Functional beverages are experiencing explosive growth, capturing the attention of
health-conscious consumers, retailers, and investors alike. "What's Driving Functional
Beverages," highlights a key trend: a shift towards beverages that offer functionality
alongside refreshment. “The sky is the limit” says Debby Garbato from Progressive
Grocer.

The Functional Beverage Boom

The functional beverage category has seen remarkable growth, racking up $1.2 billion
in grocery sales alone (Alix Partners). This growth is driven by consumers' increasing
desire for beverages that offer more than just refreshment. From energy and hydration
to gut health and stress relief, functional beverages are redefining what we drink and
why we drink it.

Jennifer Saenz, EVP and Chief Merchandising Officer at Albertsons Cos.,
highlights the trend:
“For a few years, shoppers have been looking for beverages that do more than quench
thirst. This desire for more than just refreshment accelerated during the pandemic,
creating a surge in new attributes, functional ingredients, vendors, and brands.”

Why this trend is exciting.

This segment is brimming with innovation, with new ingredients and benefits constantly
emerging, which is driving a rapidly growing market and loyal customer base.

 More than just hydration: Gone are the days of sugary drinks offering nothing
but a fleeting burst of energy. Functional beverages cater to a variety of needs,
from gut health and relaxation to sustained energy and essential vitamins.

 Clean ingredients: Today's functional beverages are formulated with health in
mind. Look for organic, low sugar, and artificial ingredient-free options like
Recoup!

 On-trend flavors: Functionality doesn't have to compromise taste. Functional
beverages come in a delicious array of flavors, making it easy to find one you
enjoy.

Who is it for?

Functional beverages cater to a broad range of consumers, from fitness enthusiasts to
those seeking healthier lifestyle choices. According to Ryan White, program category
manager at New Seasons Market, “the appeal of functional beverages lies in their ability. to offer both benefits and experiences”. This is precisely what Recoup delivers with its refreshing ginger-based formula that supports gut health and tastes great.

Growth and Potential

The functional beverage category is not just growing; it’s diversifying. With products like kombucha making significant inroads and new entries continually innovating, the
potential for growth is immense. Kombucha alone, the largest segment within functional beverages, boasts $469 million in sales in grocery alone (Alix Partners), underscoring the robust demand for gut health-focused drinks. Launched in 2018, Olipop, a “new brand of soda”, is positioned to hit $500 million in sales this year.

Why Retailers and Investors Should Pay Attention

For retailers, functional beverages present an opportunity to drive higher sales
compared to traditional soft drinks. Benjamin Witte, founder/CEO of Recess, notes the
higher price tags and value these beverages bring:
“They’re extremely valuable to retailers compared to a bottle of water.”

Investors should be excited about the continuous innovation and consumer interest in
this category. The Albertsons Cos. Innovation Launchpad competition, for instance,
underscores the importance of new, emerging brands in driving the market forward.
Recoup, with its unique value proposition and first in beverage ROC certification, is well-
positioned to capitalize on these trends and capture the attention of health-conscious
and sustainability-focused consumers.

The Future is Functional

The future of functional beverages is bright and full of possibilities. As consumers
continue to prioritize health and wellness, the demand for innovative, benefit-packed
drinks like Recoup will only grow. Our commitment to quality, health, and sustainability
ensures that we are not just part of the trend but leading the way.

Recoup is not just a beverage; it’s a lifestyle choice for those who value health,
authenticity, and sustainability. Join us on this journey towards better health and
wellness, one refreshing sip at a time.