Functional Beverages Market Size
| Study Period | 2018 - 2028 |
| Market Size (2023) | USD 148.26 Billion |
| Market Size (2028) | USD 203.42 Billion |
| CAGR (2023 - 2028) | 6.53 % |
| Fastest Growing Market | Asia Pacific |
| Largest Market | North America |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Need a report that reflects how COVID-19 has impacted this market and its growth?
Functional Beverages Market Analysis
The Functional Beverage Market size is expected to grow from USD 148.26 billion in 2023 to USD 203.42 billion by 2028, at a CAGR of 6.53% during the forecast period (2023-2028).
Post-Covid-19, the market has witnessed a surge in demand for products that provide functional benefits, such as immune health, which is likely to impact the market positively. Consumers are increasingly seeking functional beverage products as they believe might aid in the body's defenses. Countries like the United kingdom have already announced a proof plan to counter rising obesity in the country with campaigns like '' better health''. Such initiatives are being considered a potential for the market that earns consumers turning to opt for a functional beverage with functional benefits. Increasing demand for innovative products, like plant-based and lactose-free beverage products, is driving market growth, while the inclusion of CBD-infused functional beverages is expected to be an opportunity for the future market.
Many functional drinks offer numerous health benefits, including hydration, fluid maintenance, and nutritional benefits. With the aging baby boom generation willing to invest in innovative products that will enhance their lives, the functional beverage industry is increasingly driven by consumers' recognition of the link between diet and health. Market players are therefore increasingly developing new products regularly to further develop the studied market.
As more consumers gain awareness and experience with the online and DTC distribution models, the market is expected to witness a transition of online channels by functional beverage manufacturers in the coming years. Additionally, energy drinks are becoming increasingly popular among college students and corporate workers as a substitute for coffee. Furthermore, these energy drinks are becoming more popular as mixers for alcoholic beverages.
Functional Beverages Market Trends
This section covers the major market trends shaping the Functional Beverage Market according to our research experts:
The Growing Demand for Healthy Hydration Products
The progressive inclination of consumers toward health-oriented beverages has involved probiotic food products as a requisite in the list. In addition, the sale promoting tag lines, such as “ready to drink,” “on the go,” and other convenience factors, such as favorable packaging altogether served by beverages, further augments the demand for probiotic drinks, including kombucha. Consumers have started to prefer functional drinks over fruit juices and carbonated drinks.
With consumers now increasingly aware of the health implications associated with soft drinks categories, concerned drinkers are frequently shunning vilified categories, like carbonates and juices, in favor of ‘healthier choices, such as soymilk, probiotics, and other functional drinks. Consumer education has been the key factor behind the rising demand for healthy hydration drinks. The trend of healthy hydration owes its success to the growing awareness of fermented drinks with natural ingredients and the increasing acceptance of consuming probiotics.
Asia-Pacific is the Fastest Growing Region
The high incidence of cardiovascular disease, osteoporosis, and arthritis, coupled with the growing demand for convenience beverages and the changing lifestyle among Asian consumers, is the primary driver for the growth of functional energy drinks, fortified/functional plant-based, and malt-based hot drink sales in the market. Furthermore, due to the high prevalence of diabetes in countries like India and China, consumers are becoming more aware of the importance of a healthy diet and active lifestyle, encouraging consumers to prefer natural sweeteners, such as stevia beverages. According to the International Diabetes Federation, In 2022, India is one of the 7 countries that make up the South East Asia region. In the South East Asia Region, 90 million people have diabetes; by 2045, this number will rise to 151.5 million. Thus, companies like PepsiCo Inc. and Coca-Cola are committed to removing artificial ingredients and reducing the sugar content in their products.
Additionally, Australia is one of the major markets for the functional beverage in the Asia-Pacific region. Health-conscious Australians are going out of their way to consume healthier food products, particularly products that have a functional benefit to their health. As a result, functional beverage products have seen tremendous growth in recent years. A few examples of trending functional beverages in the functional beverage sector of Australia include fermented drinks such as Kombucha and nootropic drinks. Consequently, the functional beverage industry in the country has undergone some changes over the last few years. Companies have adjusted their product innovation strategies to meet the changing demands of consumers. For instance, in April 2021, MOJO launched its new MOJO Kambucha Soda which supports a different aspect of gut health. The newly launched product is low in sugar and is stevia free with 2.5 grams of dietary fiber per serving. It is available in three distinct flavors: Tropical Twirl, Cola Kiss, and Berry Blitz.
Functional Beverages Industry Overview
The functional beverage market is competitive and comprises numerous regional and international competitors. Players are also extensively focusing on providing consumers with innovative offerings while including functional benefits in each of their products. Furthermore, while engaging the consumers with innovation and expansion strategies, key players are capitalizing on the market revenue. Many companies operating in the market are embarking on product innovation, mergers, and acquisitions as their key strategies to achieve consolidation and optimize their offerings. Some of the major players in the market studied are PepsiCo, Red Bull GmbH, Coco-Cola, and Monster Beverage Corporation, among others.
Functional Beverages Market Leaders
PepsiCo, Inc.
Monster Beverage Corporation
Red Bull GmbH
National Beverage Corp
Koios Beverage Corp.
