Beverage brands are cashing in on the growing demand for functional drinks among younger, health-conscious consumers by introducing increasingly innovative offerings, including protein-boosted coffees and CBD-infused sodas. The $160 billion global functional drinks market has become an increasingly lucrative category, encompassing multipurpose drinks that claim to promise taste and enjoyment alongside wellness benefits, as consumers look for convenient ways to meet their health targets. "Functional beverages are beverages that are going to provide an outcome," Sally Lyons Wyatt, global executive vice president and chief advisor of consumer goods and food services at consumer insights firm Circana, told CNBC. "Convenience is definitely one factor, but it is also this quest to live longer, healthier...do you want to drink a beverage that's just there, or do you want the beverage to work harder for you?" Around 75% of millennials and 80% of Gen Zers consume functional beverages ranging from energy drinks, probiotic drinks, and vitamin-enhanced drinks, according to EY's most recent consumer beverage survey of over 2,500 adults in the U.S. and Brazil. Over half of respondents said they're willing to pay more for drinks that support their health and wellness goals, EY found. Additionally, Circana's 2026 beverage evolution report showed that nearly 64% of consumers sometimes choose to have a drink as a snack, and this jumped to 70% for 25-to-34-year-olds, signaling increased appetite for drinks as meal replacements. Starbucks introduced protein coffees sold in its stores across the U.S., Canada, and Europe in the past year to capitalize on the frenzy for multipurpose wellness drinks an expansion of its ready-to-drink protein coffees in supermarkets launched in 2024. "Functional beverages are really prevalent now in all kinds of categories across food and beverage, and protein is probably the frontrunner of those," Starbucks' EMEA Group Manager of Beverage Development Sam Henderson told CNBC. "We're selling [almost] as much protein cold foam as we do flat whites, and as you can imagine, flat whites are a phenomenally popular beverage, and protein is performing the same at the moment," he said. The broader industry is also looking to tap into the market, with French food and beverage corporation Danone recently acquiring the Steven Bartlett-backed protein drinks maker Huel as part of a reportedly $1.15 billion deal. Huel offers nutritionally complete protein shakes as meal replacements. Meanwhile, soda giants PepsiCo and Coca-Cola also hopped onto the trend. Coca-Cola launched its prebiotic soda brand Simply Pop early last year in the U.S., while Pepsi acquired a prebiotic soda startup Poppi in a $2 billion deal. "I think our consumers all consumers are looking for products that give them functional benefits more than ever before. I think people are educated more than they ever have been on nutrition and what they're putting into their bodies," Henderson said. As coffee chains, soda brands, and startups vie for a slice of the functional beverage market, many are charging a premium compared with traditional products. Starbucks' in-store protein coffee prices range from around $5.75 to $6.75, while its protein-boosted milk...
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