The food and beverage industry has in recent years been increasingly witnessing a rising demand for natural and functional ingredients, as health consciousness continues to rise among varied consumer demographics. This is a major factor that has been influencing the growth of the citrus products. The citrus pulp market continues to be lucrative, while demand for other citrus products, such as citrus water is on the rise.
As per a recent report released by Future Market Insights, the citrus water market is estimated to hit a US$ 6.7 billion valuations by the end of 2020. The industry is projected to reflect exponential growth through 2028, with widening flavor and nutritional profiles in new product offerings providing impetus to the market for years to come.
The global citrus water market has reflected very strong growth in recent years. The industry is likely to witness further acceleration in growth through the forecast period, in spite of the pandemic, as consumer preference towards functional beverages and investments in product development continue to rise.
Growing Demand for Natural Flavors and Fragrances
Taste and fragrance have always been fairly important in terms of food and beverage products. Citrus water is increasingly finding application as additives in food and beverage formulations including bakery confectionery, and juices as a flavor enhancer.
Citrus water is used to boost tangy flavors and aromas in products such as soups and sauces in addition to other culinary applications, which is expected to gain further attention as globalization trends bring international cuisines to new regions.
Also, citrus concentrates are expected to find niche applications in personal care products for fragrance characteristics. The trend is projected to positively impact the industry for the foreseeable future.
Diet Variants Gaining Traction
Diet variants of citrus water including sugar free options are rapidly becoming popular among consumers, which changes in consumer lifestyle and health awareness. As companies continue to invest in wider range of natural flavors, and zero and low-calorie products, the demand for citrus water is expected to rise as well.
Further, with increasingly hectic lifestyles, ease of availability in retail outlets, and growing awareness arising out of rapidly rising internet penetration, consumers are seeking health beverage options that do not compromise on taste, that are likely to drive demand in the near future.
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Waning Popularity of Carbonated Drinks
Conventional carbonated drinks, are facing the brunt of health concerns among consumers, in terms of weight gain, heart burn, and high caffeine content. Also, with the growing health and fitness sector, and distribution of citrus water through online channels, citrus water products are likely to find higher levels of adoption.
Non-alcoholic functional drinks including citrus fruit additions provide advantages to consumers in terms of health, beyond basic nutrition including cholesterol management, immunity boost, and potential to improve cardiac health and bone health.
Biodegradable Packaging Options Gain Preference
Plastic bottles and aluminum tins remain the most widely used packaging formats for citrus water.
As a result, the demand for bottled water has gone through a strong rise, supported by higher disposable incomes among urban populations. On the other hand, this demand has resulted in environmental concerns in terms of packaging. A number of governments have also imposed strict restrictions on the use of single use plastic, encouraging sustainable alternatives.
While aluminum cans are gaining attention, manufacturers are also seeking sustainable solutions for the bottle format of packaging, owing to higher convenience for consumers. Consequently, biodegradable polymeric material could provide potentially favorable opportunities for market players to leverage in the long term.
The citrus water market is estimated to reflect impressive growth in the years to come. However, market players are expected to face a number of challenges in the near term as these beverages become mainstream.
The cost of citrus water is relatively higher in comparison to other conventional beverages. This is expected to limit adoption of these products, especially among low income segments of consumers. Also, fluctuation of citrus fruit yields owing to environmental factor that could hurt market players.
Further, a substantial number of potential consumers remain skeptical about the efficacy of citrus water in terms of health benefits, and lack of definitive information on the same has compounded the issue. Also, with high competition from home-made citrus water is expected to hinder the scope of growth for the market in the years to come.
North America Citrus Water Market
Currently, North America is the leading market for citrus water at a valuation of US$ 2.5 billion, and is expected to account for more than 30% of the global market through the forecast period. High consumer awareness in Canada and the United States about the benefits of citrus water and the resultant demand are major factors bolstering the prospects of the industry in the region.
Furthermore, the presence of several leading international citrus water and RTD beverage manufacturers and frequent product launches, and innovations in formulations will sustain the healthy growth of the market in the long term.
States including Texas, Florida, and California are major producers of citrus fruits in the region. Despite a decline in production in 2019-20, major imports from regions in Asia and South Africa are expected to benefit the market in the near term.
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Europe Citrus Water Market
The European citrus water market is only second to North America in 2020. However, rising demand for functional beverages, especially among key countries in the European Union, coupled with adoption in the health and fitness sector is contributing to the massive 19% CAGR through the forecast period. Consequently, the European market is expected to surpass North America in value and volume in the near future.
