Functional Beverage Market: Size, Growth
Functional beverage is a term that is used to describe a multitude of different types of drinks from ready-to-drink beverages to herbal teas, sports drinks, energy drinks and more. The global functional beverages market has been experiencing significant growth over the last few years. There are more active fitness enthusiasts looking to enhance and boost their performance alongside consumers that are more inclined towards a healthier lifestyle.
The Covid-19 pandemic played a significant part in this increase. Overall, there is a demand for convenience beverages that not only taste good but offer a diverse nutritional profile.
In 2020, the global functional beverages market was worth an estimated $110million. With a forecasted commercial annual growth rate of 5.9%, it is expected to grow to over $200million by 2030. To dissect these numbers and help you understand the market as it stands and the reason for its growth, we’re going to look at the functional beverages market in greater detail.
What are functional beverages?
Functional beverages are non-alcoholic drinks that are made with non-traditional ingredients that are designed to aid specific bodily functions while offering additional health and nutritional benefits.
This includes dairy drinks, energy drinks, performance and sports drinks, ready-to-drink teas, smart drinks, plant milk and fortified fruit drinks. Some of the extra ingredients you often find include vitamins, minerals, amino acids, probiotics, dietary fibres, added raw fruits and more.
How big is the functional beverage market?
Despite challenges that the Covid-19 pandemic may have posed, the global functional beverages market was valued at around the $110 million mark in 2020 and is expected to reach more than $200million by 2030.
What is the Growth Rate of the Functional Beverage Market?
The above figures mean that the global functional drinks market is expected to register a commercial annual growth rate of around 5.9% in the 9 years between 2021 and 2030.
Is the functional beverage market growing or declining?
All the evidence available based on reports on the global functional drinks market suggest that it is indeed growing steadily and not likely to show any signs of declining for the foreseeable future.
Which Region Holds the Largest Share in the Global Functional Beverages Market?
It is perhaps unsurprising, but the region that holds the largest share in the functional drinks market globally is North America. Many of the key players in the industry are either based there, market a large percentage of their products there or have their largest consumer base there.
How is the functional beverages market segmented?
The global functional beverage market is segmented in several different ways, depending on the report you use as a source. The most common segments used to break down and understand this thriving market are:
- Type – dairy-based beverages, sports drinks, energy drinks, herbal and fruit teas, fruit and vegetable juices, fortified water, rehydration solutions, ready-to-drink tea and coffee and others
- Distribution Channel – online retail, supermarket/hypermarket, pharmacies, convenience stores, health stores, department stores, others
- Packaging – Bottle, cans, sachet, tetra pack, and others
- Function – hydration, weight management, health and wellness, energy and rejuvenation and others
- End-User – athletes, lifestyle users, and others
- Geography
Fastest-growing functional beverage types
Although it seems that across the board, energy drinks have continued to enjoy the fastest growth within the global functional drinks market, there are other types of functional beverages that have enjoyed increases in growth too. Dairy-based drinks, dairy alternative drinks and functional carbonates along with various ready-to-drink beverages are ones to watch in the coming years.
Top Functional Benefits Consumers Are Seeking
One of the main reasons why people buy functional drinks and why these kinds of beverages have become so popular in recent years is the fact that they offer specific functional benefits.
Whether it’s from a production or distribution point of view, to understand what is successful and not, you can look to what the most popular functional benefits are that most consumers are looking for.
Unsurprisingly, hydration tends to be the most sought after functional benefit. However, more interestingly, functional benefits like immunity, calmness and relaxation, and digestive aid also account for the steady increase in interest and consumption of these types of drinks.
Who are the Top Players in the Global Functional Beverages Market?
You can always get a sense of how popular and lucrative a food and drinks market is by the companies that are invested in it. When it comes to the global functional beverages market, there are not too many surprises when it comes to who are the top players.
The Coca-Cola Company, Nestle S.A., Red Bull and Monster Beverage Corporation compete alongside companies like Meiji Co Ltd, Dupont Nutritional Biosciences ApS and MaxNutrition to name a few.
What Are the Most Popular Functional Beverages?
Without a doubt, something that has already been touched upon, sports drinks, energy drinks and, interestingly, functional (or fortified, smart) bottled water continue to be the most popular functional beverages available.
Summary
Judging by the findings of most recent studies and reports on the global functional drinks market, there are clear signs that it is still a very lucrative and popular segment of the global beverages market. Given their popularity across the world, it’s not surprising that energy drinks and sports drinks dominate the market.
As people grow more concerned about what they are consuming, however, coupled with the need for convenient, tasty drinks that aid their health and wellness, other types of functional drinks are likely to experience increased growth too.
Consumers tend to see traditional beverages that have been bolstered with nutritionally-beneficial ingredients to be a major selling point.
Perhaps one of the most interesting developments over the next few years will be how well the functional drinks market maintains as the effects of the Covid-19 pandemic lessen as vaccination rates increase and infection rates decrease. Only time will tell if the forecast commercial annual growth rate will be met or exceeded over the next decade.