Beverage Startups Innovate with Protein, Caffeine, and Wellness

Emerging beverage startups are reshaping the market with drinks that combine protein, caffeine, and wellness-focused ingredients. According to an analysis of Crunchbase data, new companies in this sector are increasingly catering to health-conscious consumers. These consumers are willing to invest in products that promise both nutritional benefits and an energy boost, steering clear of added sugars.

The trend is evident in a selection of 26 innovative beverage startups that have received funding this year. Notable examples include protein-enriched sodas, botanical tonics, and sugar-free energy drinks. This article examines where investment is flowing by exploring some key themes.

Protein-Packed Innovations

Protein has emerged as a dominant trend in the beverage industry. Startups and established brands alike are racing to incorporate more protein into drinks, from sodas to lattes and flavored waters. For instance, Dutch startup Vivici, which specializes in dairy proteins produced via precision fermentation, raised $37 million in a February Series A funding round. Their whey protein has applications in clear drinks, powdered mixes, and snack bars.

Similarly, Slate Milk offers high-protein milkshakes and iced coffees, having secured $23 million in Series B funding in September. Notably, over three-fourths of the calories in its products derive from protein. For those seeking a fizzy alternative, Don’t Quit from Los Angeles provides canned sodas containing 15 grams of whey protein.

Energy and Wellness Drinks

The demand for energy-boosting beverages is also on the rise. Startups are increasingly introducing caffeine into drinks that traditionally lack it. For example, Gorgie markets a sparkling pink lemonade that contains more caffeine than many cups of coffee. Likewise, Lucky Energy offers a range of fruity drinks with elevated caffeine levels.

Some companies are blending multiple beverage categories. Jot, known for concentrated coffee, has introduced a protein latte, while Atomo Coffee develops products infused with additional nutritional benefits.

Investors are particularly interested in wellness drinks aimed at health enthusiasts. Hiyo, a creator of fizzy tonics with plant-based ingredients that may enhance mood, has attracted significant attention. Earlier this year, it sold a minority stake to the venture arm of Constellation Brands. Another player, Magic Mind, based in Venice, California, is expanding its range of drinkable shots designed to improve mental performance.

Consumer preferences are shifting away from tap water, with many willing to pay for diverse beverage options. Yet, the market is becoming increasingly crowded. Research and accounting firm Ernst & Young highlighted this trend in a recent report, noting that the critical question is how many options consumers can realistically navigate.

The report indicates that certain categories, particularly wellness drinks, are well-positioned to thrive. There is also a noticeable rise in sugar-free or low-sugar beverages, with many funded startups adhering to these principles. It is worth noting that both startups and established brands are exploring ways to offer drinks that are both sweet and protein-rich, challenging traditional notions of beverage nutrition.

As brands continue to innovate, the critical next step will be determining which products consumers find appealing in terms of taste and overall quality. The beverage industry appears poised for significant evolution as it adapts to the demands of modern consumers, eager for functional and enjoyable drinks.