The functional drinks sector is entering a new phase as drinking habits and expectations around beverages change. Australian innovation is contributing to this shift.
Younger Australians are drinking less alcohol than previous generations, while low- and no-alcohol lifestyles are changing drinking habits. Consumers are also moving towards drinks with less sugar, fewer ingredients and additives, and more naturally occurring compounds.
The shift is contributing to what some industry observers call 4th Gen Drinks. While not an official classification, the term describes a move beyond adding electrolytes, caffeine, vitamins, protein or probiotics to existing beverages towards using naturally occurring compounds and ingredients from food and food-production streams.
“The next generation of functional drinks won’t be built by adding more to the formula,” said Chris Plazzer, founder of Olive Mill Water. “It’ll be built by discovering what’s already there; in ingredients the industry has spent decades overlooking, or throwing away entirely.”
The trend is developing within a global market worth hundreds of billions of dollars, while the Australian market generates more than $2 billion a year.
Olive Mill Water is an Australian-developed functional drink made from liquid released during olive oil production. “Olives have been prized for their oil for thousands of years. We just asked a different question: What else does the olive have to give?,” Plazzer said.
For centuries, the liquid was treated as a by-product of olive oil production despite containing polyphenols, including hydroxytyrosol. Olive Mill Water has developed a drink from the liquid without added sugar, caffeine, flavourings or artificial sweeteners.
Olive-derived phenolic compounds are being studied in areas including gut microbiology, cardiovascular biology and metabolism. While much of the research remains at the pre-clinical stage, it is contributing to interest in their use in food and beverage products.
For Australian businesses, 4th Gen Drinks could create opportunities to develop products from food resources and by-products for the global functional drinks market.
“Australia already has an incredible reputation for food innovation,” Plazzer said. “4th Gen Drinks could be the next category where Australian companies set the pace instead of catching up to it.”
- Further reading: Waterdrop introduces functional hydration cubes at 7-Eleven.
