MCA explores the trend of caffeinated functional drinks as Bubbleology and Kaspa’s experiment with new Red Bull infusions, while US chains such as Starbucks and McDonalds gear up to enter into the space with new product innovation
Restaurants and food-to-go brands are cashing in on the growing energy drink market, with a flurry of new menu innovation.
Demand for caffeinated and functional beverages has been sustained by a consumer need to be productive, despite the impact of inflation on consumer spending.
In fact, data from NielsenIQ suggests consumers are willing to pay more than double the average price of a normal soft drink for a functional one.
Leading retail brands like Red Bull and Monster already enjoy consistently strong revenues globally, whilst Mintel research shows that the number of energy drinks in the market worldwide has increased by 20.8% since 2021.
More widely, some functional beverages are designed to provide specific health benefits, often incorporating ingredients like vitamins, minerals, caffeine, and other substances that promise benefits such as improved mental focus, enhanced physical performance, or overall well-being.
Although the start of this trend can be traced back to the late 1980s, when Red Bull first entered the market inspired by the functional drinks of East Asia, the demand for the category has been expanding rapidly, driven by health-conscious consumers and growing product innovation.
According to Britvic’s 2024 Foodservice Soft Drinks Review, UK sales of soft drinks through out-of-home outlets, supermarkets, and convenience stores grew by 6.5% to over £20.3 billion in 2024.
Notably, the stimulant drinks sector, which includes energy drinks, saw 18% growth, while sports drinks experienced a staggering 72.6% increase.
Restaurant and food-to-go chains are beginning to capitalise on this growing popularity, with some creating their own infusions, or making room for popular brands on their menus.
Coffee giant Starbucks is preparing to launch its own line of energy drinks, as CEO Laxman Narasimhan announced in a recent earnings call that the company would introduce a “zero-to-low calorie handcrafted energy beverage”, building on its coffee heritage.
Rumoured flavours include Tropical Citrus, Melon Burst, and Frozen Tropical Citrus, positioning Starbucks to capture a share of the energy drink market and lean into growing health-conscious consumerism.
In the UK, a new partnership between bubble tea brand Bubbleology and Red Bull will create what is said to be the country’s first energising bubble tea; the Red Bull Watermelon Boba Infusion.
The limited-edition drink features crystal pearls and strawberry popping boba, infused with watermelon and jasmine, and served with Red Bull RED Edition Watermelon to create an ombre effect.
Mintel notes that while the emergence of such hybrid beverages could have at first posed a challenge for the energy drinks market, the growth of this category has served as an ”accessible entry point” for certain demographics that the industry had previously failed to attract, in particular younger women.
At the same time, Kaspa’s Desserts has announced a collaboration with the drinks brand to introduce Red Bull Infusions to its menu. Mixed with flavoured syrups and served over ice, drinks come in flavours including the classic Red Bull, Red Bull Watermelon Edition, and Red Bull Summer Edition.
Francesco Arcadio, managing director of Kaspa’s Desserts said the partnership allows the brand to enhance its dessert dining experience, whilst targeting a Gen Z consumer.
A significant portion of growth in soft drinks has been driven by consumers looking to reduce their alcohol intake, with 46% of drinkers currently trying to consume less alcohol, according to Britvic.
Lumina Intelligence also records an increase in consumers who identify as non-drinkers, growing from 13.6% to 14.8% in the market year-on-year, with young people driving this trend.
Meanmwhile, drinks offering health benefits including claims of boosted immunity, improved cognitive functioning and enhanced gut health are also gaining traction, and operators sich as Wasabi and Chipotle have added popular functional drink brands including natural immunity drink brand, Humble Warrior, and CBD infused, Trip to menus.
The US is even further ahead, where the functional beverage market is experiencing remarkable growth. According to NielsenIQ, US sales of functional beverages surged 54% to $9.2 billion (£7.25 billion) between March 2020 and March 2024.
Coffee and donut brand Dunkin’ jumped on the bandwagon earlier this year with its SPARKD’ energy drink line, made with vitamins & minerals, caffeine and guarana in flavours like Peach Sunshine and Berry Burst.
Whilst Sonic, the drive-in fast-food chain, first introduced a Red Bull Slush in 2019, and sandwich brand Jersey Mike’s began selling Celsius energy drinks last year.
A less successful story - Panera, owned by Pret A Manger’s parent company, JAB Holdings, introduced Charged Lemonade in 2022, which was said to contain upwards of 178mg of caffeine.
However, the beverage was later dropped after a series of major court cases following the deaths of two people who died after drinking a Charged Lemonade drink. The brand later revealed a new menu transformation, with a focus on “low-sugar and low-caffeine options.”
Health and wellness is set to become a larger component of the energy market in future years, meaning that additional benefits such as hydration or natural ingredients may become more sought after than high caffeine content.
Notably, “better-for-you” options have seen the biggest increase in consumption between January 2023 and 2024 in the US, according to Mintel data.
Customisation could also be key. McDonald’s is exploring the space with new spin-off take-away restaurant, CosMc, which will make its drinks customisable with energy shots and other health focused add-ins such as vitamins, or pre-workout.
The fast-food chain is filling a demand for an afternoon pick-me up with a range of blended beverages such as Sour Cherry Energy Burst, Tropical Spiceade, Blueberry Ginger Boost, alongside specialty lemonades, teas, and cold coffees.
The first of ten US outposts are set to be opened before the end of next year, however, it is remains to be seen whether the brand sees potential for it to cross over to the UK.
