Part I of this series featured Matcha and Nitro Brews as well as novel coffees. Part II will explore functional beverages, how tea and coffee have become the base for cocktails, and why such a transformational shift in the beverage space has been occurring, recently.
Functional Beverages
Functional beverages are drinks that include herbs, mushrooms, electrolytes, vitamins, minerals, and pre/probiotics. With reduced sugar content and few artificial ingredients, they are designed to have a positive impact on health and performance (physical and mental).
Teas of all varieties are functional by their very nature, having a calming effect due to the presence of L-theanine. Moreover, chamomile tea for sleep and mint tea for digestion, even valerian tea for lifting the mood, have all been around for quite some time. So, functionality in beverages is not as new a development as one might think. Rather, it’s their evolution that is new and trending.
Typically, such drinks contain plant-based / herbal ingredients called adaptogens, which have been shown in clinical studies to have some beneficial health benefits. There are, however, some qualifications to these findings: much of the historical data comes from Soviet era studies conducted eastern bloc countries, the reliability on which has been questioned; and it substantially is derived from animal trials rather than human. Also, in certain studies, the active ingredient is dissolved in solvents such as in ethanol tinctures, and doesn’t necessary mirror commercial consumption,
While more research into adaptogens is needed, they’ve really caught on, reputed to treat stress, sleeplessness, anxiety, indigestion, and a host of other quality of life issues. While each consumer needs to decide if they experience the purported benefit, whether or not they do is secondary to the business of providing customers what they want – and more importantly, they are healthier than alcoholic drinks or sugary soft drinks, which cause harm to the body.
From a bar and restaurant perspective, the simplest means of offering a functional beverage is in tea and coffee – and various alternative infusions to standard tea and coffee.
Manisha Bhasin, Executive Chef at ITC Hotels Limited, one of Asia’s largest luxury hotel chains, says that, after they began offering hibiscus tea and turmeric tea in their establishments, the response from customers was very positive. Hibiscus is said to lower blood pressure, improving liver health, and facilitating weight loss; the much studied Turmeric contains a polyphenol called curcumin that is thought to inhibit cancerous tumor development. (In both cases, the science is promising, though not conclusive.) Bhasin says that hibiscus tea is popular in the evenings, after meals or before bed because it is caffeine free and appears to have a relaxing effect. She has also observed that at their breakfast buffets, many start their days with ginger-turmeric lattes (or the golden latte as it’s come to be known) instead of traditional tea or coffee.
The morning coffee culture itself is evolving from classic espresso shots to functional blends. In the UK, mushroom-infused coffees using the ‘bearded’ fungus, lion’s mane as well as reishi mushrooms, reddish brown with a kidney-shaped cap (also known as Lingzhi), have seen double-digit growth, with cafés offering mushroom add-ins to enhance immunity, focus or stress management. While studies have shown that these fungi contain bioactive compounds theorized to validate health claims, definitive evidence from clinical trials in humans have yet to be conducted. Still, they make people feel good without causing harm – and that’s what counts most.
Fresh Aisle offers a selection of functional cold brews, including a drink called The Rosemary Ginger Mule, in which ginger beer is shaken on ice with roasted rosemary. Rosemary is an herb that is not commonly used in beverages because of its strong aroma but added to another strong drink like ginger beer, it provides a surprisingly suitable accompaniment. Packed with antioxidants, rosemary is known to contain anti-inflammatory, and antimicrobial compounds (like carnosic acid and 1,8-cineole) that support brain health, improve memory, aid digestion, and boost immunity.
The outlet also offers a variety of cascaras, which is a kind of coffee preparation where the dried, outer skin and pulp of the coffee cherry is removed during the production of coffee beans. Brewed into a tea-like tisane, it offers a fruity, sweet, and tangy flavor reminiscent of hibiscus, rosehip, and dried fruits. Offered both hot and cold, it is a way to naturally decaffeinate the beans while retaining a bold flavor.
Meanwhile, plant-based protein lattes and collagen-boosted brews are also emerging — not just for wellness benefits, but because they also feel like a health upgrade in a cup. Just adding collagen powder to a citrus drink can transform a standard lemonade into a beauty drink, given collagen’s impact rejuvenating effect on the skin.
