Prior to COVID-19, consumers were under increasing levels of stress in their daily lives, with negative repercussions on their sleeping habits. According to Euromonitor International’s Health and Nutrition Survey, fielded February 2020, nearly one-third of Americans either frequently or never got an adequate amount of sleep at night.

Some consumers need prescription medication to treat their insomnia. Many others though, are looking for less powerful and more natural solutions, which is where beverages can play a potentially important role.

Calming beverage solutions

At the forefront of sleep-promoting beverages are herbal teas. Ingredients like chamomile or valerian have been consumed as infusions for their relaxing properties for centuries, proving their effectiveness. Herbal teas also have the advantage of being natural and plant-based at a time when consumers are actively seeking these attributes.

Due to high levels of demand for calming functionalities prior to the pandemic, many sleep teas currently exist on the market. The biggest challenge for teas operating in this space will be standing out in a crowded marketplace. Consumers already have a large number of teas to choose between with similar packaging and ingredients lists. Newer teas will need to emphasize more emergent ingredients, such as cannabis or adaptogens, to grab attention.

A new lease on life for relaxation drinks

Herbal teas are not the only beverages that can speak to consumer desire for calming attributes. A new wave of functional relaxation drinks is appearing with targeted sleep-promotion claims. Relaxation drinks are not new but have never been able to break into the mainstream. Early products in the category suffered from unclear messaging about usage and had long ingredients lists at a time when functional beverages were moving sharply in the direction of clean labels.

The newer functional relaxation products shortened their ingredients lists, offering lighter, more natural products. They are also increasing the use of trendier ingredients like CBD that were not found in earlier iterations. Larger soft drinks companies are especially interested in this area, suggesting the increased market potential.

An end to the nightcap?

Other emergent beverage categories with a sleep focus could arise in the future as well. One space that has seen only a small amount of interest so far but could pick up is alcohol alternatives. Mindful drinking is a hot topic in the beverage industry overall, with sales of non-alcoholic beers and other alcohol alternatives rising quickly. According to Euromonitor International’s Health and Nutrition Survey 2020, 27% of Americans who are trying to reduce their alcohol intake cite the desire for better sleep as one of their motivations.

Consumers use alcohol to help them fall asleep, yet science shows that alcohol degrades sleep quality and leads to people waking up more tired. This presents an opportunity for a product with the right messaging, but in the plethora of new products designed for the sober curious, few have spoken to this directly.

Getting back to sleep after COVID-19

Interest in better sleep will continue to grow. Stressors—economic, political or personal—will still exist and may become more acute even post-pandemic. The pace of modern life is unlikely to slow, bringing increased stress in its wake, and increased stress can lead to poor sleep patterns. This demand for improved sleep will be one of the key areas for functional beverages to focus on in the years to come.

This report was contributed by knowledge partner: