Functional Beverages Market Size
Global Functional Beverages Market reached USD 130.4 billion in 2022 and is expected to reach USD 325.1 billion by 2031 growing with a CAGR of 12.1% during the forecast period 2024-2031. In the forecast years, it is projected that rising consumer awareness of the health advantages of consuming functional beverages fortified with nutrients such as amino acids, vitamins, and minerals would lead to increased market demand.
Functional beverages provide consumers with a quick and enjoyable method to obtain the advantages they want. Some customers are looking for functional advantages that can help them manage a particular medical condition, such as probiotics to improve digestive health or beta-glucan fiber to lower blood cholesterol levels. Functional beverages offer a convenient and refreshing way for consumers to get the benefits they’re looking for.
Some consumers are interested in functional benefits that can help them manage a specific health condition, for example, managing blood cholesterol levels with beta-glucan fiber or supporting digestive health with probiotics. The rise in the number of fitness enthusiasts and growing consumer inclination towards a healthy lifestyle is expected to be the key growth drivers of the market.
Market Summary
| Metrics | Details |
| CAGR | 12.1% |
| Size Available for Years | 2022-2031 |
| Forecast Period | 2024-2031 |
| Data Availability | Value (US$) |
| Segments Covered | Product Type, End-User, Distribution Channel, and Region |
| Regions Covered | North America, Europe, Asia-Pacific, South America, and Middle East & Africa |
| Fastest Growing Region | Asia Pacific |
| Largest Region | North America |
| Report Insights Covered | Competitive Landscape Analysis, Company Profile Analysis, Market Size, Share, Growth, Demand, Recent Developments, Mergers and Acquisitions, New Product Launches, Growth Strategies, Revenue Analysis, Porter’s Analysis, Pricing Analysis, Regulatory Analysis, Supply-Chain Analysis, and Other key Insights. |
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Market Dynamics
Increased Demand for Healthy Hydration Products to Drive the Global Market Trends
The progressive inclination of consumers toward health-oriented beverages has involved probiotic food products as a requisite in the list. In addition, the sale promoting tag lines, such as ready-to-drink, on the go, and other convenience factors, such as favorable packaging altogether served by beverages, further augments the demand for functional beverages. Consumer education has been the key factor behind the rising demand for healthy hydration drinks.
The U.S. Dept. of Agriculture released a study revealing that the diet of 93% of Americans lacks the recommended amounts of essential vitamin E. Additionally, some 30% of Americans are deficient in vitamin C, some 44% do not take enough vitamin A, and 50% do not get an adequate intake of magnesium. The preference for natural and organic ingredients is rising, driven by concerns about artificial additives and preservatives.
Sports and Fitness Industry Adoption is Expected to Drive The Functional Beverages Market Growth
The sports and fitness industry has experienced a significant surge in recent years, with more people actively engaging in sports, fitness activities, and workout routines. This increased interest in health and fitness has led to a higher demand for functional beverages that can aid in hydration, energy enhancement, and recovery. According to Science Direct, The European Food Safety Authority (EFSA) and Food and Drug Administration (FDA) determine the safety and health claims of these beverages.
Athletes and fitness enthusiasts are seeking beverages that provide functional benefits to improve their athletic performance. Functional beverages with ingredients like electrolytes, amino acids, and natural energy boosters have gained popularity in this consumer segment. After intense physical activities, the body requires proper hydration and nutrients for recovery. Functional beverages formulated with ingredients like protein, carbohydrates, and vitamins are preferred by sports enthusiasts for post-workout replenishment.
High Cost of Functional Ingredients is Restraining the Functional Beverages Market
Functional beverages often incorporate specialized and premium ingredients such as probiotics, adaptogens, botanical extracts, vitamins, and minerals. Sourcing these high-quality ingredients can be expensive, especially if they are sourced from specific regions or require complex extraction processes. Formulating functional beverages with precise amounts of active ingredients requires careful production processes, which may be more complex and costly than regular beverage manufacturing.
