One of the fastest growing drink categories that campus dining operators should be keeping an eye on? Functional beverages. Sales are up 54% in the U.S. between 2020 and 2024, reaching $9.2 billion last year—now accounting for roughly 10% of the non-alcoholic beverage market.
The category’s not just full of vibrantly-colored, sugar-loaded sports drinks anymore, either. Now, there’s full-spectrum electrolyte waters, focus blends, gut-health sodas, vitamin-enhanced concoctions, and “better-for-you” options. And this category is becoming the default beverage landscape your students look for before ever setting foot on campus or in your dining hall.
More than half of Gen Z sees functional beverages as a viable alternative to traditional soft drinks and alcohol, two stalwart categories for previous generations of consumers that have been going through a significant contraction in interest.
- According to a 2023 report from the Centers for Disease Control and Prevention (CDC), 31% of high school students reported avoiding soda consumption, an increase from 22% in 2013.
- At the same time, according to this sentiment survey from Circana, 49% of all Americans are trying to drink less alcohol in 2025, up 40% from previous sampling the firm conducted in 2023.
Meanwhile, new data from Ocado and Savanta reveals that 61% of Gen Z purchase functional drinks several times a month. How exactly do you define a functional beverage, though?
Inside the functional beverage market: behind the explosive growth, common sense
The functional beverage category is made up of drinks that do more than hydrate.
Think electrolyte waters that support recovery, better-for-you sodas with prebiotics for gut health, nootropic blends that help you focus, or liquid adaptogens that improve mood or deepen sleep. If a beverage promises a specific wellness benefit beyond basic hydration, it lives in the functional drinks market.
In just a few years, those products have carved out a meaningful slice of the U.S. beverage landscape. Functional beverages now account for roughly a tenth of total non-alcoholic beverage sales, and the functional beverage market size has grown more than 50% since 2020.
That functional beverage market growth is outpacing traditional sodas and juices, which are under pressure from sugar concerns and shifting consumer sentiment.
Functional beverage sales are up 54% this decade.
Keep up with this changing trend with a Bevi machine
The demand story starts with Gen Z and Millennials, the generations making up most of your undergraduate and graduate students, respectively. Both groups are moving away from high-sugar drinks and toward wellness options. They choose products that support energy, focus, immunity, gut health, and mental well-being as part of their daily routine, not just when they’re sick or tired. Young people today not only read but understand the ingredient label. Artificial sweeteners are avoided. Brands with transparent marketing or ingredient stories are cherished and championed.
For campus dining, this means students are arriving on campus wanting—or, at least, subconsciously hoping and willing—to be delighted by functional beverage options. Without those options, they may skip the drink section altogether when coming through the hall for food. Or they may skip the dining hall altogether, as 90% of college students do at least once a week to dine off campus.
What Gen Z wants from functional drinks in 2025
Functional drinks are trending with students today because they’re seen as a utility, something that helps them to inexpensively and effectively solve daily problems. Stay sharp in class with cognitive enhancements, such as L-theanine, manage stress with supplements for their nervous system, such as magnesium. Have the energy to exercise communally as part of an intramural team or solo with a bit of ginseng or chaga, but not the headaches and over-stimulation from high levels of caffeine found in coffee.
Today’s students grew up with LaCroix, electrolyte waters, and enhanced beverages as mainstream options. When they walk into a dining hall and mostly see traditional sodas and basic bottled water, the experience feels dated. Almost 73% of Gen Z will avoid high-sugar by default, gravitating toward low- and zero-sugar options with natural flavors if they still crave a sweet treat.
Looking forward, the functional beverage market growth isn’t slowing down. Projections show the category continuing to outpace traditional sodas and juices through 2025 and beyond, as Gen Z’s preferences solidify around functional, low-sugar, customizable options. For campus dining, that means the functional drinks market isn’t a passing fad; it’s the baseline your next incoming class will expect.
Case study: USC brings functional beverages to campus
Why campus beverage programs are falling behind student expectations
Across higher ed, campus dining trends are shifting from “just feed them” to “keep them excited enough to stay.” Beverage innovation can play a big role in student satisfaction with dining options on campus.
Get clear on where you are today
Audit your current lineup: which functional options do you already offer, and where are the obvious gaps between student preferences and the choices on tap? Look at comment cards, social listening, RAs, and student government: what are they actually saying about beverages?
Implementation doesn’t have to be all-or-nothing
Follow a USC-style playbook: start in one or two high-traffic dining halls, then scale based on data. Track overall consumption habits, flavor and enhancement choices, time-of-day usage spikes. Pair that with quick pulse surveys or QR-code feedback, and let student demand tell you where to expand next.
Always tie beverage changes back to institutional goals
The right platform should support campus wellness initiatives, reduce packaging waste, boost student satisfaction scores, and help differentiate your school from peers. That’s where campus dining innovation stops being “one more project” and starts clearly contributing to retention and reputation.
Don’t forget to communicate
Help students understand what’s new, highlight clean ingredients and low-sugar formulations, connect offerings to wellness programming, and share the sustainability impact of refillable models. When students aren’t confused about why something is happening, they’re much more likely to embrace the change.
The future of campus beverages and how to stay ahead
Students want functional options that complement your existing program. They want low-sugar alternatives alongside legacy favorites, customizable stations that enable autonomy, and sustainable formats that support institutional goals.
The mandate for dining directors is tricky: modernize without blowing up existing partnerships or overcomplicating operations.
The ideal solutions complement your current beverage program instead of replacing it, slot into existing pour-rights frameworks, and don’t require extra labor to manage. They should also be cost-effective, support campus wellness and sustainability commitments, and help differentiate your institution from peers competing for the same students and families. Get beverages right, and you’re not just following a trend. You’re significantly boosting student satisfaction.
Want to keep reading? Here’s the latest on Bevi’s blog.
- What the fervor for functional beverages means for campus dining
- A very spooky Bevi machine: 2025 Halloween flavor icons
- L-theanine 101: The sneaky popular nootropic in your drink
- How to stay focused at work (even with distractions)
- Magnesium 101: Supplement for sleep, stress, and focus
- Stevia 101: Is stevia bad for you?
- Vitamin B12: How it works & why it helps
- Focus Blend: Calm, lasting focus without high caffeine
Hillary Lyons
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