Functional beverages contain ingredients that offer health benefits beyond basic nutrition. These beverages provide enhanced hydration, energy, immunity, sleep, relaxation, etc. and contain ingredients like vitamins, minerals, herbs, botanicals, amino acids and teas. Sports and energy drinks are the most popular functional beverages consumed by individuals seeking extra energy boost and endurance during physical activities and workout regimes. Plant-based beverages such as almond milk, soy milk, coconut water and fruit juices are also gaining traction among health-conscious consumers looking for dairy alternatives.
The global functional beverage market is estimated to be valued at US$ 191.54 Bn in 2023 and is expected to exhibit a CAGR of 8.6% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
The rising demand for healthy and nutritious beverage alternatives is expected to flourish the functional beverage market over the forecast period. Individuals are increasingly adopting preventive healthcare approach and seeking beverages providing functional benefits like immunity boost, hydration, weight management, heart health, digestive health etc. beyond basic nutrition. This growing demand for functional wellness has prompted key players to innovative products catering to specific health needs. Also, increasing Millennial population that prefers healthy on-the-go consumables is favoring the market growth. However, high cost of these beverages compared to carbonated drinks and juices may limit their mass consumption. Strict regulations regarding ingredients, labels and health claims are also a major challenge for market players.
Segment Analysis
The global functional beverage market can be segmented on the basis of product type and distribution channel. Based on product type, the market is segmented into energy drinks, sports drinks, functional fruit and vegetable juices, and other milk-based drinks. Among these, the energy drinks segment holds the largest market share of around 56%. This is majorly due to the increasing uptake among millennials and working population who consume energy drinks to stay active and energetic throughout the day. Sports drinks hold the second largest share owing to increasing athletic activities and physical fitness awareness.
PEST Analysis
Political: The functional beverage market is influenced by various governmental regulations. For instance, some countries have banned energy drinks sale to minors. Economic: Rising disposable income levels and changing lifestyles have positively impacted the market growth. Consumers are willing to pay premium prices for health and wellness offerings. Social: Social media plays a crucial role in raising awareness about various health benefits of functional beverages among customers. Technological: Companies are increasingly adopting new technologies to introduce innovative products in the market. For instance, some beverage players have launched drinks enriched with probiotics using advanced techniques.
Key Takeaways
The Global Functional Beverage Market Growth is expected to witness high over the forecast period of 2023 to 2030. Regional analysis shows that North America currently holds the largest share of around 35% due to rising awareness regarding health benefits of beverages. However, Asia-Pacific is expected to witness the fastest growth over the next few years on account of changing consumption patterns and lifestyles in emerging countries like India and China.
Key players operating in the functional beverage market are PepsiCo Inc., Red Bull GmbH, The Coca-Cola Company, Danone SA, Monster Beverage Corporation, JAB Holdings Company, General Nutrition Centers Inc., The Hain Celestial Group Inc., Fonterra Co-operative Group, and Amway Corporation. Key players are actively investing in product innovation and partnerships to cater to evolving consumer needs. For instance, PepsiCo Inc. launched Propel,enhanced water with essential vitamins and electrolytes in various flavours.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
