The sports drinks market is continuing to diversify, with consumers driving demand for healthier sports drinks products. This demand for healthy drinks-coupled with growing niches that have very specific functional needs-is likely to open up new opportunities for brands that fine-tune their formulations and marketing in response.
In the last year alone, the sports drinks market has undergone a variety of shifts, with a further push into the functional space opening up new verticals for sports drinks brands. Data from Innova Market Insights indicates that sports drinks are now “active nutrition” products, with significant increases in the number of sports drinks that are incorporating functional ingredients. Innova says that while the primary niches have remained the same-energy and stamina, hydration and recovery, muscle building and maintenance-the mainstream adoption of sports nutrition is expected to bring new opportunities.
As consumers look for healthier and more functional sports drinks, manufacturers are diversifying product offerings with healthier products and working to make new kinds of functional sports drinks that address consumer health concerns.
Here are the seven most significant market trends that are currently developing in the sports drinks industry.
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Healthy, Functional Products Lead the Way
The sports drinks market’s push into the functional beverage space has gained momentum, with more manufacturers incorporating functional ingredients and functional health claims as a means of differentiating their products.
Jim Tonkin, president and owner, Healthy Brand Builders (Scottsdale, AZ), says that consumer demand for healthier products is now opening up opportunities for smaller brands to compete. Says Tonkin: “I think there’ll be healthier products coming to market that will continue to grow the sports nutrition space, highlighting functional ingredients specifically. It could be for muscle recovery, circulation, cardiovascular health, or even bone health. I’m working with a number of companies now that are developing these beverages, and it’ll be interesting to see whether or not Gatorade pays any attention to these smaller competitors.”
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And sugar content is still a concern, both for consumers and manufacturers. Will McCormack, business development manager, nutrition, Synergy Flavors (Wauconda, IL), says that reducing sugar content is an ongoing trend, as the marketing around sports drinks has shifted away from athletes and toward a general consumer market.
“When you think about what traditional sports drinks were formulated for, you realize they’re not the kind of beverage that people sitting at a desk all day should be consuming,” McCormack says. “They were designed for exercise recovery, which is why the sugar content was so high. But now, we’re seeing a lot of requests from manufacturers who are looking to reduce the sugar content and replace the sugar with ingredients like protein.”
Elyse Lovett, marketing manager at ingredients firm Kyowa Hakko (New York City), says that the continued development of functional sports drinks will involve replacing unhealthy ingredients with healthy ones. “A lot of people are looking for an energy-type drink without the caffeine, something that gives more of a sustained boost,” she says. “We’re also seeing more natural sugar in these products now.”
Lovett says that manufacturers are starting to examine different kinds of sugars and sweeteners, with alternatives like sugar alcohols, sugars derived from fiber, and natural sugars increasing in popularity.
Data provided by Innova Market Insights indicates that sugar claims are starting to stabilize in the industry. Claims like “sugar free,” “no added sugar,” and “low sugar” grew continuously starting in 2014 and peaked in 2016, with over one-third of new product launches incorporating some kind of reduced sugar claim.
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Clean Labels, Single-Ingredient Formulations: Transparency Becomes a Priority
Consumer trust in sports drinks brands is now hinging on transparency, with more and more consumers expecting a clean label approach from sports drinks manufacturers.
McCormack says that one major priority-and a challenge in the beverage industry-involves understanding what consumers perceive “clean label” to be. “We’re trying to better understand the consumer perception of clean label. A colleague of mine spoke at a conference in Wisconsin late last year about formulating dairy protein beverages. We represent the flavor industry, but the stabilizer industry is seeing challenges right now because consumers perceive carrageenan as having negative connotations.”
Synergy Flavors nutrition applications technologist Rachel Dannemeyer says that moving toward a clean label approach has resulted in changes to the formulations that sports drinks manufacturers are using. “We’re seeing botanical ingredients gaining a lot of traction. Consumers want the functional benefits of botanicals, but with a clean-label approach.”
This emphasis on transparency is also manifesting as a push toward single-ingredient and single-function products. But Lovett says the single-ingredient focus isn’t just confined to sports drinks.
“We’re starting to see more 5-Hour Energy type products coming out,” Lovett says. “But most of these energy shots (that have traditionally occupied the market) have had a whole slew of different ingredients. The trend is now moving toward products with only one or two ingredients, and they’re geared toward a specific benefit like concentration.”
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Kombucha and Probiotics Reach the East Coast
While not traditionally seen as a sports drink, experts say kombucha is well positioned to enter the sports market-and several companies are already marketing kombucha as a sports nutrition supplement.
Lovett says that kombucha is a natural fit for the sports drinks market thanks to its various functional benefit claims. “Kombucha is becoming more of a trend on the East Coast. A lot of what gets put out on the West Coast is cutting-edge, and the East Coast follows,” she explains. “I do think there’s a place for kombucha in the sports market, because it’s about detox, and it’s full of pre- and probiotics.”
Tonkin says that probiotic sports drinks are an emerging market in the United States that may hold promise, but cautions that the science around probiotics is still evolving. Says Tonkin: “In a lot of Asian and European countries, starting your day with a probiotic load is quite common. Kombucha and probiotics are growing in popularity in the United States, but for the wrong reasons.”
