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The functional drinks market size is forecast to increase by USD 77.3 billion at a CAGR of 10.05% between 2024 and 2028. New product launches are driving innovation and expanding the product offerings in the market, attracting consumers looking for new and exciting options. The health benefits of functional drinks, such as improved energy levels, enhanced focus, and better digestion, are appealing to health-conscious consumers. Additionally, the increasing consumption by millennials, who are often early adopters of new trends and products, is driving growth in the market as well. In recent times, businesses worldwide have placed considerable emphasis on launching new products, unveiling a variety of flavored offerings with unique health advantages. These encompass a spectrum of beverages, including performance drinks, fitness drinks, fortified beverages, energy drinks, sports drinks, and beverages targeting brain health.
It also includes an in-depth analysis of market trends and analysis, market growth analysis and challenges. Furthermore, the report includes historic market data from 2018 - 2022.
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The market is witnessing significant growth due to the rising consumer demand for health and wellness beverages. These, also known as nutrient-infused drinks, enhanced beverages, or wellness beverages, offer various benefits such as improved energy levels, enhanced mental focus, and better overall health. They include a wide range of products like performance drinks, fortified beverages, and energy drinks, catering to different consumer needs. With an increasing focus on health and fitness, the market is expected to continue expanding, offering innovative products such as mood-enhancing drinks, digestive health drinks, and adaptogenic drinks.
The new product launches are notably driving the market growth. In recent years, companies in the global market have been emphasizing new product launches, introducing a range of flavored products with distinctive health benefits. This includes performance drinks, fitness drinks, energy drinks, sports drinks, and brain health beverages. For example, in 2020, Pepsico launched Driftwell, a new drink aimed at helping consumers relax and unwind before bedtime.
Similarly, in the same year, IVUSION Beverage Company LLC introduced IVUSION, a hydration drink designed to hydrate without excessive sugar, developed by medical professionals inspired by IV therapy. These new products cater to the growing demand for vitamin-enriched drinks, mineral-infused beverages, and adaptogenic, and herbal beverages. These advancements among companies are expected to fuel market growth in the forecast period.
The growing popularity of e-commerce is the primary trend driving the growth of the market. The rise in the number of e-commerce portals and the penetration of smartphones have enabled companies to sell through e-commerce channels. Developing countries such as China and India are witnessing a rise in the number of online grocery stores in major cities to provide grocery items on demand, including functional drinks.
This trend is encouraging companies in the market to expand their presence online. This is helping them save operating and overhead costs when compared with the physical store format. In addition, benefits offered by e-commerce websites, such as easy access to product-related information and enhanced shopping experience, are increasing online sales. All these factors are driving the growth of the market.
The increasing concerns about obesity are the major challenges impeding the market growth. Weight control is a prime concern for consumers when it comes to health and wellness. Consumers require food that have low calorie and sugar content to control weight. The major sources of added sugars are fruit juices and energy drinks. A can of energy drink, on average, contains about 26.5 grams of added sugar, while large cans have double the amount of added sugar.
They also contain a significant amount of fats, artificial sweeteners, caffeine, and starch. Hence, many people avoid consuming functional drinks. A study conducted by the American Academy of Pediatrics (APP) suggested that consumers who train rigorously in hot and humid weather conditions only need a small amount of sports drinks regularly. An inappropriate amount of consumption can cause major health issues such as weight gain, obesity, and others. These factors may impede the growth of the market growth during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.
Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Archer Daniels Midland Co. - The company offers functional drinks that include cider, spirits, and drinks such as wine which can be consumed as per the requirements.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
Technavio has segmented the functional beverages market based on products such as energy beverages, functional fruit and vegetable juices, sports beverages, prebiotics and probiotics, and others. The market share growth by the energy beverages segment will be significant during the forecast period. Energy drinks are primarily consumed by young consumers in the age group of 18 to 34 years. They are also used as mixers for alcoholic cocktails as they lower the effect of alcohol, increase drinking capacity, and reduce dizziness. These factors are increasing the demand in the market.
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The energy beverages segment showed a gradual increase in market share of USD 28.70 billion in 2018. The market is observing an increased demand in North America. The rising demand in North America has increased their availability through improved channels of distribution, thereby making them more accessible. This has further increased the scope for growth in the segment.
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APAC is estimated to contribute 41% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
Consumers in the region are giving up carbonated drinks and are exhibiting interest in this owing to growing health awareness. Changes in lifestyles due to long and demanding working hours, especially among the working class, have also boosted the demand in APAC. In addition, The demand for nutritious and easily digestible food, such as probiotic, dairy-based, and juices, is increasing among older people. As a result of these factors, the market will witness significant growth in APAC during the forecast period.
Segment Overview
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The market offers a wide variety of beverages designed to cater to specific health needs and lifestyles. From hydration beverages and electrolyte drinks for replenishing fluids and minerals to immunity boosters and antioxidant drinks for overall health, these beverages provide functional benefits. They also include options like cognitive drinks for mental acuity, probiotic beverages for gut health, and protein drinks for muscle recovery. With offerings ranging from natural energy drinks to meal replacement drinks, the market caters to diverse consumer preferences and health goals.
The market offers a diverse range of beverages tailored to meet specific health and wellness needs. From functional hydration beverages and stress relief drinks to prebiotic drinks and gut health drinks, these products are formulated to support various aspects of well-being. Additionally, the market includes options such as weight management drinks, recovery beverages, and post-workout drinks to aid in fitness and health goals. Other offerings like joint health drinks, bone health beverages, and Organic functional drinks cater to consumers seeking natural and holistic options. With a focus on innovation, the market also features functional tea, functional coffee, and functional water, along with enhanced juice, functional smoothies, and superfood beverages for added nutritional benefits. Moreover, plant-based functional drinks, performance-enhancing beverages, and functional shots offer convenient and effective ways to support an active lifestyle.
Market Scope |
|
Report Coverage |
Details |
Page number |
183 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 10.05% |
Market Growth 2024-2028 |
USD 77.3 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
8.35 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 41% |
Key countries |
US, China, Japan, Germany, and Canada |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Archer Daniels Midland Co., Clif Bar and Co., Danone SA, Glanbia plc, Gujarat Cooperative Milk Marketing Federation Ltd., Kerry Group Plc, Keurig Dr Pepper Inc., Kruger GmbH and Co. KG, Lifeway Foods Inc., Monster Beverage Corp., Nestle SA, Otsuka Holdings Co. Ltd., PepsiCo Inc., Probi AB, Red Bull GmbH, Suntory Holdings Ltd., The Coca Cola Co., The Kraft Heinz Co., and Yakult Honsha Co. Ltd. |
Market dynamics |
Parent market analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the market forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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