Functional Beverages Market Size, Share, Trends, Growth 2030

Functional Beverages Industry Prospective:

The global Functional Beverages market size was worth around USD 175.5 billion in 2022 and is predicted to grow to around USD 339.6 billion by 2030 with a compound annual growth rate (CAGR) of roughly 8.6% between 2023 and 2030.

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Functional Beverages Market: Overview

Functional beverages are a type of drink that provides unique health advantages owing to the addition of functional ingredients. These beverages are designed to refresh customers while also addressing areas such as energy, immunity, digestion, and mental concentration. They include vitamin and caffeine-fortified energy beverages, probiotic-rich kombuchas for digestive health, and antioxidant-rich fruit juices. They may contain herbs, vitamins, minerals, amino acids, or probiotics, each of which is intended to fulfil a specific function. As a result, it's gaining popularity among health-conscious customers.

Key Insights

• As per the analysis shared by our research analyst, the global Functional Beverages market is estimated to grow annually at a CAGR of around 8.6% over the forecast period (2023-2030).
• In terms of revenue, the global Functional Beverages market size was valued at around USD 175.5 billion in 2022 and is projected to reach USD 339.6 billion, by 2030.
• The growing consumer awareness is expected to propel the Functional Beverages market over the forecast period.
• Based on the type, the Energy Drinks segment is expected to dominate the market over the projected period.
• Based on the distribution channel, the E-Commerce segment is expected to grow at the highest CAGR during the forecast period.
• Based on the end user, the Fitness Lifestyle Users segment is expected to grow substantially over the forecast period.
• Based on region, North America is expected to dominate the Functional Beverages market over the projected period.

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Functional Beverages Market: Growth Drivers

The growing demand for nutritional beverages among older people drives market growth

The increased product demand among older people is driving the market. Furthermore, changing consumer tastes and increased awareness of the benefits of nutrition and general well-being are fueling market expansion. Beverages enriched with vitamins, minerals, antioxidants, and other health-promoting compounds are also impacting market growth.

Furthermore, the older population is actively pursuing beverages that provide concrete health advantages, such as improved joint health, improved cognitive function, and greater energy levels, constituting possibly another important growth factor. Aside from that, the recent emergence of the coronavirus illness (COVID-19) pandemic has increased product demand. Furthermore, people are focused on increasing their immune health by drinking beverages made with immune-boosting substances such as zinc, herbal extracts, and vitamins C and D.

Functional Beverages Market: Restraints

Rising concerns about obesity hamper market growth

When it comes to health and fitness, consumers' biggest concern is weight control. To maintain weight control, consumers need food and drinks that are low in calories and sugar. Fruit juices and energy drinks are the main sources of added sugar in functional beverages. The average energy drink can have roughly 26.5 grams of added sugar; big cans have twice as much. In addition, there is a substantial quantity of fat, carbohydrate, caffeine, and artificial sweeteners in energy drinks. For this reason, a lot of individuals steer clear of functional beverages.

According to research by the American Academy of Pediatrics (APP), consumers who engage in intense training in hot and muggy weather should only sometimes take a small number of sports drinks. Excessive consumption can lead to serious health problems including obesity and weight increase, among other things. During the projected period, these issues might hinder the functional beverages industry expansion.

Functional Beverages Market: Opportunities

The increasing acceptance of premiumization offers a lucrative opportunity for market growth

Customers looking for beverages that offer additional health advantages are driving the functional beverages market. Premiumization also describes the rising demand for inventive, health-conscious, and premium drinks, which has an impact on market expansion. Products with distinctive formulas, organic components, and practical advantages like increased energy, immune system support, or stress reduction might command a higher price from customers.

Furthermore, products that support customers' objectives for wellbeing and health are given priority. Another significant growth-inducing element is the expanding middle-class families' ability to explore luxury beverage alternatives due to their increased disposable money. In addition, the growth of e-commerce facilitated customers' discovery and acquisition of upscale, specialty beverages, hence quickening the pace of product acceptance.