Functional beverages often require special packaging to preserve the potency and efficacy of the functional ingredients. Packaging costs can also be higher for products that emphasize the health benefits of their contents. Some functional ingredients may not be as widely produced or available as conventional ingredients used in regular beverages. The lack of economies of scale can lead to higher costs for functional beverage manufacturers.
Market Segment Analysis
The global functional beverages market is segmented based on product type, end-user, distribution channel, and region.
The Energy Drink Segment Holds the Largest Market Share in the Functional Beverages Market
Energy drinks have gained immense popularity among consumers, particularly among the younger demographic and those seeking a quick energy boost. The trend of leading an active and busy lifestyle has contributed to the increased demand for energy drinks. Energy drinks are known for their ability to provide an instant boost in energy levels and improve alertness. This appeal has led to a large consumer base seeking these functional benefits.
Energy drinks are widely available in various retail outlets, including convenience stores, supermarkets, gas stations, and online platforms. The easy accessibility and widespread distribution have contributed to their market dominance. The marketing and branding strategies of energy drink companies have played a crucial role in establishing their dominance. Strong brand recognition and effective advertising have led to increased consumer loyalty and brand preference.
Market Geographical Share
North America is Dominating the Functional Beverages Market
North American consumers have shown a high level of awareness and health consciousness, leading to an increased demand for functional beverages that offer additional health benefits beyond basic hydration. The functional beverages market in North America offers a diverse range of products, including energy drinks, sports drinks, functional water, ready-to-drink teas, enhanced juices, and other functional beverages. This extensive product portfolio caters to a wide array of consumer preferences.
The region's robust beverage industry fosters innovation and new product development. Beverage manufacturers continuously introduce novel functional beverages with innovative ingredients and formulations, appealing to consumer preferences for new and exciting options. According to the United States Census Bureau, there were about 140,000 athletes, coaches, and umpires out of a workforce of 114 million.
Functional Beverages Companies
The major global players in the market include PepsiCo Inc, Amway Corporation, 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 Red Bull GmbH.
COVID-19 Impact Analysis
Global Recession/Ukraine-Russia War/COVID-19, and Artificial Intelligence Impact Analysis:
Covid-19 Impact:
The pandemic has accelerated an already growing trend of health awareness in public. People are looking for food and beverages that can boost immunity and decrease the chances of contracting the virus. The pandemic has accelerated the substitution of sugary drinks and soft drinks with functional beverages to curb the effects of COVID-19. Surveys have found that a majority of people say that their health consciousness has increased significantly due to the COVID-19 pandemic and that they plan to change their diets as a result.
Key Developments
- In January 2022, Halo Collective Inc. announced that it is strategically expanding into the functional beverage market with a proposed stock-based acquisition of private company operating as H2C Beverages and the entering into of a distribution and manufacturing agreement with Elegance Brands Inc.
- In July 2023, DSM and Firmenich announced that they have entered into a business combination agreement to establish the leading creation and innovation partner in nutrition, beauty and well-being. The combination will bring together Firmenich's unique leading Perfumery and Taste businesses, its world-class science platforms and associated co-creation capabilities with DSM's outstanding Health and Nutrition portfolio and renowned scientific expertise.
- In March 23, 2023, Baldwin Richardson Foods, a leading custom ingredients manufacturer for the food and beverage industry, announced that it has completed an asset acquisition of Aseptic Solutions USA Ventures, LLC, in Corona, California.
Why Purchase the Report?
- To visualize the global functional beverages market segmentation based on product type, end-user, distribution channel, and region, as well as understand key commercial assets and players.
- Identify commercial opportunities in the market by analyzing trends and co-development.
- Excel data sheet with numerous data points of functional beverages market-level with all segments.
- The PDF report consists of cogently put-together market analysis after exhaustive qualitative interviews and in-depth market study.
- Product mapping is available as Excel consists of key products of all the major market players.
The global functional beverages market report would provide approximately 61 tables, 60 figures, and 190 Pages.
Target Audience 2024
- Manufacturers/ Buyers
- Industry Investors/Investment Bankers
- Research Professionals
- Emerging Companies
