-sugar dairy beverage.

Fundamentally, flavor systems in beverages are very complex, so Cargill continues to innovate. Its newest sweetener system, EverSweet stevia sweetener + ClearFlo^® natural flavor, brings additional benefits including flavor-modifying properties. It can reduce off-notes from active ingredients, such as proteins, vitamins, minerals and electrolytes, making it a great fit for functional beverages. At the same time, it enhances characterizing flavors, addresses the solubility and dissolution issues of Reb M, and it’s label friendly.

At the end of the day, even experienced brands need partners in innovation to meet targeted consumer preferences and demand.

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