December 9, 2023

Functional Beverages Market Size Soars as Consumers Embrace Healthy Lifestyles

Today’s consumers are embracing functional beverages as more than just thirst quenchers; they are integrating them into their lifestyles to address a variety of preferences and health concerns. Functional beverages are no longer just about hydration; they are about providing energy boosts, combating stress and fatigue, and filling nutritional gaps left by less healthy dietary choices. With the rise in obesity rates, which can lead to conditions such as diabetes and cardiovascular diseases, consumers are increasingly turning to beverages that support weight management and overall well-being. According to the World Health Organization (WHO), the incidence of obesity has tripled since 1975, with 39 million children under the age of 5 suffering from obesity in 2020. This trend has been partially driven by the consumption of empty calories from traditional beverages like soft drinks and pre-sweetened teas, which offer little to no nutritional value. As a result, the demand for health-promoting products such as fortified foods and functional beverages has surged, and this trend is expected to drive growth in the functional beverages market.

Energy Drinks to Remain a Significant Growth Contributor in the Functional Beverages Market

Energy drinks are expected to play a crucial role in the continued expansion of the functional beverages market. These beverages not only provide an instant energy boost but also offer physical and mental stimulation. Additionally, they support skeletal muscle development and cardiovascular function. Responding to consumer demands, manufacturers of functional beverages are formulating their products with ingredients like ginseng to promote overall health and wellness. Some are even incorporating immune health support functionality, aligning with the growing interest in products that enhance well-being. The years ahead are poised to witness substantial growth in the energy drinks segment, making a significant contribution to the overall value of the functional beverages market.

Asia Pacific to Present Potential Growth Opportunities for the Functional Beverages Market

The rising prevalence of chronic diseases such as osteoporosis, arthritis, and cardiovascular disorders has driven the consumption of healthy foods and beverages. In addition, the increasing popularity of convenience beverages, coupled with the busy lifestyles of consumers in Asia Pacific, has boosted sales of functional beverages such as functional sodas, juices, teas, sparkling water, and other energy drinks. The high incidence of acquired diseases like diabetes in emerging economies such as China and India has prompted consumers to adopt healthier diets and active lifestyles. According to the International Diabetes Federation, approximately 77 million individuals were diagnosed with diabetes in 2019, and this number is expected to surpass 100 million by 2030. This heightened awareness of the importance of consuming healthy foods and drinks has reshaped consumer preferences, with a growing preference for natural sweeteners like stevia in energy drinks. Leading food and beverage companies like Coca-Cola and PepsiCo Inc. have committed to using natural ingredients while reducing sugar content in their beverages, further driving demand for functional beverages in the region. With the thriving e-commerce industry and increasing digitization, sales of functional beverages are anticipated to surge across Asian countries in the coming years.

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Functional Beverages Market: Competitive Landscape

The functional beverages market is highly fragmented, with small and medium-sized enterprises competing alongside large corporations. Fierce competition in the market has prompted companies to innovate their products and pursue growth strategies such as mergers and acquisitions and strategic alliances. Recent developments include new product launches and the exploration of new distribution channels. For example, in 2021, Koia announced the distribution of its products in 7-Eleven convenience stores in the US. In 2020, PepsiCo Inc. introduced Driftwell, a functional beverage designed to reduce stress without inducing drowsiness, thanks to the inclusion of L-theanine, a compound found in tea leaves. GacLife launched a line of healthy functional beverages in 2019, addressing various health needs. In 2022, Halo Collective Inc. entered the functional beverages market by acquiring H2C Beverages and establishing a $30 million distribution and manufacturing agreement with Elegance Brands Inc.

Key players in the global functional beverages market include PepsiCo Inc., DANONE S.A., Coca-Cola, Red Bull GmbH, Monster Beverage Corporation, DuPont Nutrition Biosciences ApS, Nestle, and Clif Bar.

Global Industry Analysis (2018 – 2021) – Growth Trends and Market Forecast (2022 – 2029)

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This press release first seen on Brilad