Popular beverages that can be found at outlets where beverages are sold include: Sparkling Collagen Water and fruit-flavored cousins; Collagen Smoothies/Juices containing vitamin C and zinc, boosting absorption; and Collagen Broths, which are savory, nutrient-dense formats and serve as an alternative for bone broth, which naturally contains collagen. Wellness Lattes containing coffee or matcha blended with collagen peptides take a common coffee beverage and turn it into a super drink. Typically, collagen is available at establishments where juices are promoted such as Jamba, Joe & the Juice, and high-end spots like 48 Collagen Café in Paris.
Founder of the International Hospitality Institute, Suborno Bose told Bar & Restaurant News that for those concerned with gut health, both pre-biotics and probiotics have made their way to become meal accompaniments with variations on the ancient Chinese fermented yellow tea, Kombucha slowly entering restaurant menus.
“It’s coming up,” he says. “But for those with a sweet tooth, Kombucha still has a ways to go to make its mark.”
Ergas elaborates: “It’s fairly common here [Colorado] to go to a coffee shop, and there's a kombucha offering. Also, at bars, it's becoming more and more common to see,” he says, adding: “I haven't seen it in restaurants where I think it would make a great addition as, I mean…myself – I like a sparkling beverage that doesn't have sugar syrups in it.”
The Daily, a café in Kolkata, India, typically uses fruits to sweeten beverages. Their orchard iced tea is a case in point – it’s sweetened with cut peach, plum, and apricot. Their Spanish latte uses the natural sweetness of condensed milk – a staple ingredient in some Middle Eastern coffees – to add sweetness. They also make cold brews (mainly coffee-based) that are similarly sweetened with fruits. Their teas, however, both hot and cold use fresh leaf from their family tea garden in Assam, according to proprietor Urvika Kanoi.
For those looking to rid themselves of sugar entirely, they can turn to water – but not what comes out of the tap. Crafted waters are fast becoming a thing. The Water Bar DC, located in Washington DC, boasts some forty waters on its menu. From functional waters like herbal water and CBD infused water (Cannabidiol extracted from hemp meant to manage inflammation and anxiety) to various imported offerings containing nothing but pure spring H2O from natural springs all over the world.
While it may seem counterintuitive for people to pay top dollar for water, Water Bar DC’s Andes Mountain Chilean water commands a price of $25 a serving – and it’s quite popular. In other establishments beverages such as Black Water, which is an alkaline water containing 70 minerals, designed as a more natural and sugar-free substitute for Gatorade and doubling as a medicinal tonic for people with acid reflux, can command even higher prices.
Reacting to my incredulity at the prospect of crafted water being priced higher than fine whiskies, Bose explains: “Years ago salt was just white salt – now Himalayan salt, sea salt, Hawaiian salt, and the fleur de sel, are highly sought after and command the price to pair.” The same can be said of chocolate, popularized through industrial production recently giving way to single origin chocolate bars. People are realizing that food and beverages once considered to be basic staples can be procured in such high quality as to be considered crafted for the connoisseur.
Indeed, waters are now judged by experts assessing each bottle’s taste, mouthfeel, pH, and terroir — highlighting that water, like wine, has unique characteristics based on its source. At the Las Angeles-based Fine Waters Society, one can obtain train to become a certified water sommelier. Some might say, “only in LA” – but it’s becoming clear that water is no longer just water.
Powering Your Day
For those taking every opportunity to contribute to sculpt their bodies – and for whom water just doesn’t do the job – protein drinks, popular mainly around gyms, have also undergone innovation, making their way into cafés and bars.
While it is coming on ten years now that Starbucks introduced its nitro cold brew, last year, the chain decided to launch new protein-centred offerings: Introduced in late 2025, these drinks use protein-boosted milk and whey-based foam to add 15 to 36 grams of protein to beverages. Options include Iced Chocolate Cream Protein Cold Brew, Iced Vanilla Cream Protein Latte, and Iced Banana Chocolate Protein Matcha.