Functional Beverages Market: Challenges

The availability of better alternatives poses a major challenge to market growth

The risk of replacement in an industry affects the competitive environment that businesses in that industry face as well as their ability to achieve productivity. The presence of a replacement risk affects an industry's profitability because consumers have the option to choose the alternative over the brand's product. The availability of near replacements can escalate the seriousness of an industry and reduce the potential benefits for the businesses involved. Thus, posing a serious challenge for the functional beverages industry.

Functional Beverages Market: Segmentation

The Global Functional Beverages industry is segmented based on the type, distribution channel, end-user, and region.

Based on the type, the global Functional Beverages market is bifurcated into Sports drinks, Energy Drinks, Juices, Dairy-based beverages and Others. The Energy Drinks segment is expected to dominate the market over the projected period. The two primary components of energy drinks are taurine, which is essential for the growth of skeletal muscle and cardiovascular health, and caffeine, which serves as a stimulant. Because of their high caffeine level, energy drinks are the most popular functional drink type in developed economies like the United States and Canada, whereas sports drinks are more popular in developing countries since physical activity and sports are becoming more and more popular.

Based on the distribution channel, the global Functional Beverages industry is categorized into Specialty Stores, Supermarkets and Hypermarkets, E-Commerce, and Others. The E-Commerce segment is expected to grow at the highest CAGR during the forecast period. Growing internet coverage in rural regions and a high rate of online shopping adoption among younger and working consumers are the reasons driving the growth of the category.

Based on the end-user, the global Functional Beverages market is categorized into Fitness Lifestyle Users, Athletes, and Others. The Fitness Lifestyle Users segment is expected to grow substantially over the forecast period. Fitness lifestyle consumers are a growing segment of the health and fitness conscious population, consisting of those who view physical fitness and athletic performance as integral components of their everyday lives. There will probably be a rise in the number of people adopting fitness lifestyles due to growing health concerns and an understanding of the advantages of regular exercise and yoga. Additionally, the growing number of obese people and the rising enrollment in health and fitness centers are anticipated to bolster the market expansion for functional beverages within the fitness lifestyle user’s sector.

Functional Beverages Market: Report Scope

Regional Analysis

North America is expected to dominate the Functional Beverages market over the projected period

North America is expected to dominate the market during the forecast period. Even while customer preferences for more natural ingredients are growing, the North American product industry is still largely untouched by these shifts in consumer opinion. In addition, a rise in demand from athletes and young adults is fueling the market expansion in this area.

Additionally, athletes and those who follow a fitness lifestyle benefit from functional beverages like sports and energy drinks, which increase their performance and stamina. This increases demand for dairy-based beverages and sports drinks. Thus, it is anticipated that each of these factors will support the expansion of the functional beverage market in this area. Leading sports and energy functional beverage firms including Monster Beverage Corp., Red Bull GmbH, and Dr Pepper Snapple Group Inc. are responsible for the product market's rise in North America.

Functional Beverages Market: Competitive Analysis

The global Functional Beverages market is dominated by players like:

• Nutratech Inc.
• Red Bull GmbH
• Nestlé
• PepsiCo Inc.
• Kraft Foods
• General Mills
• Cadbury Schweppes
• Campbell Soup Co.
• Monster Beverage Corporation
• The Coca-Cola Company
• Archer Daniels Midland Co.
• DuPont Nutrition & Health
• LycoRed Ltd.
• Fortitech Inc.
• BASF SE
• Maxinutrition
• Glanbia
• Clif Bar & Company
• Universal Nutrition
• Dr Pepper Snapple Group Inc.
• Groupe Danone
• Tata Tea
• GSK
• RushNet
• Jivita LLC
• Taut
• Old Orchard Brands
• Energy69

The global Functional Beverages market is segmented as follows:

By Type

• Sports drinks
• Energy Drinks
• Juices
• Dairy-based beverages
• Others

By Distribution Channel

• Specialty Stores
• Supermarket and Hypermarket
• E-Commerce
• Others

By End-User

• Fitness Lifestyle Users
• Athletes
• Others

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa