Global Functional Beverages Market - 2023-2030

Market Overview

Global Functional Beverages Market reached US$ 130.4 billion in 2022 and is expected to reach US$ 325.1 billion by 2030 growing with a CAGR of 12.1% during the forecast period 2023-2030. 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 refer to a category of beverages that go beyond basic hydration and provide additional health benefits due to the inclusion of various functional ingredients. These beverages are formulated to address specific health concerns or offer enhanced nutritional value. They are designed to promote overall well-being, support specific bodily functions, and improve health outcomes.

Nutraceutical beverages combine elements of nutrition and pharmaceuticals, offering health benefits beyond their basic nutritional value. They may contain bioactive compounds and functional ingredients with demonstrated health benefits. Health drinks are beverages designed to enhance overall health and well-being. They often contain vitamins, minerals, antioxidants, or other functional ingredients that support specific health functions.

Market Dynamics

Growing Demand for Healthier Drinks as Compared to Carbonated Drinks is Driving the Functional Beverages Market

Carbonated drinks are often associated with high sugar content, which has raised concerns about obesity, diabetes, and other health issues. Consumers are looking for healthier alternatives that provide hydration without excessive added sugars. The demand for beverages with functional ingredients such as vitamins, minerals, antioxidants, prebiotics, probiotics, and natural extracts has grown significantly.

Consumers are increasingly looking for beverages with clean and transparent labeling, indicating natural ingredients and no artificial additives. Functional beverages often meet these criteria, making them a more attractive option compared to carbonated drinks with complex ingredient lists. According to Euromonitor International, the total volume growth across all channels of functional beverages tracked was down 3% globally in 2020.

Rising Inclination Towards Non-Alcoholic Beverages is Expected to Foster the Functional Beverages Market

The global health and wellness trend has led to a shift in consumer preferences towards healthier lifestyle choices, including reducing alcohol consumption. Health-conscious consumers are seeking non-alcoholic beverages that offer functional benefits to support their well-being. Increased awareness of the potential health risks associated with excessive alcohol consumption, such as liver damage, cardiovascular issues, and addiction, has encouraged consumers to explore non-alcoholic alternatives.

Changing social norms and cultural shifts have made non-alcoholic beverages more socially acceptable and desirable in various settings, including social gatherings, work events, and dining occasions. The market has witnessed a surge in the availability and variety of non-alcoholic beverages, including functional beverages. Consumers now have access to a diverse range of options that cater to different tastes and preferences.

Competition from Traditional Beverages is Hindering the Functional Beverages Market

Traditional beverages like carbonated soft drinks, fruit juices, and other non-functional beverages have been popular for many years, leading to strong consumer preferences and brand loyalty. These established preferences can make it challenging for functional beverages to gain market share. Traditional beverages are familiar to consumers, and their taste profiles have been widely accepted.

Traditional beverages often have lower price points compared to some functional beverages that contain premium ingredients or specialized formulations. Price-sensitive consumers may opt for more affordable traditional options. Traditional beverages have well-established distribution networks and are widely available in grocery stores, convenience stores, and restaurants. In contrast, functional beverages, especially newer brands or niche products, may have limited distribution, making them less accessible to consumers.

COVID-19 Impact Analysis

The COVID-19 Analysis includes Pre-COVID Scenario, COVID Scenario, and Post-COVID Scenario along with Pricing Dynamics (Including pricing change during and post-pandemic comparing it with pre-COVID scenarios), Demand-Supply Spectrum (Shift in demand and supply owing to trading restrictions, lockdown, and subsequent issues), Government Initiatives (Initiatives to revive market, sector or Industry by Government Bodies) and Manufacturers Strategic Initiatives (What manufacturers did to mitigate the COVID issues will be covered here).

COVID-19 Impact

In June 2020, 80% of consumers said they were planning to eat or drink more healthily because of COVID-19. Research suggests that vitamin C and omega 3 are the ingredients most associated with immune health. The pandemic has increased the visibility of functional beverages, especially in online stores and health store websites. The pandemic is expected to accelerate the online market for functional beverages in 2022 as consumers become accustomed to buying their products online. Social distancing guidelines are likely to remain in effect for part of 2022, so online sales are expected to remain high.

Segment Analysis

The global functional beverages market is segmented based on product type, end-user, distribution channel, and region.

By End-User, The Fitness Lifestyle Segment is Estimated to have Significant Growth During the Forecast Period

Fitness lifestyle users, including athletes, fitness enthusiasts, and health-conscious individuals, prioritize their well-being and actively seek products that support their fitness goals and active lifestyles. Functional beverages align with their health-conscious choices, as these drinks often contain ingredients that aid in hydration, energy, recovery, and overall well-being.

Athletes and fitness enthusiasts look for beverages that can improve their performance and endurance during workouts and physical activities. Functional beverages with ingredients like electrolytes, amino acids, and natural energy boosters cater to this need. The main factor influencing the performance of athletes in response to hydration is the environment temperature. In temperate climate, dehydration by 1-2% of body mass has no effect on endurance performance when the exercise duration is around 90 min, but performance is impaired when the level of dehydration is higher than 2% of body mass and the exercise duration is longer than 90 min.

Geographical Analysis

Asia Pacific is The Fastest Growing Market in The Functional Beverages Market

Asia Pacific is home to a significant portion of the global population, with several countries experiencing steady population growth. The region's large and diverse consumer base presents immense opportunities for the functional beverages market. Economic growth in many Asian countries has resulted in an increase in disposable income levels. As a result, consumers have more spending power and are willing to invest in healthier and premium beverages, including functional beverages.

Rapid urbanization in Asia Pacific has led to changing lifestyles, with more people adopting fast-paced and stressful routines. Functional beverages that offer hydration, energy, and health benefits cater to the needs of busy urban dwellers. The popularity of Western functional beverages, such as sports drinks, energy drinks, and health-oriented juices, has grown in Asia Pacific, driving local demand for these products.

Competitive Landscape

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.

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 2023

• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies