The functional beverage market is experiencing unprecedented expansion, with U.S. sales surging 54% to $9.2 billion between March 2020 and March 2024 (NielsenIQ). This growth is particularly evident in energy-focused products, notably, they have emerged as a leading category in the functional drink space.

Consumer Demand Driving Market Innovation

Health-conscious consumers are increasingly seeking beverages that deliver more than just refreshment; consequently, the market for functional drinks is expanding. Today’s shoppers expect their drinks to provide measurable health benefits alongside great taste. Energy drinks specifically have become a dominant force in the functional market, with consumers looking for immediate energy boosts from ingredients like caffeine, taurine, and electrolytes (Beverage Marketing Corporation).

“The high volume of projects in our lab centered on hydration, energy, protein, and coffee reflects the current consumer trend: energy and other functional benefits are driving market interest and innovation,” reports Jason Dompeling, Senior Manager, Product Development at Imbibe.

The Taste Challenge

Interest in the product is growing; nevertheless, taste remains a critical factor for success. Studies show 55% of U.S. functional drink consumers prioritize flavor over functional benefits (Mintel). This presents a significant challenge for energy beverages, where bitter functional ingredients like caffeine—especially at higher concentrations—can compromise taste enjoyment.

The Energy Market Evolution

In 2025, demographic shifts will further accelerate growth; specifically, this is due to Gen Z and millennials—the most engaged functional product users—comprising 41% of the population (Lightspeed/Mintel). The energy drink sector is evolving to meet these new consumer expectations through clean label strategies, personalized nutrition, and exciting flavor innovations.

Recent innovations like STōK Cold Brew Energy exemplify this trend, combining coffee with focus-boosting caffeine, B-vitamins, ginseng, and guarana. Such products reflect the industry’s response to consumers seeking beverages that deliver both functional benefits and enjoyable taste experiences.

Bitter maskers, like NonSense BP-1, are essential tools for functional beverage growth.

Learn more about NonSense® and how it can elevate your beverage formulations.

Request a sample of NonSense® BP-1 or leverage our development capabilities to gain access to our expert taste modulation team by emailing marketing@imbibeinc.com.