The drink, which is already being marketed as Bio Drachen Trank (organic dragon potion), has a high nitrate content which the students found stops the process of tooth decay and prevents cavities.
Around 95 percent of people suffer from tooth decay in the industrialized world, mainly because of a diet high in sugar and poor dental hygiene.
Tooth decay occurs when a sticky acidic film called plaque builds up on teeth and begins to break down their surface. The bacteria in plaque produces acid - but the growth of this bacteria can be slowed down by nitric oxide.
The students came up with the beetroot drink as beets are known to be healthy and they have a relatively high inorganic nitrate content - which the body converts to nitric oxide.
They tested the drink on fellow students: 25 people regularly drank a nitrate-free juice and 25 had a nitrate-rich juice.
"We concluded that regularly consuming the beetroot juice provides enough nitrite to control the growth of lactic acid bacteria," project leader Otmar Höglinger said.
A pH test on the saliva of the volunteers who drank the nitrate-rich juice showed that it contained less acids than the saliva of those who had normal juice.
The Bio Drachen Trank, which also contains calcium and aronia berry, is now available in some shops and is being marketed by Upper Austrian beverage company Voglsam GmbH.
Studies have shown that drinking two cups of beet juice a day can also temporarily lower blood pressure.