Beverages: Gen Z demands pick-me-ups with functional benefits
- InsightTrendsWorld
- Apr 3
- 8 min read
Here is a detailed summary of the trends discussed in the article:
Why it is the topic trending:
Growing Consumer Demand for Functionality: Consumers are increasingly looking for more than just basic energy or refreshment from their beverages. They actively seek added health and wellness benefits.
Gen Z Leading the Way: Younger consumers, particularly Generation Z, are at the forefront of this trend, actively seeking out beverages that offer cognitive, mood-boosting, relaxation, and other functional benefits.
Focus on Wellness and Health: There's a broader societal focus on health and wellness, and beverages are increasingly seen as a way to incorporate these benefits into daily routines.
Innovation in the Beverage Industry: Beverage companies are responding to this demand by innovating and incorporating functional ingredients like medicinal mushrooms, vitamins, antioxidants, and probiotics into their products.
Overview:
The article discusses the rising trend of consumers, especially Gen Z, demanding functional benefits from their coffee and tea. This includes seeking beverages that offer cognitive enhancement, stress relief, immunity support, and gut health benefits. The trend is evident in the growing popularity of cold coffees infused with ingredients like medicinal mushrooms and teas with added vitamins and antioxidants.
Detailed Findings:
34% of consumers demand functional beverages according to Westrock Coffee’s Q1 2025 The Blend report (survey of 1,000 consumers).
Gen Z is driving demand for specific benefits:
38% want coffee with cognitive/mood-boosting benefits.
35% desire coffee with relaxation/stress relief benefits.
20% are interested in hydration and immune support coffees.
17% want digestive and gut-health drinks.
The US refrigerated ready-to-drink (RTD) tea and coffee category reached $1.3 billion in sales for the year ending Nov. 3, growing 6.5% in dollars and 4.6% in units (Spins MULO data).
Medicinal mushrooms like lion’s mane and chaga are more common in cold coffees and teas than hot coffee.
Examples of functional coffee: Pop & Bottle offers RTD canned coffees with reishi and lion’s mane for mood-boosting and collagen for skin/gut health. Four Sigmatic released a half-caffeine mushroom coffee blend.
45% of shoppers want immune support teas (Westrock data).
Demand for specific tea ingredients: 6% want B vitamins, 43% antioxidants, and 32% probiotics (Datassential insight).
Younger consumers are using tea to moderate caffeine intake.
Boomers also desire functional benefits in coffee: 37% want cognitive and mental focus, and 34% seek relaxation and stress relief.
Gen Z might prefer functional mushroom-infused coffee for stress relief, while Boomers might find stress relief in the ritual of traditional coffee.
Key Takeaway:
The key takeaway is that functional benefits are becoming a significant driver in the coffee and tea market, with Gen Z leading the demand for beverages that offer specific health and wellness advantages beyond just energy.
Main Trend:
The Functional Fuel Shift: Consumers, especially younger generations, are increasingly viewing their coffee and tea not just as sources of energy but as vehicles for functional ingredients that support various aspects of their physical and mental well-being.
Description of the trend (please name it):
The Functional Fuel Shift: This trend signifies a fundamental change in how consumers perceive and consume coffee and tea. It moves beyond simple taste and caffeine content to prioritize added health benefits. Consumers are actively seeking out ingredients that can improve focus, mood, stress levels, immunity, and gut health, integrating these beverages into their wellness routines.
What is consumer motivation:
Consumers are motivated by a desire to proactively manage their health and well-being through convenient and enjoyable means. They want beverages that can enhance their cognitive function, help them relax, boost their immunity, and support their overall physical and mental health in a seamless way.
What is driving trend:
This trend is primarily driven by:
Increased Health Awareness: Greater consumer understanding of the link between diet and well-being.
Gen Z Preferences: This digitally native generation is often more informed and proactive about health and wellness, influencing broader consumption patterns.
Innovation by Beverage Companies: The industry's response to consumer demand by developing and marketing products with functional ingredients.
Social Media Influence: Platforms like TikTok and Instagram play a role in popularizing functional ingredients and beverages.
What is motivation beyond the trend:
Beyond the specific functional benefits, consumers are also motivated by:
Convenience: Ready-to-drink functional coffees and teas offer an easy way to incorporate these benefits into busy lifestyles.
Personalization of Wellness: Consumers are looking for products that cater to their specific health needs and preferences.
Experiential Consumption: Novel ingredients like medicinal mushrooms add a unique element to the drinking experience.
Description of consumers article is referring to:
The article primarily refers to Gen Z consumers, characterized by:
Age: Typically born between the mid-1990s and the early 2010s.
Lifestyle: Often digitally savvy, health-conscious, and interested in experiences and personalization. They have grown up with a wide variety of beverage options and are open to trying new and innovative products.
While gender and specific income levels are not detailed in the article, it's implied they represent a significant and influential consumer segment driving trends in the beverage market.
The article also mentions Boomer consumers (born between the mid-1940s and mid-1960s) who share some of the functional benefit interests but may differ in their preferred beverage formats and consumption habits.
Conclusions:
The article concludes that the demand for functional benefits in coffee and tea is a significant and evolving trend, driven largely by Gen Z consumers. Beverage companies need to recognize and cater to these demands by offering innovative products with specific functional ingredients.
Implications for brands:
Product Innovation is Key: Brands must invest in research and development to create coffee and tea products with scientifically-backed functional ingredients that resonate with consumer needs.
Targeted Marketing: Marketing efforts should clearly communicate the specific functional benefits of their products, targeting the relevant consumer segments (e.g., highlighting cognitive benefits for students and young professionals).
Ingredient Transparency: Consumers, especially Gen Z, value transparency. Brands should clearly label ingredients and their associated benefits.
Format Diversification: Offer functional options in various formats, including ready-to-drink, pods, and whole bean/leaf options to cater to different consumption preferences.
Implication for society:
Increased Health Consciousness: This trend may contribute to a more health-conscious society where consumers actively seek out products that support their well-being.
Potential for Healthier Beverage Choices: The availability of functional options might lead to consumers choosing beverages with added benefits over less healthy alternatives.
Shifting Beverage Consumption Patterns: The dominance of traditional coffee and tea might be challenged by the rise of these functional alternatives.
Implications for consumers:
Wider Range of Beverage Choices: Consumers will have access to a broader selection of coffee and tea products tailored to specific needs.
Potential Health Benefits: Incorporating these functional beverages into their diet could offer various health advantages.
Possible Higher Prices: Products with specialized functional ingredients might come at a premium.
Need for Informed Choices: Consumers need to be informed about the efficacy and appropriate use of different functional ingredients.
Implication for Future:
Continued Growth of Functional Beverages: The functional beverage market is likely to continue expanding and diversifying.
Further Ingredient Innovation: We can expect to see the emergence of new and novel functional ingredients in coffee and tea.
Personalized Beverages: The future might see more personalized beverage options tailored to individual health needs and preferences.
Consumer Trend (name, detailed description):
Wellness-Driven Hydration: This consumer trend describes the increasing desire for beverages that not only hydrate but also provide tangible health and wellness benefits. Consumers are proactively seeking drinks that support their physical and mental well-being, moving beyond basic hydration needs.
Consumer Sub Trend (name, detailed description):
Targeted Benefit Seeking: Within the broader wellness trend, consumers are increasingly specific about the benefits they desire from their beverages. They are not just looking for general "health," but rather for products that offer cognitive enhancement, stress reduction, improved sleep, better digestion, or immunity support.
Big Social Trend (name, detailed description):
The Proactive Health Movement: This reflects a larger societal shift where individuals are taking more responsibility for their own health and well-being. This involves actively seeking information, making informed choices about diet and lifestyle, and utilizing products and services that support their health goals.
Worldwide Social Trend (name, detailed description):
The Global Wellness Economy: While the article focuses on the US, the pursuit of health and wellness is a global phenomenon. Consumers worldwide are increasingly interested in products and services that enhance their well-being, making functional beverages a trend with international relevance.
Social Drive (name, detailed description):
Self-Optimization: A core social drive behind this trend is the desire for self-improvement and optimization. Consumers are looking for ways to enhance their physical and mental performance, and functional beverages are seen as a convenient tool to achieve this.