The popularity of protein drinks has led to interesting collaborations (collabs in Gen Z speak). Premier Protein® and the iconic bakery chain Milk Bar teamed up last year to produce a high protein menu. During August, they launched the “Power Hour” during which protein beverages were offered either free or at a significant discount such as the Lemon Bar Shake containing 30g of protein, which was launched at the time.
Many customers may still prefer to get their protein from a juicy steak, but protein has landed in the glass and appears to be here to stay.
Tea and Coffee-Based Cocktails
Perhaps the earliest tea-based cocktail was concocted by an Admiral of the British navy in the 1890s called Gunfire. It was simple: black tea spiked with rum – just the kind of kick to ordinary tea typically served to lower ranked soldiers to impart liquid courage before a battle. Variations have been served in the American and Australian armed forces since. A variant with coffee, too, was mixed.
In civilian life, the Long Island Iced Tea stood as a popular beverage served in bars. A strong drink with traditionally made with five clear spirits (vodka, gin, rum, tequila, triple sec), lemon juice, and simple syrup, topped with a splash of cola for color and a hint of sweetness and shaken with ice – despite its name, contains no actual tea!
Truer tea-based cocktails include: John Daly – a spiked Arnold Palmer made with vodka, lemonade, and iced tea; Bourbon Iced Tea Punch – a mix of black tea, bourbon, and citrus; Earl Grey MarTEAni – Gin, lemon juice, simple syrup, egg white, and Earl Grey-infused gin; Hibiscus Sangria, which is hibiscus tea combined with white wine, and fruit; and Peach Tea Bourbon Julep consisting of Black tea, bourbon, peach schnapps, and mint.
And, it would be an unforgiveable omission not to mention the actual tea-based version of the age old Hot Toddy, namely the Hot Chai Toddy made from spiced black chai tea mixed with bourbon or dark rum.
Enter Matcha: While it may seem counter-intuitive for matcha to be added to hard drinks, matcha being cast for some years now as a health beverage, many independent bars have introduced matcha to their offerings, adding it to drinks containing gin, vodka, tequila, or whiskey, typically for brunch or evening menus. Most of these drinks simply involve adding matcha (or in most cases matcha syrup) to old favorites, creating drinks such as: The Morning Matcha Mimosa (for those who want to start their day with a real pop); The Matcha Mojito (which can make afternoons and evenings that much more relaxing); The Matcha Gimlet (reinventing the drink of old); Matcha Margaritas (guaranteed to give Taco Tuesdays a new twist); and The Matcha Old Fashioned (only for those who don’t find it heretical to combine bourbon with matcha).
Ergas remarks that using authentic matcha powder poses a challenge for bars. “Matcha is a powder, and typically bars don't tend to deal in powder. So, I think that that's been one of the challenges of having at least matcha incorporated more into cocktails and beverages.” For the sake of convenience, use of matcha flavored syrup has supplanted authentic matcha in various bars. It’s also cheaper than authentic matcha, and most customers drinking alcohol-based matcha beverages aren’t prioritizing the quality of the tea while imbibing.
More recent offerings preferred by the trendy crowd include: the Yuzu Matcha Martini - a citrusy, matcha-vodka cocktail offering bright, summery flavor; Yuzu Sour (with Yuzu and bourbon or Japanese whisky); the Green Tea High ball (combining whisky, green tea, and club soda); and Matcha-infused vermouth.
Carajillo, a 19th century Mexican coffee-based drink that entered the US market around 2020, saw an explosion in upscale restaurant scenes, such as in Houston, Los Angeles, and San Francisco, around 2023–2024.
The popular, modern version served in the US is typically a "shaken" (shakeado) or, sometimes "placed" (puesto) combination of espresso and Licor 43, a liqueur said to contain a combination of 43 botanicals and spices. However, some variations use rum to increase its potency. The alcohol content of Licor 43 is typically between 19 and 31 percent. The addition of 80 proof Rum of 40% concentration provides the strength to which seasoned hard drinkers are accustomed.
As fashionable as the drink has become, Ergas says the forerunner to Carajillo – the espresso martini – is far more prevalent. There is a simplicity about it that makes it both appealing to the customer and easy to provide to them. “You know, places that only have 10 or fewer cocktails on their menu will often have the espresso martini as one of them,” he says.
