Beverage Startups Fuel Growth with Protein and Wellness Trends

Emerging beverage startups are redefining the market by focusing on health, protein, and energy, appealing to modern consumers’ desire for nutritious and functional drinks. According to an analysis of data from Crunchbase, many recently funded companies are successfully aligning their products with these trends, steering clear of sugar and emphasizing wellness benefits.

One prominent trend is the surge in protein-based drinks. Startups and established brands are racing to incorporate more protein into various beverages, from sodas to lattes and flavored waters. For instance, the Dutch startup Vivici secured a notable $37 million in a Series A funding round in February 2023, focusing on dairy proteins produced through precision fermentation. Their whey protein is versatile, used in clear drinks, powder mixes, and snack bars.

Another contender, Slate Milk, specializes in high-protein milkshakes and iced coffees, recently raising $23 million in a Series B funding round. Notably, more than 75% of the calories in its beverages come from protein. For those preferring fizzy options, Los Angeles-based Don’t Quit offers canned sodas infused with 15 grams of whey protein.

Energy Drinks on the Rise

The demand for energy-boosting beverages also remains strong, with several startups gaining traction in this category. Gorgie markets a sparkling pink lemonade containing more caffeine than a typical cup of coffee, while Lucky Energy offers a range of fruity drinks with higher caffeine levels.

Additionally, companies like Jot and Atomo Coffee are blending multiple beverage trends, with Jot selling a protein latte and Atomo Coffee incorporating added nutrients into its products. The integration of caffeine into traditionally non-caffeinated drinks reflects a growing consumer interest in enhanced energy levels.

Investors Flock to Wellness Innovations

Wellness-focused drinks are particularly attracting investment, as seen with startups like Hiyo, which specializes in fizzy tonics made with mood-boosting plant ingredients. Earlier this year, Hiyo secured a minority investment from the venture arm of Constellation Brands, indicating strong investor confidence in the category. Similarly, Magic Mind, based in Venice, California, is expanding its line of drinkable shots designed to improve mental performance.

The market’s evolution is influenced by changing consumer preferences, with many willing to pay a premium for beverages that go beyond basic hydration. According to a recent report by Ernst & Young, consumers are increasingly exploring options that deviate from traditional offerings, raising questions about how many products the market can sustain.

As startups innovate to meet consumer demands for low-sugar or sugar-free drinks, the competition intensifies. Many of the funded startups this year have prioritized these attributes, with some pushing the boundaries of what a beverage can deliver in terms of sweetness and nutritional value.

Looking ahead, the challenge will be finding the right balance between taste and nutrition. As brands continue to improve the nutritional profiles of their offerings, the next step will involve determining which products resonate with consumers. The beverage industry is witnessing a transformative moment, and the emphasis on health and wellness is likely to shape its future trajectory.