The ready-to-drink (RTD) market keeps reaching new heights. The global market size was valued at $766.6 billion in 2024 and is projected to grow to $804.8 billion this year, according to a February report from Fortune Business Insights. The global market is expected to blow past the $1 trillion market in the next few years, reaching $1.227 trillion by 2032, exhibiting a compound annual growth rate (CAGR) of 6.2% during the forecast period, the market research firm notes.

In the United States, the RTD market is expected to reach an estimated value of $247.2 billion by 2032, “driven by inclination toward fortified and gut-health-improving beverages such as kombucha, energy drinks, and functional water,” Fortune Business Insights predicts.

Specifically in the dairy space, the RTD beverage market is experiencing strong growth, Micah Greenhill, senior marketing director for Non-Alcoholic Beverages at Chicago-based ADM, tells Dairy Foods. 

“Consumers today are highly conscious of their sugar intake and are unwilling to compromise on flavor and mouthfeel. Manufacturers must strike a balance between low sugar content and delivering a rich, satisfying drinking experience.”

— Micah Greenhill, senior marketing director for Non-Alcoholic Beverages at ADM

Much of the growth in the dairy space is coming from high-protein and functional beverages that support people’s active lifestyles. “A steady RTD sector is the drinkable yogurt market, which saw over 43% of U.S. households reporting purchases in 2024, up from 40% in 2023. Further signaling this trend toward convenience, a Mintel report finds nearly 50% of Gen Z and millennial consumers have purchased yogurt drinks in the last three months,” Greenhill reveals.

In the past 12 months, 40% of all drinkable yogurt launches in North America featured a high-protein claim, he continues.

“These beverages offer benefits such as muscle recovery, satiety and sustained energy, making them popular among athletes, busy professionals and individuals looking for better-for-you options,” Greenhill explains. “Many brands are responding by developing products with high-quality proteins, minimal sugar and added vitamins and minerals, often with a clean-label focus to meet demand for naturally derived ingredients.”

Although added protein is clearly a main ingredient consumers are looking for, the market is changing, experts tell Dairy Foods. “Protein drinks continue to dominate, but we are seeing an evolution. Call it Protein+, as manufacturers add other functional ingredients like caffeine for energy and fiber for gut health to the formula,” says Allison Leibovich, marketing manager for dairy and dairy alternatives, Wayzata, Minn.-based Cargill.

Hydration also continues to be a top priority, notes Jennifer Adams, director of Ingredient Technology & Applications, Fenton, Mo.-based IFPC. “This has led to a surge in drinks containing electrolytes, coconut water, and mineral-rich waters to support optimal hydration levels. Functional waters infused with vitamins (such as vitamin C or B-vitamins) and collagen are becoming popular as consumers look for multi-functional hydration that benefits skin health, recovery and overall wellness.”

Consumers are increasingly looking for beverages that offer sustained energy without the crash often associated with high-caffeine or sugary drinks, Adams continues. “As a result, beverages are incorporating natural ingredients like matcha, green tea extract, and ginseng to provide more balanced, long-lasting energy,” she relays. “The interest in botanicals and herbal ingredients is growing as consumers seek beverages that support both physical and mental well-being. Ingredients like lavender, chamomile, elderberry, hibiscus, and rosemary are being incorporated into drinks for their calming, immune-boosting, and antioxidant-rich properties.”

The GLP-1 opportunity

(ADM proprietary research indicates that 78% of consumers engaging with anti obesity medications (AOMs) report feeling full more quickly, influencing their preference for smaller, nutrient-dense offerings, Greenhill reveals.

Digestive health is also a top concern, with 40% of GLP-1 users experiencing gastrointestinal discomfort, he adds. “Ongoing gut microbiome research reveals the significant potential of ’biotics, especially resilient postbiotics and spore-forming probiotics that can withstand tough formulation environments associated with dairy and beverages. For instance, recent clinical research finds that Bifidobacterium longum CECT7347 (ES1) postbiotic may support overall gut and digestive health.”

High-protein RTD shakes also play an important role for those taking AOMs. “[S]tudies estimate that 20% to 40% of weight loss may come from muscle tissue. High-protein shakes and RTD beverages can support muscle mass maintenance. Blending a range of protein sources, including clean-tasting and highly functional soy, pea and wheat proteins, improves protein content and diversity, along with the sensory experience,” according to Greenhill.

Adams points out that GLP-1 users often need to manage blood sugar levels. Hence, RTD beverages designed for this market are often low in sugar and calories. “These drinks focus on natural sweeteners like stevia or monk fruit, which provide sweetness without the insulin spikes associated with regular sugars. Such options help maintain blood sugar stability, which is key for GLP-1 users,” she explains

Protein can also support GLP-1 function by promoting satiety and reducing cravings, she adds. “Many manufacturers are looking to include plant-based proteins or whey protein as part of line extensions or increase the amount and quality of proteins currently offered,” Adams says. “Plant proteins offer opportunities to create blends from different sources to match the quality found in animal-based sources.”

