
Functional drinks surge 34% as Gen Z drives demand but clarity remains key
The UK functional drinks market has grown by 34% year-on-year to £178m, propelled by Gen Z seeking healthier alternatives. Retailers aim to simplify messaging and enhance shopper education amid strong innovation and rising demand across grocery and convenience sectors.
Walk into almost any retail outlet today and the surge of functional drinks is unmistakable. From products targeting gut health and clean energy to those fortified with added vitamins or infused with CBD, functional drinks have cemented their place on shelves across grocery and convenience stores alike. This growth is substantial, with the category now worth £178 million—an impressive 34% increase year on year—significantly outpacing the modest 2.4% growth seen in total soft drink sales. Grocery stores dominate with 71% of the volume, though convenience stores have seen notable 15% growth in the past year, underlining broad-based demand. Despite these strong numbers, there remains vast untapped potential for the sector to expand further.
Yet, the category faces challenges that could hinder its acceleration. Many consumers encounter an overwhelming array of scientific jargon and a confusing plethora of claims when shopping for functional drinks. The lack of straightforward messaging means shoppers often struggle to differentiate products or understand their benefits. Retailers are responding with initiatives such as better-for-you chillers, wellness zones, and dedicated functional bays. Shelf-edge blockers that group products by benefits—like clean energy, gut health, or vitamins—help reduce consumer friction and improve visibility. However, future growth hinges on brands raising their game alongside stronger brand-retailer partnerships to educate consumers more effectively.
Critical to broadening the category’s appeal is simplifying product offerings and messaging. Functional drinks need to move beyond niche ingredients and complex propositions to flavours and benefits that resonate with mainstream consumers and inspire habitual purchase. Clear, benefit-first language such as energy boost, gut health support, or immunity enhancement should become the norm, ensuring messaging is accessible from value-focused stores to premium outlets. More approachable pricing will also be key to fostering regular consumption rather than one-time trials. Industry collaboration on shopper education and aligning activation efforts around shared consumer occasions could strip away the noise currently cluttering the category.
Consumer trends reinforce the category’s promise, particularly among younger shoppers. Generation Z, in particular, is a driving force behind the functional drinks boom, with many choosing these beverages as healthier alternatives to coffee or alcohol. A recent report from Ocado Retail highlighted a 54% year-on-year increase in sales of functional drinks like kombucha, kefir, and matcha, with 61% of Gen Z consumers drinking these products multiple times a month. There is also a broader lifestyle shift favouring beverages containing prebiotics, probiotics, and fermented ingredients, reflecting heightened awareness of gut health and overall wellbeing.
The market’s dynamism is further underscored by innovations responding to evolving consumer preferences. Wellness trends emphasizing preventative health, convenience, natural ingredients, and sustainability are driving demand for a range of functional drinks. These include plant-based variants, alcohol alternatives, and formulations targeting stress relief or enhanced focus. Consumer desire to balance indulgence with health benefits—the so-called 'permissible yet functional indulgence'—is propelling the popularity of probiotic teas, protein-rich coffees, and nutrient-dense smoothies, particularly among Millennials and Gen Z.
Amidst this functional drinks upsurge, established players in adjacent categories are also responding. For example, Fevertree Drinks, known for its premium mixers and sodas, recently reported adjusted core profits slightly exceeding expectations, capitalising on the growing non-alcoholic trend. The company’s partnership with U.S. beer giant Molson Coors, which acquired an 8.5% stake in Fevertree, reflects a strategic push to diversify offerings and tap into the expanding functional drinks and mixers market, particularly across the Atlantic.
Despite the impressive growth, experts caution that the category must meet the baseline standards set by traditional soft drinks: flavour, price, and clarity must be upfront. Functional drinks that match even a fraction of these attributes will likely see the market’s flywheel spin faster, unlocking enormous opportunities both commercially and for public health. This evolving landscape offers optimism that with greater focus on consumer clarity, inclusivity, and accessible innovation, functional drinks can transform from a niche segment into a mainstream staple.