What could impact the sports drinks category in 2021?

March 3, 2021
Mike Straus

Here’s what experts predict could shake up the sports drinks market in 2021.

The COVID-19 pandemic has had unexpected effects on every industry, and the sports drinks space is no exception. And contrary to what you might assume, not all of the disruptions have been bad. For instance: while consumers have indeed been staying away from gyms and brick-and-mortar stores, market analysts say other channels are showing strong activity that demonstrates a fundamental resilience in the sports drinks space.

Some of the trends that emerged in 2020 could be here to stay. Ahead, we look at a few significant sports drinks market changes that experts predict could further unfold this year.

Hybrid Functional Drinks Grow

Sports drinks have been undergoing a transformation for the last several years, with more brands and SKUs incorporating functional ingredients in their formulations. Now, this functional drinks trend is seeing a further evolution in the form of hybrid functional drinks.

Holly McHugh, former marketing associate for beverage development company Imbibe (Niles, IL), explained in December how the new hybrid beverages are the next major trend in sports nutrition. “Hybrid sports drinks are designed to help active consumers fulfill performance and recovery goals by incorporating several functional ingredients into one beverage for multiple benefits,” McHugh said. “Energy drinks are a common platform for hybrid beverages. There are energy drinks on the market that are enhanced with ingredients like creatine, electrolytes, BCAA, and green coffee extract.”

McHugh said ingredients like BCAA and L-carnitine are being incorporated into muscle recovery drinks, while performance-enhancing drinks are combining ingredients like creatine and medium-chain triglycerides (MCT) oil with focus-boosting nootropics like lion’s mane mushroom extract and L-theanine. Furthermore, these drinks tend to have high protein content, incorporating proteins from plant-based sources such as pea and brown rice.

COVID-19 Increases Interest in Healthy Drinks

While sports drinks have been trending toward “better for you” claims for years, the COVID-19 pandemic accelerated this change. Floris Daamen, segment marketing manager, performance nutrition, for FrieslandCampina Ingredients (Amersfoort, The Netherlands), says the pandemic boosted consumer awareness around health and wellness in general and the link between nutrition and health specifically.

“With organized sports and gyms around the world unavailable for a significant portion of the year, more people are searching for ways to take their health into their own hands,” Daamen says. “This includes seeking additional health benefits from their usual eating and drinking habits.”

Daamen says consumers are making healthier choices out of concern for their overall health but are also looking for indulgent treats and snacks to support their mental well-being and to help them cope with the stress of the COVID-19 pandemic. This trend, he says, could be driving growth in sports drinks that have both a positive health claim and a satisfying taste.

Not only that, Daamen predicts, “I think sports drinks will soon start to explore other prevalent consumer issues. Research suggests that as many as 30% to 50% of athletes suffer from gastrointestinal problems, which may impair performance or recovery. Earlier this year we launched our new Biotis brand, which uses galacto-oligosaccharide prebiotics to support digestive health.”

E-Commerce Takes Over. Are Brands Prepared?

Traditionally, sports drinks sales tend to happen in-store. Now, however, more consumers are opting to buy online as the COVID-19 pandemic prompts them to avoid unnecessary trips to crowded public spaces. Jim Tonkin, founder and president of Healthy Brand Builders (Scottsdale, AZ), says more consumers are buying sports drinks online, which carries several implications for the industry.

“The entire online business is exploding right now,” he says. “COVID-19 has opened up new territory for brands. Instead of buying a pre-made product at a convenience store, consumers will buy a tub of powder online and add it to a shake in the morning. There have been a ton of out-of-stocks because the supply chain has been interrupted.”

Tonkin says this shift toward online sales is creating more overhead for brands and distributors. E-commerce platforms like Amazon typically prefer not to sell liquid, as its weight makes it expensive to ship. But with significant consumer activity shifting away from in-store sales, e-commerce is where the bulk of sales opportunities exist these days.

This movement requires other changes as well. “Traditional in-store marketing activities used to be front and center prior to COVID, but you can’t do demonstrations in stores now,” Tonkin says. “So enticing consumers to try your product is a lot more challenging. A lot of companies now are using social media to deliver their message.”

Market Fundamentals Remain Strong Despite Pandemic

While some analysts predicted earlier in 2020 that the sports drinks market would take a sales hit, market analysts agree that the sector’s fundamentals remain stronger than initially forecasted. An e-commerce boost appears to have mitigated some of the drop in brick-and-mortar sales, and interest in functional beverages has grown since the start of the pandemic. Even after 2020’s unprecedented challenges, the sports drinks market in 2021 will likely offer opportunities for brands that can innovate and pivot.