Ergas adds: “It's tricky, because in order to do a real one of these beverages properly, you gotta [sic.] have an espresso machine. And, bars often don't have them,” says Ergas.
“But Latin American places often do have them,” Ergas elaborates. “Like, you know, down in Mexico and in other places, other countries down there. So…you know, and the espresso martini, I don't believe they're [certain American bars] using actual espresso, like, brewed, on-the-spot espresso. I believe they're using some sort of liqueur, or some sort of preparation.”.
Other trending drinks include:
- Dalona Dominicanana, which is a trendy cocktail featuring a base of aged rum, coffee liqueur, and cream, topped with a frothy, whipped Dalgona coffee layer;
- Cold Brew Negroni, having made its name as a sophisticated mix of gin, vermouth, and Campari with a cold brew coffee twist;
- Coffee-Infused Old Fashioned consisting of a robust blend of whiskey, bitters, and coffee syrup or cold brew, often using coffee-forward ingredients like Mr. Black liqueur;
- Oaxacan Coffee – a drink not for the faint of heart with a complexitythat consists ofmezcal, the smoky agave-based spirit from Mexico, coffee, piloncillo syrup and bitters; and
- "Dessert in a Glass" is gaining popularity, often rich, creamy, and sweet cocktails like the Tiramisu Cocktail are popular for after-dinner.
What's Driving the Beverage Boom?
A defining trend shaping hospitality beverage menus in 2026 is Gen Z’s evolving relationship with alcohol — or more aptly, their reduction in alcohol consumption.
Alcohol sales in general are declining. In 2025 Gallup revealed American drinkers comprise 54% of the population, the lowest in proportion in almost 90 years.
For Gen Z, the abstainers or “sober curious” population is higher than in any demographic. The same poll found that the proportion of Americans under the age of 35 who say they drink has dropped by 10% in just two years coinciding with the notion that even moderate drinking is detrimental for the body.
Moreover, a survey by EduBirdie, which polled 2000 Americans of age 21 and older found that 63% of Gen Zers reported a decreased interest in consuming alcohol since they first tried it. Also, for Gen Z, the age at which this comes into play is just twenty-three on average, whereas for Baby Boomers it’s 44.
Of any generation, Gen Z has the highest proportion of members who consider themselves lonely – 73% according to Psychology Today – that’s higher than seniors. It’s no coincidence then that they also are most active on social media than any generation, uploading pictures of outings en masse. Many in the Gen Z demographic cite an aversion to seeing themselves in cringe-worthy snaps on social media, caused by overconsumption of alcohol, as a driver in drinking less. Engaging on social media exposes them to trending beverages, and those, which are the most photogenic seem to become most popular.
It follows then that the non-alcoholic beverages market size estimated at USD 1.41 trillion in 2025 and is predicted to increase from USD 1.52 trillion in 2026 spiking to USD 2.85 trillion by 2035.
“Treat Culture”: Indulgence Meets Daily Ritual
The beverage experience itself has become a kind of luxury ritual. People no longer view drinks as simple thirst-quenchers — they want ‘Instagrammable’, sensory and shareable moments. This underlies the rise of extravagant lattes, layered tea drinks, colorful mocktails, and dessert-style beverages that function as both a treat and a social currency.
Bars and cafés are responding by layering beverages with rich narratives and visual flair. Starbucks’ Pink Drink, a classic Strawberry Açaí refresher with coconut milk, upgraded with vanilla sweet cream cold foam and toppings like freeze-dried fruit or candy pearls, is a case in point.
Here again, Gen Z tops the list in treat culture. According to a survey from Circana in 2025 20% of Gen Z respondents say they buy a little treat for themselves daily, and 53% say they reach for small indulgences because they can't afford bigger ones – these tend to be in the either snacks or in the beverage space – or a combination of both like a beverage desert.
The expansion of beverage offerings has created a world of choice – this too, almost all over the world as social media knows no borders, and young people want to be a part of social culture that the internet is increasingly homogenizing.
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