Four In Five Gen Z Consumers Drink Functional Beverages. Walmart Already Built Their Aisle.

Around 75% of millennials and 80% of Gen Z adults consume functional beverages, spanning energy drinks, probiotic sodas, and vitamin-enhanced waters, according to EY’s most recent consumer beverage survey of more than 2,500 adults in the U.S. and Brazil, reported by CNBC. More than half of respondents said they are willing to pay more for drinks that support their health and wellness goals.

The category those consumers are funding is now worth roughly $160 billion globally. Circana’s 2026 beverage evolution report adds a second signal: nearly 64% of consumers sometimes choose a drink as a snack, a figure that climbs to 70% among 25-to-34-year-olds, pointing toward drinks functioning as meal and snack replacements rather than accompaniments. Sally Lyons Wyatt, Circana’s global executive vice president and chief advisor of consumer goods and food services, framed the consumer calculus for CNBC as a choice between a beverage that is simply there and one expected “to work harder for you.”

The money is following the behavior. Starbucks priced its in-store protein coffees between roughly $5.75 and $6.75 and charges $1 and $2 respectively to add protein milk or protein cold foam to any drink, and Sam Henderson, the company’s EMEA group manager of beverage development, told CNBC that protein cold foam is selling at nearly the volume of its flat whites. PepsiCo paid $1.95 billion for prebiotic soda brand Poppi. Coca-Cola launched its own prebiotic soda, Simply Pop. Danone acquired protein drink maker Huel in a reported $1.15 billion deal. Premium pricing is holding across the category even as mainstream CPG consolidates it.

Walmart Built The Shelf Before The Boom Crested

Walmart formalized its answer to this category in November 2024 with the Modern Soda set, a dedicated in-store and online section for better-for-you carbonated brands including Poppi, Olipop, Culture Pop, and Zevia. The launch came with real distribution behind it. Zevia announced an expansion from more than 800 Walmart stores to over 4,300 locations nationally, and Poppi’s availability grew 79% to more than 4,300 doors while its SKU count in Walmart stores jumped from five to 17.

The category has since outgrown even that launch framing. Circana pegged modern soda as a $1.8 billion U.S. category as of late 2025, up 83% in dollar sales year over year. Circana’s buyer data also carries the finding that matters most in a line review: traditional soft drinks show up less often in modern soda buyers’ purchasing repertoires, which supports pitching the set as incremental growth rather than cannibalization.

New entrants keep arriving through 2026. Roxberry, billed by the brand as the first kids’ beverage in the Modern Soda aisle, entered 2,200 Walmart stores in January. Bloom Pop launched in over 4,000 Walmart stores and, per brand figures reported by Forbes, moved two million cans and $2.7 million in its first few weeks while taking the number three slot in the set. For emerging functional brands, the Modern Soda set is functioning as a scaling lane: a merchandising structure that did not exist two years ago now carries challenger brands to national distribution in a single reset.

The same pattern is running in protein, the segment Starbucks called the category’s frontrunner. Walmart is adding high-protein products to its assortment, according to eMarketer, and the tailwind behind that decision got stronger in January, when the USDA and HHS released the 2025-2030 Dietary Guidelines for Americans and raised the recommended protein intake to between 1.2 and 1.6 grams per kilogram of body weight, up from the long-standing federal baseline of 0.8. GLP-1 adoption is compounding the demand signal: Numerator data from mid-2025 found GLP-1 households outspend non-users by 25% on protein shakes, and Circana projects GLP-1 medication users will represent 35% of U.S. food and beverage sales by 2030. Danone chose Walmart as the first retailer for Oikos Fusion, a functional dairy drink built for weight-loss medication users, when it launched in August 2025, ahead of a nationwide rollout at Target, Kroger, and Wakefern that October.

The Category’s Shopper Is The Shopper Walmart Is Winning

The demographic profile driving functional beverage growth maps closely onto the shopper Walmart’s own earnings communications describe. In its Q1 FY27 release, Walmart said market share gains were led by upper-income households, and that millennial and Gen Z sign-ups made up roughly half of new Sam’s Club members. Set that against EY’s finding that more than half of surveyed consumers will pay more for functional benefits, and the implication for beverage suppliers is that premium functional pricing and Walmart’s traffic are no longer in tension. The contrast is sharper than it looks: Circana’s own 2026 outlook describes a tightening market in which premiumization is slowing overall, which makes functional beverages’ pricing resilience a category-specific exception rather than a rising tide. Bloom Pop’s first-weeks velocity and Poppi’s SKU expansion are the in-market evidence.

The social layer matters for how that shopper is reached. Some 72% of Gen Z look to social media for food and drink wellness trends, according to 2025 Datassential data cited by CNBC, and TRIP, a U.K. wellness drink startup, became TikTok Shop U.K.’s top drink brand in January 2025 on the strength of a social-first strategy. For suppliers, that argues for weighting Connect investment and creator content toward the discovery behavior this category actually runs on, rather than treating shelf placement as the whole play.

The implications split by segment. For 1P suppliers, the Modern Soda and protein sets are line-review real estate: the question for the next review cycle is whether a functional claim, a premium price point, and velocity evidence from other channels are strong enough to argue for placement in a set that is demonstrably admitting new brands. For 3P sellers, the nearer opening sits in the adjacent formats, powders, shots, shelf-stable multipacks, and emerging functional niches that benefit from Marketplace assortment breadth before any store conversation begins. The claims discipline below applies equally to both.

The Claims Are Where The Risk Sits

The category’s growth is running ahead of its substantiation. The U.K.’s Advertising Standards Authority banned a TRIP advert in 2025 for misleading claims about the drink’s health benefits, including suggestions that it could reduce stress and anxiety, alongside unauthorized nutrition and health claims. Nutritionists interviewed by CNBC note that supplements are not closely regulated by the FDA and question how effective supplement ingredients like magnesium and collagen actually are. For suppliers, the guidance is straightforward: functional claims on pack, on PDPs, and in Connect creative should be limited to what the substantiation actually supports, and brand-commissioned benefit data should be presented as brand-cited. Suppliers should also resist reading every format in national trend coverage as Walmart-viable; CBD-infused drinks anchor headlines in this category but sit outside mainstream national retail assortments.

The horizon on all of this is longer than one reset cycle. Lyons Wyatt told CNBC that younger consumers will drive the category’s growth over the next five years as they enter their high-earning years and gain buying power. That is the same five-year window in which Walmart’s own membership data already shows those consumers arriving. The functional beverage data, read that way, is less a category trend report than an early profile of the shopper suppliers will be pitching to in every line review between now and 2031.

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