The Functional Beverage Market is estimated to be valued at US$ 191.54 Bn in 2023 and is expected to exhibit a CAGR of 8.6% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Functional beverages are non-alcoholic beverages that provide additional health and nutritional benefits beyond their inherent refreshment. They contain ingredients such as vitamins, minerals, amino acids, herbs, botanicals, nutrients and antioxidants. Functional beverages are designed to give hydration as well as improve physical performance, provide energy and enhance overall well-being. They support specific health issues or physiological functions in the human body like immunity, digestion, heart health etc.
Market key trends:-
One of the key trends in the functional beverage market is rising health consciousness among consumers. People are increasingly focusing on living a healthy lifestyle by consuming beverages that provide additional health benefits along with hydration. Rise in diseases such as diabetes and obesity has made consumers proactively manage their health through balanced diets and nutritional beverages. This has significantly boosted the demand for functional beverages fortified with vitamins, minerals, antioxidants, botanicals and plant extracts.
- Threat of new entrants: The functional beverage market requires huge investments for R&D, branding, and distribution networks. Large players enjoy economies of scale which poses entry barriers for new players.
- Bargaining power of buyers: Buyers have moderate bargaining power due to availability of substitute products. However, strong brand loyalty of consumers limits their bargaining power.
- Bargaining power of suppliers: Suppliers of raw materials like fruits, herbs, and packaged water have low to moderate bargaining power due to availability of substitute suppliers.
- Threat of new substitutes: New substitutes like sports/energy drinks, dairy beverages and packaged juices pose threat to the market.
- Competitive rivalry: Intense competition exists among existing players due to established brand images and expansion globally.
- Strength: Wide product portfolio and global presence of leading companies. Increasing health awareness drives demand.
- Weakness: Premium pricing of functional beverages limits mass consumption. High R&D and marketing costs incurred.
- Opportunity: Untapped rural markets in developing regions offer growth opportunities. Innovation of products targeting specific population segments.
- Threats: Stringent regulations associated with health claims. Vulnerable to commodity price fluctuations of raw materials.
The Global Functional Beverage Market Demand is expected to witness high growth, exhibiting CAGR of 8.6% over the forecast period, due to increasing health consciousness among consumers. North America dominates the global market due to rising diabetic and obesity rates pushing demand for healthy drinks.
Regional analysis: Asia Pacific is the fastest growing market for functional beverages attributed to changing lifestyles, rising living standards and health awareness in major countries like India and China. The region accounts for over 35% of the global market share.
Key players: Key players operating in the functional beverage market are PepsiCo Inc., Red Bull GmbH, 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 Amway Corporation.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it