Learnings for brands to use in 2025:
Understand Specific Gen Z Needs: Deeply analyze what specific functional benefits resonate most with Gen Z within the coffee and tea categories.
Invest in Credible Ingredients: Utilize functional ingredients with scientific backing and clearly communicate their benefits to build trust.
Focus on Both Hot and Cold Options: While cold coffee is popular with Gen Z, don't overlook the potential for functional hot tea and coffee options, especially considering Boomers' preferences.
Leverage Digital Platforms: Utilize social media and digital marketing to reach Gen Z consumers and educate them about the functional benefits of your products.
Consider Flavor and Experience: While functionality is key, taste and overall drinking experience remain crucial for repeat purchases.
Strategy Recommendations for brands to follow in 2025:
Develop Product Lines with Targeted Benefits: Create specific product lines of coffee and tea that clearly highlight key functional benefits like "Focus Blend" or "Immunity Boost Tea."
Partner with Health and Wellness Influencers: Collaborate with relevant influencers to promote the benefits of your functional beverages to their target audiences.
Emphasize Sustainability and Ethical Sourcing: Align with the values of health-conscious consumers by prioritizing sustainable and ethically sourced ingredients.
Offer Variety in Formats and Flavors: Provide a diverse range of formats (RTD, concentrates, DIY mixes) and appealing flavors to cater to different consumer preferences.
Gather Consumer Feedback: Continuously monitor consumer feedback and adapt product offerings to meet evolving needs and desires within the functional beverage space.
Final sentence (key concept) describing main trend from article:
The modern consumer is actively seeking beverages that transcend basic refreshment, demanding functional ingredients in their daily coffee and tea to enhance their overall health and well-being.
What brands & companies should do in 2025 to benefit from trend and how to do it:
In 2025, brands and companies should strategically innovate their coffee and tea offerings by incorporating well-researched functional ingredients and clearly communicating the specific health benefits to consumers, particularly the influential Gen Z demographic, through targeted marketing and diverse product formats.
Final Note:
Core Trend:
Name: Functional Beverage Integration
Detailed Description: The increasing incorporation of health and wellness-enhancing ingredients into mainstream coffee and tea products to meet consumer demand for added benefits beyond basic hydration and energy.
Core Strategy:
Name: Benefit-Driven Innovation
Detailed Description: Focusing product development and marketing efforts on clearly defined and scientifically supported functional benefits that resonate with specific consumer needs and preferences.
Core Industry Trend:
Name: Wellness-Focused Beverage Market Expansion
Detailed Description: The significant growth and diversification of the beverage industry driven by consumer interest in health and wellness, with functional ingredients becoming a key differentiator.
Core Consumer Motivation:
Name: Proactive Health and Self-Care
Detailed Description: The fundamental consumer desire to take a proactive role in managing their health and well-being through convenient and enjoyable everyday choices, such as functional coffee and tea.
Final Conclusion:
The demand for functional coffee and tea represents a significant shift in consumer behavior, driven by a growing emphasis on health and wellness, particularly among Gen Z. Brands that can effectively innovate and communicate the benefits of their functional beverage offerings are poised for success in the evolving beverage landscape.
Core Trend Detailed:
Name: The Functional Fuel Shift
Detailed Summary: This core trend encapsulates the evolving role of coffee and tea in consumers' lives. No longer solely perceived as sources of caffeine or comforting rituals, these beverages are now increasingly viewed as opportunities to ingest functional ingredients that provide specific health and wellness advantages. This shift is heavily influenced by a more health-conscious consumer base, especially the younger Gen Z demographic, who are actively seeking out products that can support their cognitive function, manage stress, boost immunity, and improve overall well-being. The trend is characterized by the integration of ingredients like medicinal mushrooms, adaptogens, vitamins, antioxidants, and probiotics into various coffee and tea formats, including ready-to-drink options, catering to busy lifestyles. Brands that embrace this trend are moving beyond traditional formulations and marketing to focus on the tangible health benefits their beverages offer, thereby tapping into a growing market of consumers who prioritize proactive health management.
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