As buyers resolutely choose wellness as a personal priority, mindful consumption is driving a consumer path to premiumisation in food and beverages. Functional attributes aligned with this healthful trend are reaping the benefits and the newly invigorated better for you (BFY) carbonated beverage segment arguably owes its rise to the American fascination with gut health. This success, though, comes at a difficult time as rising food and drink prices have slowed volume growth across many categories and tested the elasticity of value attributes.
US SKU saturation is approaching fast, making newer successes a hard fight
Olipop and Poppi, initially positioned less glamorously as a digestive tonic and sparkling probiotic, respectively, have reshaped US soda through novel positioning and packaging. By distinctly embracing soda’s playful imagery and flavour profiles, their function as reduced sugar prebiotic beverages combined with fun branding and appealing flavours has differentiated each brand in a highly consolidated sparkling category. Giving further credence to the new competitive dynamic, the roll-outs of Coca-Cola’s Simply Pop and PepsiCo’s Soulboost soda in late 2024 seemingly accelerated this escalation, culminating in PepsiCo’s USD1.95 billion acquisition of Poppi in March 2025.
Of the 276 US carbonate launches since January 2021, 19% hold the claim of “prebiotic”, “probiotic”, or “digestive health”
Source: Euromonitor International
Given the market’s migration from organic growth to acquisition, there is the looming question of BFY soda’s longevity as a category. Retailers maintain their caution about shelf expansion, so newer brands may see dwindling opportunities for larger activations. If stores prove more bullish about functional beverages, this raises the risk of choice fatigue as well as cannibalisation. Further exacerbating this are potential category substitution pathways as the cost-of-living crisis persists. Reduced sugar carbonates or flavoured sparking water already coexist in the beverage aisle at a cheaper price, while fibre supplementation remains a mere DrinkTok hack away from those finding an affordable soluble supplement. It may seem a pessimistic outlook, but assessing the ceiling for category growth requires intentionality in understanding the competitive landscape in the context of consumer demand.
Prebiotic soft drinks in Latin America are an unmet opportunity
By comparing consumer attribute demand against what is on the shelf, it’s possible to see where the window of opportunity sits. Wellness-aligned product attributes, like protein or fibre, span the wider food, beverage, and consumer health product macrocosm, but narrowing the scope to a single aisle or category affords a more comparable lens to often-discrete purchasing decisions. Drilling into Euromonitor’s soft drinks product data and Voice of the Consumer: Health and Nutrition Survey, the US SKU-to-demand ratio is seemingly overindexed with prebiotic offerings compared with the global trendline.
Target Population, captured in the graph above, is assessed by scaling the percentage of respondents in our Voice of the Consumer survey data (ie “Which of the following factors or ingredients, if any, do you look for on food or drink labels?”) to the relevant demographic populace (ie “Country”). While the US SKU-to-demand ratio for prebiotic soft drinks appears massively overindexed, a different narrative exists in Mexico and Brazil. Global expansion for successful US brands like Poppi or Olipop is a possibility, but not without a deeper understanding of the branding, packaging trends and other local nuances of the BFY consumer in target geographies. Assessing the reasons why local brands have prospered may outline potential investment strategies for entering the market with a new brand or whether acquisition is the safer endeavour.
BFY brand successes possible with scope expansion
Sugar and artificial sweetener reduction is still top-of-mind for US consumers and ubiquitously reflected on shelves across retailers. Yet differentiation is possible within the less prominent probiotic (rather than prebiotic) carbonates space, especially if shelf stability is embraced, as in the case of the burgeoning Culture Pop brand. Where there is a strategic opportunity is in the ingredient-agnostic realm of need states like reset, maintenance, or optimisation we’ve introduced in our report here. Stopping short of an outright health claim, leaning into branding and marketing signifiers that align with these more nebulous demands while delivering on flavour, product, and formulation is an available opportunity.
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