Functional Beverages Market to Reach $145.15Bn, Globally, by 2028 at 7.8% CAGR with Energy Drinks Segment Driving Growth During 2021–2028 | The Insight Partners
The global functional beverages market is dominated by online retail segment. North America accounted for the largest shares which accounted for US$ 42.74 billion in 2021, And Asia Pacific is second major contributor holding more than 20% share in the global market. Key companies in the functional beverages industry include Danone SA, Monster Energy Company, The Coca-Cola Company, Campbell Soup Company, Nestle, General Mills, Red Bull, The Wonderful Company LLC, and PepsiCo.
Pune, India, Aug. 30, 2023 (GLOBE NEWSWIRE) — According to our latest study on “Functional Beverages Market Size Report, Forecast to 2028 – COVID-19 Impact and Global Analysis – by Product Type, Distribution Channel, and Geography,” the functional beverages market is expected to grow from $ 85.73 billion in 2021 to $ 145.15 billion by 2028; it is estimated to grow at a CAGR of 7.8% from 2021 to 2028. Rising health consciousness among consumers across the globe is one of the major factors driving the functional beverages market growth.
Functional Beverages Market: Competitive Landscape
The leading players in the functional beverages market include PepsiCo; The Coca-Cola Company; Nestle; General Mills; Campbell Soup Company; Ocean Spray Cranberries, Inc.; The Wonderful Company LLC; Danone SA; and Monster Beverage Corporation; among others. These players are launching innovative products to meet the rapidly emerging consumer trends. Moreover, they are also adopting merger & acquisition, partnerships, and joint venture strategies to expand their market share.
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Asia Pacific is projected to grow at the fastest CAGR in the global functional beverages market over the forecast period. Emerging countries in the region are witnessing a surge in health-conscious consumers, which will create demand for functional beverages, including energy beverages and fortified juices. The busy lifestyle of the growing urban middle-class population and the lack of nutritional ingredients in an individual’s diet are driving the functional beverages market growth. Moreover, as a result of the COVID-19 pandemic, the market across Asia-Pacific witnessed a surge in demand for healthy products that boost immunity. Therefore, manufacturers are incorporating various immunity-boosting and natural ingredients in their products to meet the specific requirements of consumers across the region. Moreover, the prominent manufacturers in the functional beverages market across Asia-Pacific are also lowering the sugar content in their products to target calorie-conscious consumers. For instance, companies such as PepsiCo and The Coca-Cola Company have pledged to eliminate artificial additives and lower the amount of sugar in their products. Therefore, such initiatives taken by manufacturers are likely to boost the demand for functional beverages over the coming years.
Hike in Demand for Plant-based Functional Beverages
People are increasingly focusing on cutting dairy products in their diet owing to the growing influence of veganism trend and increasing lactose-intolerant population. Moreover, they are preferring animal-free products owing to the rising awareness regarding animal protection and growing affiliation for animals. These factors have boosted the innovation in the functional beverages market. According to the International Food Information Council’s 2021 Food and Health Survey, more than four out of ten buyers believe plant-based alternatives are healthier even when two products have similar ingredients and provide similar nutritional benefits. Therefore, manufacturers are increasingly developing vegan-friendly, plant-based functional beverages to cater to the emerging consumer trends. These factors are further projected to drive the growth of functional beverages market share over the coming years.
Functional Beverages Market: Segmental Overview
Based on product type, the functional beverages market is segmented into energy beverages, sports beverages, fortified juices, functional water, and others. The fortified juices segment is projected to grow at a prominent rate over the forecast period. Fortified juices are enriched with nutrients such as minerals, probiotics, vitamins, prebiotics, and other ingredients. They provide high nutritional value and offer a functional property to the juice. Owing to the growing awareness regarding the health benefits of consuming fortified juices, the demand for fortified juices has grown significant over the past few years. The shifting inclination of consumers towards ready-to-drink and on-the-go beverages that offer functional benefits is also expected to fuel the demand for fortified juices during the forecast period.
Based on distribution channel, the functional beverages market is segmented into supermarkets & hypermarkets, convenience stores, online retail, and others. The convenience stores segment accounted for the largest share in the functional beverages market. However, the online retail segment is projected to grow at the highest CAGR over the forecast period. Convenience stores provide a large variety of products of different brands. Moreover, they are easy to reach since they are situated nearby the consumer localities. These factors primarily drive the growth of convenience stores. However, the online retail channels are gaining high consumer attention as they offer home delivery services and huge discounts. This provides convenience to the shoppers. Also, they offer a wide range of products of different brands and include customer reviews and ratings for the specific products which help the consumers in choosing right produt for them. These factors are significant driving the popularity of online retail segment.
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Impact of COVID-19 Pandemic on Functional Beverages Market
The COVID-19 pandemic brought unprecedented challenges across many sectors, such as the food & beverages, and nutraceuticals industries. Lockdowns, border restrictions, travel restrictions, manufacturing units’ shutdown, and other safety protocols imposed by governments negatively impacted the operations of manufacturing companies. Due to the raw material shortage, many functional beverages manufacturers suffered from short-term financial losses. There was a shortfall in the product supply due to supply chain disruptions and labor shortages. All these factors negatively impacted the functional beverages market. However, as the concerns related to health and fitness increased due to the outbreak, the demand for functional beverages increased dramatically as functional beverages offer specific health benefits that are beyond the regular daily intake of nutrients, such as improved bone health, cholesterol management, improved heart health, and other benefits associated with eye health and vision. Further, the manufacturers are increasing their production due to ease in the restrictions imposed by the government, thereby boosting the functional beverages market growth.
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