Leibovich’s perspective is that the lines between meal replacements, functional beverages and performance drinks are increasingly blurred. “While GLP-1 users seek nutrient-dense options that complement their weight-loss regimens, busy consumers with active lifestyles also demand convenient, all-in-one solutions. This is fueling a rise of RTD beverages fortified with high-quality proteins, fiber, vitamins, and other ingredients that support both physical and cognitive performance.”

Taste still matters

Consumers on AOMs have changed the playing field for both beverage and food processors. People are increasingly focused on health and wellness in everything they consume. However, the longstanding assumption that consumers will shy away from products with weaker flavor profiles still rings true. The challenge for ingredients suppliers is to provide great-tasting products that offer zero or reduced sugar. 

Regarding RTD beverages, Vince Cavallini, Cargill’s applications manager for beverage and dairy, states sugar reduction is especially important among chocolate beverages. “Flavored milks regularly have 20, 30 or even 40 grams of sugar; trendy RTD coffee mochas can climb even higher. But it doesn’t have to be this way. Cargill offers a full portfolio of sugar-reduction tools to help brands meet their sugar-reduction goals and still deliver the indulgent drinks consumers crave,” he says. 

Cargill’s Sweety cocoa powders offer one approach, enabling modest sugar reduction with excellent chocolaty taste, he notes. “With Sweety cocoa powders, developers can reduce sugar up to 15% to 30% in a simple way, without compromising on taste. Designed specifically for chocolate-flavored beverages, Sweety cocoa powders are low in bitterness but still maintain a well-balanced chocolate flavor with a sweet perception.”

Greenhill acknowledges that formulating RTD dairy beverages with a satisfying taste while reducing sugar content is a huge challenge. “Consumers today are highly conscious of their sugar intake and are unwilling to compromise on flavor and mouthfeel. Manufacturers must strike a balance between low sugar content and delivering a rich, satisfying drinking experience,” he maintains. 

To support sugar reduction and appealing taste, ADM implements its “Replace Rebalance Rebuild” method, which replaces sweetness, rebalances flavor, and rebuilds functionality, “alongside our high-quality, low- and no-calorie sweeteners, vast starches portfolio and flavor modulation technology to build systems addressing all formulation needs,” Greenhill says. 

The ADM executive continues: “Specifically, stevia is a fantastic option for reduced-sugar RTD beverages. It can support low- or no-sugar targets, while also elevating the sensory experience and helping with clean-label product positioning since it’s naturally sourced and plant-based.”

Adams adds that combining sugar replacement options can often lead to a better sweetness profile. “We also use flavors with modifying properties to either boost desirable taste notes or suppress the flavors we find undesirable.”

Technology will change the game

Perhaps, there will be good news in the future for consumers hoping to enjoy great-tasting, lower-in-sugar beverages that pack plenty of protein. “Sugar replacement technology is advancing quickly. We will see more products that can compete in the indulgent space while still being better for you,” IFPC’s Adams predicts. 

Cargill’s Leibovich expects to see more crossover between traditional functional beverages and dairy and dairy-alternative drinks. “We’ve already witnessed the rise of caffeinated dairy-based drinks, and the next wave could focus on hydration-enhanced protein beverages, pairing whey or plant-based proteins with electrolytes like citrates to support recovery and overall wellness,” she forecasts. 

As functional ingredients become more prominent in dairy and dairy-alternative RTD beverages, formulation challenges will intensify, the Cargill executive continues. “Ingredients like caffeine for energy or L-theanine for mental clarity can introduce bitterness, astringency, and other off-notes, making taste optimization a priority. At the same time, consumer preferences continue to shift away from added sugars and artificial sweeteners, driving demand for advanced stevia-based sweetening solutions.”

Greenhill adds that RTD beverages are in a good place as they provide the convenience consumers desire. “Concurrently, high-protein snacks are only increasing in desire, as is incorporating different protein sources like plant-based proteins,” he says. “Thus, portable, high-protein formats like yogurt drinks, plant-based alternatives, or blended protein options are becoming that much more sought-after as straightforward routes to meeting nutritional goals.”

Drinkable yogurts supporting consumers taking GLP-1 medications and those on overall weight management journeys should also provide plenty of growth. “Brands that can emphasize the nutritional value and convenience of these RTD formats will be able to extend consumption occasions from offerings like yogurt drinks to pick-me-up snacks and meal replacements,” the ADM executive concludes. “Market research finds that younger consumers are more open to adding yogurt drinks to their daily diets, reinforcing anticipated success for these applications within the evolving marketplace, particularly for active, busy, and health-minded consumers.”