Encapsulated bitter peptides, methods of encapsulating bitter peptides, and nutritional compositions including encapsulated bitter peptides are provided. The bitter peptides can be encapsulated in a hydrophobic matrix, such as an organogel, a solid lipid nanoparticle, a liposome or combinations thereof. The encapsulated bitter peptides can be bioavailable, can be selectively encapsulated such that peptides needed for emulsion stabilization are not encapsulated and can maintain encapsulation during further processing such as heat treatment and homogenization.