Natural energy drinks on the rise

Gen Zers and millennials want food that’s healthy, fresh and natural. And the same holds true for their beverages.

Health descriptors such as “fresh,” “clean,” “authentic” and “natural” drive their purchases, and, in many cases, encourage them to spend more money on an item, according to Technomic’s 2016 Generational Consumer Trend Report.

Energy drinks that provide pep without caffeine, added sugars or artificial ingredients would win with this on-the-go demographic.

Behind soft drinks—and alcohol beverages for millennials—these groups most prefer lemonade, bottled water and iced tea. Younger millennials versus older are more likely to opt for fruit juice, according to Technomic research, though this number remains relatively low as many younger consumers seek out drinks with less sugar.

Compared to two years ago, 30% more of the Top 500 full-service restaurants are offering beverages without sugar, and 4% more feature drinks with natural callouts, Technomic found. Drinks sweetened with natural ingredients like agave nectar or stevia signal healthfulness.

Younger consumers are also open to novel and international flavors in their functional beverages.

Green tea, for example, is up 10.4% as a non-alcohol beverage at colleges and universities year-over-year, according to Technomic MenuMonitor data. Green tea, which has a minimal amount of caffeine, is well-suited to applications such as energy drinks, providing both a health halo and a natural energy source. Matcha, powdered green tea that is prized for being rich in antioxidants, is up 18.4% on non-alcohol beverage menus in the last year.

Also trending is ginseng. The caffeine-free root is believed to boost mental alertness and is a featured ingredient in a variety of energy drinks and teas. Menu callouts of ginseng in non-alcoholic beverages are up 4% percent year-over-year, according to Technomic data.

Similarly, menu mentions of coconut water in non-alcohol beverages are up 23.6% year-over-year, according to Technomic data. Many believe it to be a natural energy booster because it is high in potassium and electrolytes. It’s a popular grab-and-go beverage among young consumers.

Gen Z and millennial consumers are also flocking to kombucha, which has risen 28% in menu callouts over the last two years. The slightly effervescent, fermented drinks are trending as younger buyers seek out better-for-you beverages with “real” ingredients and natural sweeteners. 

These better-for-you energy drinks represent a huge area of opportunity for foodservice operations. Young consumers are becoming increasingly familiar with these functional ingredients, while at the same time shying away from beverages in which caffeine and sugar dominate.