Health-conscious consumers: Navigating the impact on the beverage market

Today’s consumers are not just drinking to quench thirst—they’re drinking with intent. Wellness is becoming a daily, deliberate choice: 56% of respondents report checking nutritional labels regularly, and nearly half have actively reduced their sugar intake over the past year. Key motivators include concerns about chronic conditions such as diabetes and obesity (62%), a growing focus on mental and physical well-being, and a desire for beverages that support energy, relaxation, and sleep.
 

This demand has fueled impressive growth across functional beverage categories. Vitamin-enriched waters are up 24% year-over-year, while kombucha and other fermented drinks have increased by 18%. CBD-infused and calming beverages—particularly popular in wellness-forward cities like Byron Bay and Melbourne—have surged 31%. Protein drinks and plant-based milks are up 20%, largely driven by gym-goers and those following plant-based diets.
 

Generational differences are shaping this evolution further. Gen Z leads as the most experimental cohort, embracing new formats and flavors with enthusiasm. Millennials, by contrast, are consistent purchasers—48% buy functional beverages at least twice per week. Gen X consumers are more cautious but are showing increasing interest in immune-boosting and metabolism-supporting drinks. Baby Boomers, meanwhile, tend to favor options recommended by health professionals and remain more price-sensitive.
 

“Consumers don’t just want hydration anymore—they want results,” said Tori Dean, Senior Consumer Health Analyst at Aden Advisory.

The shift away from traditional soft drinks continues to gain momentum. Forty-one percent of Australians now actively avoid sugary beverages, and one in three has eliminated carbonated soft drinks from their weekly routines. More than half (55%) say they would switch to a healthier brand if offered at a similar price—prompting major retailers to expand shelf space for low-calorie and sugar-free alternatives. Meanwhile, local cafes and bars are adapting menus with herbal blends and mood-enhancing mocktails.
 

Transparency around ingredients is becoming a decisive factor in purchase decisions. Sixty-nine percent of consumers want beverages with clear, specific functional claims. At the same time, 44% say they distrust overly scientific or ambiguous ingredient names, preferring plain language that clearly communicates benefits. Educational marketing is now an essential tool—58% of shoppers are more likely to purchase from brands that teach them about health impacts.
 

Packaging and sustainability also influence purchase behavior. Over half of consumers prefer beverages in recyclable or reusable containers, and 36% look for carbon-neutral certifications. In urban markets, minimalist and natural packaging designs are outperforming traditional branding—suggesting that form must align with function and ethics.
 

For beverage brands, the implications are clear:

• Function is the New Flavor: Health benefits are now central to the purchasing decision.

• Simplify the Science: Use accessible language to explain benefits and avoid technical jargon.

• Niche is Going Mainstream: Ingredients like ashwagandha and spirulina are gaining broad appeal.

• Education is a Differentiator: Use packaging, blogs, and video content to inform, not just sell.

• Wellness and Sustainability Must Go Hand-in-Hand: Ethical sourcing and clean packaging are non-negotiables for many consumers.
   

Channel dynamics are also shifting. Online-first brands are seeing rapid uptake due to precision-targeted messaging. Gyms, yoga studios, and wellness hubs are emerging as retail hotspots. Direct-to-consumer beverage subscriptions have grown 27%, particularly in metro areas where health-conscious lifestyles dominate.
 

Looking ahead, innovation will continue to reshape the category. Expect the rise of beverage tech—smart bottles, wellness-tracking apps—and personalized formulations based on lifestyle or biometric data. The boundary between beverage, supplement, and medicine is starting to dissolve, and consumers are ready for the convergence.
 

Key Takeaways from the 2025 Beverage Industry Outlook:

• 56% of Australians read nutritional labels before purchasing drinks

• Functional beverage consumption is growing at 22% YoY

• Gen Z leads first-time adoption of wellness-oriented drinks

• Low-sugar and health-enhancing beverages are reshaping both shelves and menus
   

As consumers raise the bar on what they expect from their drinks, the brands that deliver on health, transparency, and purpose will be the ones that thrive.