Functional/wellness beverages will drive the beverage industry over the next five years, Nik Modi, managing director of Toronto-based RBC Capital Markets, said last week at CSP’s Cold Vault Forum in Lombard, Illinois.
“I promise you, it’s coming,” Modi said during his presentation. “And I’m so confident this is going to happen because we’re all aging, and we want to live longer and we want to live more productive lives.”
Modi talked about a number of trending beverages, such as Tansan, a Japanese drink promoted as an alternative to Ozempic. When it reacts with stomach acids, Tansan turns into a jellylike substance designed to reduce hunger, he said.
There’s also Yakult, which Modi said “is now completely part of Korean culture, established in 1969. It is a small milk-based drink that promotes a balanced and healthy gut. It has a very sweet, milky taste and was made especially for kids and adults.”
In the United Kingdom, Viva Drinks offers stress relief, immunity boost, detox and energy. Meanwhile, Zobo is a hibiscus-infused energy drink in Africa, he said.
Questioning the audience, Modi said Japan is the oldest population in the world—and its number-one channel is teas.
“You with me?” Modi asked the audience. “You get it?”
He continued. “The older we get, the more we prioritize time over everything else. Convenience is where the future is because we're aging. Wellness is where the future is because we’re aging. These are structural dynamics. This isn’t some, ‘Oh, this trend is hot, this trend is not.’"
The offerings that are “really going to grow over the next five to 10 years will be oriented around wellness and functionality for that reason,” he said. “We’re living longer, and we’re living longer with disability because we have the science and products to deal with ailments.”
Consumers cite food and beverage and exercise as the top contributors for well-being, and food and beverage choices supersede exercise when it comes to wellness, Modi said.
“Think about that for a second,” he said.
In discussing traditional beverages driving modern trends, Modi showed the global influence on the drink industry:
Matcha, a powdered green tea integral to Japanese tea ceremonies, has expanded its presence globally. It’s known for its antioxidant-rich position and provides benefits such as metabolism support, mood enhancement and calm alertness due to caffeine and L-Theanine. It has evolved from traditional uses into products like lattes, smoothies, desserts and skincare items.
Kombucha, a tangy, fermented tea from northeast China, is now a prominent health beverage. Its probiotic properties have made it popular for promoting gut health, digestion and immune support. Once niche, it has become widely available across different channels, inspiring innovations such as kombucha cocktails, skincare products and home-brewing kits.
Yerba mate, from South America, is a caffeinated herbal beverage gaining recognition beyond its traditional consumption. It’s often positioned as a coffee alternative and provides sustained energy and is rich in antioxidants. Modern formats, such as ready-to-drink teas and flavored beverages, are helping yerba mate appeal to broader, health-conscious audiences globally.
Turmeric, a staple in Indian cuisine and medicine, has achieved global prominence through turmeric lattes. Containing curcumin, which offers anti-inflammatory and immune-boosting properties, turmeric lattes have gained popularity for their perceived health benefits. The lattes are commonly made with plant-based milk and spices.
Hibiscus tea, a tart, herbal beverage enjoyed in regions like Mexico, Egypt and West Africa, is gaining popularity in the wellness market. It is known for its antioxidants and potential to lower blood pressure and cholesterol. Hibiscus is expanding into other categories, such as craft sodas, cocktails and culinary applications, appealing to health-focused consumers.
Modi said there are many health concerns today, including getting enough quality sleep, managing stress and work-life balance.
The stress hormone cortisol has gone up 30% in the last three decades in the U.S. in the average person, he said. “We're more stressed,” he said.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.