The functional beverage market includes drinks containing ingredients aimed at promoting general health and well-being beyond basic nutrition. Functional beverages provide benefits like hydration, energy, weight management, and immune support. Energy drinks dominate the market due to their convenience of providing a boost to focus and alertness. Sports drinks are also popular for rehydration and refueling after exercise. Probiotic drinks offer gut and digestive health, while plant-based wellness drinks contain ingredients like vitamins, botanicals, nutrients, amino acids, and antioxidants.
The global functional beverage market is estimated to be valued at US$ 220.66 Mn in 2023 and is expected to exhibit a CAGR of 6.6% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
Rising health awareness among consumers is expected to flourish the functional beverage market over the forecast period. Consumers are increasingly focusing on preventive healthcare and active lifestyles. Functional beverages augmented with supplements are gaining popularity for their benefit of consuming nutrition easily without effort. Another driver fueling the market growth is increasing influence of social media. Health-conscious individuals widely share reviews and recipes of nutrient-dense beverages on various online platforms, attracting more users. This has boosted the product visibility and demand from young demographic substantially.
Segment Analysis
The functional beverage market is dominated by the carbonated soft drinks segment. Carbonated soft drinks account for over 40% of sales in the functional beverage market as products such as energy drinks, flavored drinks have gained immense popularity among consumers, especially young adults and millennials. The rising health consciousness among consumers has also boosted the sales of non-carbonated drinks such as bottled water, juices, tea and coffee. Among the non-carbonated segments, the bottled water segment is currently the fastest growing segment driven by increasing consumption of purified water.
PEST Analysis
Political: Functional beverages face strict regulations regarding health claims and ingredients used. Different jurisdictions have implemented various standards regarding labelling of contents, permitted ingredients and health claims for functional beverages.
Economic: Growth in incomes coupled with rapid urbanization in emerging economies has increased consumer spending on health and wellness products. This has significantly boosted demand for functional beverages in regions such as Asia Pacific and Middle East and Africa.
Social: Rising health awareness and changing lifestyles are influencing consumer food preferences. There is high demand for beverages fortified with nutrients and ingredients that provide functional benefits. Social media is also promoting functional wellness trends contributing to market growth.
Technological: Beverage companies are investing in R&D to develop innovative products incorporating ingredients and formulations to achieve targeted wellness objectives. Advanced processing technologies allow development of stabilized products with minimal processing and added sugars.
Key Takeaways
The Global Functional Beverage Market Growth is expected to witness high over the forecast period of 2024 to 2031 driven by the expanding health and wellness industry.
The Asia Pacific region is expected to witness the fastest growth in the functional beverage market over the coming years. China, India are expected to be the major revenue generators in the region owing to rising health awareness, growing middle class and increasing inclination towards functional beverages.
Key players operating in the functional beverage market are PepsiCo, The Coca-Cola Company, Nestle, Red Bull, Danone, Abbott Laboratories, Kraft Heinz Company, Mondelez International, General Mills. PepsiCo commands the largest share of the carbonated soft drinks segment. Coca-Cola is a significant player in the non-carbonated drinks segment with its portfolio of brands including Dasani, Smartwater and Minute Maid. Nestle is a prominent player with its coffee and nutritional drink brands such as Nescafe and BOOST. Red Bull has a stronghold in the energy drinks segment.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