*Disclaimer: Major Players sorted in no particular order
Functional Beverages Market News
- In August 2022, As a new beverage in its n-fizz category, Coca-Cola India introduced Limca Sportz, a glucose and electrolyte-based beverage. Limca Sportz, which is water-based, helps to rehydrate athletes, exercisers, and those involved in high-intensity activities.
- In May 2022, Koios launched six brand-new flavors of its Fit Soda functional beverage. These flavors include Cherry Slushee, Strawberry Snow Cone, Mimosa, Pumpkin Spice, Sweet Tea Lemonade, and Blueberry Lemonade. This doubles the number of Fit Soda flavors currently available in the product portfolio.
- In March 2022, National Beverage Corp. launched its newest flavor, Cherry Blossom Sparkling Water. This flavor of LaCroix Cherry Blossom blooms with the bliss, fragrance, and calming essence of the cherry blossom flower.
Functional Beverages Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Deliverables and Study Assumptions
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Drivers
4.2 Market Restraints
4.3 Porter's Five Forces Analysis
4.3.1 Threat of New Entrants
4.3.2 Bargaining Power of Buyers/Consumers
4.3.3 Bargaining Power of Suppliers
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
5. MARKET SEGMENTATION
5.1 Type
5.1.1 Energy Drinks
5.1.2 Sports Drinks
5.1.3 Fortified Juice
5.1.4 Dairy and Dairy Alternative Beverage
5.1.5 Other Types
5.2 Distribution Channel
5.2.1 Supermarket/Hypermarket
5.2.2 Pharmacies/Health Stores
5.2.3 Convenience Stores
5.2.4 Online Retail Stores
5.2.5 Other Distribution Channels
5.3 Geography
5.3.1 North America
5.3.1.1 United States
5.3.1.2 Canada
5.3.1.3 Mexico
5.3.1.4 Rest of North America
5.3.2 Europe
5.3.2.1 United Kingdom
5.3.2.2 Germany
5.3.2.3 France
5.3.2.4 Russia
5.3.2.5 Italy
5.3.2.6 Spain
5.3.2.7 Rest of Europe
5.3.3 Asia-Pacific
5.3.3.1 India
5.3.3.2 China
5.3.3.3 Japan
5.3.3.4 Australia
5.3.3.5 Rest of Asia-Pacific
5.3.4 South America
5.3.4.1 Brazil
5.3.4.2 Argentina
5.3.4.3 Rest of South America
5.3.5 Middle-East and Africa
5.3.5.1 South Africa
5.3.5.2 Saudi Arabia
5.3.5.3 Rest of Middle-East and Africa
6. COMPETITIVE LANDSCAPE
6.1 Most Adopted Strategies
6.2 Market Share Analysis
6.3 Company Profiles
6.3.1 PepsiCo Inc.
6.3.2 Red Bull GmbH
6.3.3 National Beverage Corp
6.3.4 Danone SA
6.3.5 Monster Beverage Corporation
6.3.6 JAB Holdings Company
6.3.7 General Nutrition Centers Inc.
6.3.8 The Hain Celestial Group Inc.
6.3.9 Fonterra Co-operative Group
6.3.10 Koios Beverage Corp.
- *List Not Exhaustive
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
Functional Beverages Industry Segmentation
A functional beverage is a nonalcoholic drink that involves nontraditional ingredients such as minerals, vitamins, amino acids, dietary fibers (DFs), probiotics, and raw fruits, which not only provide basic nutritional value but also have other health benefits to the human body. The global functional beverage market is segmented by type, distribution channel, and geography. Based on type, the market is segmented into Energy Drinks, Sports Drinks, Fortified Juice, Dairy & Dairy Alternative Beverages, and Other Types. Based on the distribution channel, the market is segmented into Supermarkets/Hypermarkets, Drug Stores & Pharmacies, Convenience Stores, Online Retail Stores, and Other Distribution Channels. Based on geography, the market is segmented into North America, Europe, Asia-Pacific, South America, the Middle East, and Africa. For each segment, the market sizing and forecasts have been done based on value (in USD Million).
| Type | |
| Energy Drinks | |
| Sports Drinks | |
| Fortified Juice | |
| Dairy and Dairy Alternative Beverage | |
| Other Types |
| Distribution Channel | |
| Supermarket/Hypermarket | |
| Pharmacies/Health Stores | |
| Convenience Stores | |
| Online Retail Stores | |
| Other Distribution Channels |
| Geography | |||||||||
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Functional Beverages Market Research FAQs
How big is the Functional Beverage Market?
The Functional Beverage Market size is expected to reach USD 148.26 billion in 2023 and grow at a CAGR of 6.53% to reach USD 203.42 billion by 2028.
What is the current Functional Beverage Market size?
In 2023, the Functional Beverage Market size is expected to reach USD 148.26 billion.
Who are the key players in Functional Beverage Market?
PepsiCo, Inc., Monster Beverage Corporation, Red Bull GmbH, National Beverage Corp and Koios Beverage Corp. are the major companies operating in the Functional Beverage Market.
Which is the fastest growing region in Functional Beverage Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2023-2028).
Which region has the biggest share in Functional Beverage Market?
In 2023, the North America accounts for the largest market share in the Functional Beverage Market.
Functional Beverages Industry Report
Statistics for the 2023 Functional Beverages market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Functional Beverages analysis includes a market forecast outlook to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.
