Beverage Trends
Energy Drinks Are Becoming Gen Z's Coffee
Celsius, Alani Nu, and a wave of better-for-you challengers are pulling morning occasions from CPG coffee.
By FTF Editorial Team·May 8, 2026·5 min read
Functional energy drinks grew 24% last year while ground coffee was flat. The morning routine is being unbundled, and Gen Z is leading the shift.
What happened
Better-for-you energy brands (Celsius, Alani Nu, C4, Ghost) collectively grew 24% in dollars last year, while traditional energy was up 6% and ground coffee declined 1%. The fastest-growing consumption occasion is 6-10am, historically owned by coffee.
Why it matters
Coffee built its franchise on a daily morning ritual. Functional energy is now winning that ritual among shoppers under 35 with sugar-free positioning, fruit-forward flavors, and on-the-go convenience.
Market impact
Expect Keurig Dr Pepper, Pepsi, and Coca-Cola to deepen energy bets, and Starbucks to push harder into RTD energy formats. Coffee brands need a credible cold, sweet, sugar-free morning option, fast.
Consumer insight
Gen Z drinks energy without the performance framing: flavor, mood, and aesthetics drive the choice. The functional claim is permission, not motivation.
Strategic takeaway
Coffee brands should treat better-for-you energy as a direct competitor for the morning occasion, not a separate category. Innovation in cold, sweet, low-sugar formats is non-negotiable.
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