How brands are making money from functional drinks

Beverage brands are capitalizing on the growing demand for active beverages among young, health-conscious consumers by introducing a growing number of new offerings, including protein-enhanced coffees and CBD-infused sodas.

The $160 billion global functional beverage market has become a lucrative segment, featuring multi-functional beverages that claim to promise taste and enjoyment as well as health benefits, as consumers look for convenient ways to meet their health goals.

“Efficiency drinks are drinks that will deliver results,” Sally Lyons Wyatt, senior vice president and senior advisor for consumer goods and food services at consumer information company Circa, told CNBC.

“Having fun is one thing, but it’s also about wanting to live a long, healthy life…do you want to drink a drink that’s just there, or do you want the drink to work hard for you?”

About 75% of millennials and 80% of Gen Zers consume active beverages ranging from energy drinks, probiotic drinks, and vitamin-enhanced drinks, according to EY’s most recent consumer beverage survey of more than 2,500 adults in the US and Brazil.

More than half of respondents said they are willing to pay for drinks that support their health and wellness goals, EY found.

Additionally, Circa’s 2026 beverage trends report showed that nearly 64% of consumers sometimes choose to drink as a beverage, and this rises to 70% among 25- to 34-year-olds, indicating an increasing desire to consume beverages as a meal replacement.

Starbucks launched protein coffees sold in its stores across the US, Canada, and Europe last year to capitalize on the boom in multi-purpose health drinks – the rise of ready-to-drink protein coffees in supermarkets is set to hit 2024.

“Functional beverages have become really popular in all kinds of food and beverage categories, and protein is probably at the forefront of that,” Starbucks’ EMEA Group Manager of Beverage Development Sam Henderson told CNBC.

“We sell [almost] cold protein foam like we do whites, and as you can imagine, whites are a very popular drink, and proteins are doing the same at the moment,” he said.

The wider industry is also looking to enter the market, with the French food and beverage conglomerate Danone most recently acquiring Steven Bartlett-backed protein drink maker Huel as part of a deal reportedly worth $1.15 billion. Huel offers nutrient-dense protein as a meal replacement.

Meanwhile, the soda giants PepsiCo again Coca-Cola he jumped back into the habit. Coca-Cola launched its prebiotic soda brand Simply Pop early last year in the US, and Pepsi acquired prebiotic soda pioneer Poppi in a $2 billion deal.

“I think our consumers – all consumers – are looking for products that give them practical benefits more than ever before. I think people are more educated than ever before about nutrition and what they’re putting into their bodies,” said Henderson.

As coffee chains, soda brands, and startups fight for a piece of the functional beverage market, many are charging a premium compared to traditional brands.

Prices for Starbucks’ in-store protein coffee range from about $5.75 to $6.75, while its protein-enhanced milk and cold protein foam can be added to any drink for an additional $1 and $2, respectively.. “They are absolutely a premium offering,” Henderson said.

TRIP, a UK-based health drink startup founded in 2019, sells drinks containing adaptogens and botanicals with ingredients ranging from CBD to magnesium.

A single TRIP drink can cost upwards of £2.00 ($2.60) and is available in supermarkets across the UK, as well as a few retailers in the US.

“TRIP is a premium product; it doesn’t sell as well as traditional soda,” TRIP founder Olivia Ferdi told CNBC. “We don’t make ordinary sodas; we create everyday health solutions, that customers see.”

Ferdi explained that six years ago, functional drinks were an emerging concept, but now they are a “basic consumer need” that people are willing to pay more for.

Additionally, sourcing key ingredients like magnesium, lion’s mane, and ashwagandha — a medicinal plant believed to reduce stress — requires different standards than traditional soda production.

“Our consumers aren’t just paying for refreshments; they’re investing in functional benefits that support their mental clarity and daily bottom line.”

There are doubts about how well supplements and vitamins like magnesium and collagen actually work, experts and nutritionists previously told CNBC. They cautioned that supplements are not closely regulated by the Food and Drug Administration in the US and that consumers should aim to get essential nutrients from food instead.

In fact, the UK’s Advertising Standards Authority (ASA) banned TRIP advertising for Cucumber Mint, Mindful Blend Drink in 2025, ruling that it made misleading claims about the drink’s health benefits. This includes falsely suggesting that the drink can reduce stress and anxiety, and includes unapproved diet and health claims.

TRIP declined to comment on the ASA’s decision, but Ferdi told CNBC last week that TRIP products are developed by a team that includes experts in nutrition, food science, and culinary innovation.

“We also work closely with our design experts, legal experts, and manufacturing partners throughout the development process to ensure that our products meet the appropriate standards in each market in which we operate,” he added.

Both Starbucks and TRIP say Gen Z and millennials are driving demand for their active products, with social media playing a role in increasing exposure.

TRIP, which became TikTok Shop UK’s No.1 drink brand in January 2025, used a “social first” strategy to tap into this young consumer base.

“Social media has had a huge impact on this, turning functional drinks into a status symbol,” says TRIP founder Ferdi. “On platforms like TikTok and Instagram, choosing a drink that supports your mindset has become a life statement.”

In fact, 72% of Gen Z look to social media for beverage-focused health trends, according to 2025 data shared with CNBC by food and beverage analytics firm Datassentials.

“They are there [young consumers] “It’s going to drive growth over the next five years, because they’re entering those high-income years and that gives them purchasing power,” explains Lyons Wyatt of Circana.

“If they’re going to pay for something, they want to get the most value out of it, so you’re going to see coffees with protein and other benefits maybe over some of those that might be good old fashioned options,” he added.