“I’m very concerned that consumers are being misled about probiotics,” Tonkin says. “How do we know that 3 billion CFUs of a single strain of probiotic is right for us?” In his opinion, probiotic sports drinks will likely require more vetting and study as the niche continues to grow.
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Amino Acids and RTDs: A Good Match?
Amino acid workout beverages aren’t new to the U.S., but traditionally, they haven’t had much of a presence in the ready-to-drink (RTD) space. Now, though, that trend appears to be changing.
McCormack says that amino acid RTDs are starting to see growth. “Cellucor C4 is a well-known pre-workout product that has amino acids, and they recently launched an RTD version,” he says. “I think you’ll see those products coming out in RTD format because it’s more convenient.”
Lovett says that Kyowa Hakko already sells an amino acid drink, and the ingredient supplier is starting to see more amino acids as part of RTD sports drinks formulations.
“We have a lot of sports nutrition companies coming to us because our amino acids are made through fermentation rather than chemical synthesis,” Lovett says. “So yes, RTD amino acid sports drinks is definitely a growing area.”
Two such drinks, Vitamin Well’s VW+ 001 and its sugar-free cousin VW+ 002, combine electrolytes and vitamins with the branded L-Alanyl-L-Glutamine supplement Sustamine to provide athletes with an added energy boost during workouts, reduce muscle breakdown, and improve recovery time.
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Product Categories Continue to Blur
The definition of “sports drink” is still undergoing an evolution as the category boundaries continue to shift and blur.
Data provided to Nutritional Outlook by Innova Market Insights indicates that sports nutrition products are now entering the mainstream, where products typically seen as sports drinks are taking on mass-market appeal. These “active nutrition” drinks are now incorporating performance-oriented ingredients and making specific functional claims that are designed to appeal to a larger market.
Tonkin says that the personal nutrition market is a growing segment, with powdered products seeing growth.
“There’s a trend in the United States around personal nutrition,” he says. “People are taking charge of what goes into their bodies and how it gets there. I think that’s interesting, and it’s getting people to think about what they want to drink and how they want to drink it. So, if you like almond milk and you want to add some additional protein, you can open up a stick pack of protein and add it to your morning smoothie.”
Tonkin adds that this shifting of categories is resulting in a variety of hybrid and crossover products that combine functions. “There’s a new generation of sports drinks that are taking over. They don’t call themselves sports beverages, but they can be used in the same crossover fashion. The sports nutrition space is morphing from the original players that called themselves sports drinks, like Gatorade and Powerade. I’m working with a number of companies right now that are developing functional sports beverages. It’ll be interesting to see if Gatorade pays any attention to these smaller competitors.”
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Changing Consumer Demands Influence Marketing Strategies
The development of a healthier kind of sports drink means brands will have to start marketing their beverages in a unique new way.
According to Tonkin, more sports drinks brands are emphasizing clinical trials in their marketing assets to meet consumer demand for transparency in advertising. “A lot of companies will say, ‘I know these three ingredients work individually, so if I put them together I have an exponentially better beverage.’ But unless you do a clinical trial on the finished product, you can’t prove that three is better than one. Consumers want to know the whole production chain-they’re demanding truth and transparency in advertising, and I think that’s going to be the norm going forward.”
Lovett notes that digital media is increasingly becoming an important platform for sports drinks brands, with influencer marketing in particular serving as an essential strategy. “Influencer marketing is critical, especially for targeting millennials,” she says. “Sports drinks are marketed at generation X and millennial consumers, and those are the kinds of consumers who are following these influencers.”
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Nootropic Drinks Market Taking Shape
The nootropic drinks industry is starting to grow, with a focus on the eSports niche. Lovett says that this industry growth is a reflection of a larger trend. “Brain-health supplements for competitive gamers is an emerging niche market,” she states. “We’ve seen more inquiries in the last six months to gear our citicoline supplement more toward gamers. It’s not just nootropic sports drinks; it’s nootropic supplements, period,” that are gaining popularity.
Marketing to eSports gamers is complicated, says Tonkin, and a successful nootropic-drink-for-gamers strategy will involve out-marketing the energy drinks that have already penetrated the market while also appealing to the gamers themselves. “Most of these gamers are Millennials, who want to find things for themselves that they can call their own. It’s a convoluted marketing game-it’s almost like an underground network. Everyone is looking for the next Mecca, and I don’t think anything on the market is there yet.”
He adds that despite the marketing challenges, nootropic drinks for professional gamers is starting to see growth as a niche.
While the eSports market has typically been the domain of energy drink brands like Red Bull and Monster Energy, newer, more specialized brands like m4k eSports, Runtime, and GFUEL are starting to develop products specifically designed for professional gamers.
But it’s not just eSports and professional gamers that are fuelling the growth of nootropic drinks. Brain health and mental performance supplements are growing in popularity among students, entrepreneurs, scientists, and those employed in high-pressure environments where there’s often an oppressive demand to succeed.1
Lovett says the next big opportunities in sports drinks will involve formulations tailored toward mental energy and focus. “Mental energy and focus speaks to every area of sports nutrition. It appeals to the competitive gamers, the golfers, the professional runners, the basketball players, and even the bodybuilding industry. Mental clarity and energy are critical to helping them win.”
1. BrÃ¼hl A et al., “Drugs, games, and devices for enhancing cognition: Implications for work and society,” Annals of the New York Academy of Sciences, vol. 1369, no. 1 (April 2016): 195-217
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