Also, Europe, the largest market for citrus products, will also gain from sophisticated retail supply chains and the widespread penetration of specialty food and beverage stores. As a result, the consumption of citrus water has risen, particularly during the coronavirus pandemic as consumers seek natural solutions for nutrition and immunity function for the duration of the outbreak.
The European market is also likely influence increased production and consumption of citrus water in aluminum cans, which can be primarily attributed to the favorable government policies and investments towards recycling facilities in the region.
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Asia Pacific excluding Japan Citrus Water Market
The APEJ citrus water market is projected to witness strong growth through 2028. Rising penetration of the internet, sales through online channels, coupled with growing health awareness and per capita income in countries such as China and India are contributing substantially to the Asia Pacific excluding Japan market.
Further, the market is also expected to benefit from the growth of fitness, health and sports sector in internationally and domestically, generating major growth opportunities for manufacturers in emerging economies of China and India, growing at a rate second only to the European market with 18.7% CAGR.
Further, citrus water products are also finding roles as mixers for alcoholic beverages, as manufacturers focus on economy beverages gain ground in the region.
Premiumisation of Citrus Waters
Citrus water sales can largely be classified on the basis of pricing into 2 types - premium and economic. Of these options, the demand for economic variants remains slightly higher than premium products. On the other hand, this trend is expected to turn by the end of the forecast period, with premium citrus water reaching more than 56% of the global market share by 2028.
The growth of the premium segment is largely attributed to the increased incorporation of high quality, natural and organic citrus extracts, and popularity among a growing health conscious consumer demographic.
Preference Towards Lemon Citrus Water Products
Most citrus water manufacturers source citrus flavors in their offerings from 4 fruit types including lemons, limes, oranges, and also mixed citrus fruits. Lemon-based citrus waters are anticipated to witness relatively higher demand through the assessment period.
On the other hand, although holding a fairly small market share, mixed citrus waters are expected to reflect a higher growth rate, eating into the share of lemon-based variants throughout the forecasting period.
Plastic Bottle Packaging Remains Popular
Citrus waters are commonly packed in 3 formats, which are plastic bottles, glass bottles, and tins. According to FMI analysts, the market share for plastic bottle packaging will remain relatively higher through the forecast period. Convenience in terms of logistics and supply chains and ease of use of consumers will drive demand in the years ahead.
However, tins are projected to reflected faster growth for the foreseeable future, on the back of environmental concerns associated with plastic packaging, and easy recyclability of metal tins. Also, improvements in printing technology has made tins a popular choice in terms of aesthetics.
Specialty Stores Essential to Distribution
Key channels of distribution for citrus water manufacturers include modern trade, specialty stores, convenience stores, commercial, hotels/restaurants/bars, and online retail. Specialty stores are expected to account for majority share of sales and revenue accounting for an estimated 30.9% of the global market by 2028.
Although at a fairly nascent stage, online retailers are projected to display a significantly higher growth rate. The trend is not likely to change for the foreseeable future as internet penetration continues to rise at a rapid pace.
Key manufacturers in the citrus water market are increasingly focusing resources towards product development and launch strategies, aiming to expand the flavor portfolios of their offerings, attracting a wider consumer demographic. Also, manufacturers are pushing to optimize production capabilities through strategic acquisitions and expansions, keeping up with growing market demand.
Nestle S.A. for instance, under the Nestle Waters brand has unveiled its new additions to the range of ReadyRefresh beverages including coconut water, energy drinks, and citrus water offerings including blood orange and original citrus flavors. The company is also potentially seeking the sale of its North America Unit, choosing to focus its resources on other international markets.
The Coca Cola Company has also introduced its new offerings in the AHA sparkling water segment, largely aiming to improve on product differentiation strategies with niche flavors such as lime and watermelon, strawberry and cucumber, and citrus and green tea among others. These products are aimed towards consumers seeking sugar free beverage options.
Danone S.A. has partnered with Ball Corp to develop and produce its L’mon brand of sparkling beverages, in 3 citrus flavor combinations of grapefruit, lemon & orange, and lemon & lime, marketed in 330 ml cans. The offerings are free from synthetic colorings, preservatives, and flavors, for health-conscious consumers.
Aside from these manufacturers, other top participants in the market include:
- PepsiCo. Inc.
- Suntory Beverages & Food Ltd.
- Super bock Bebidas
- Icelandic Water Holdings ehf
- Mountain Valley Spring Company
- S&D Coffee & Tea
The list is only indicative – full list of citrus water market key players is available upon request.
Citrus Water Market Report: Scope
Historical Data Available for
US$ Million for value, Mn Liters for Volume
Key Regions Covered
North America, Latin America, Europe, Japan, Asia Pacific Excluding Japan, and Middle East & Africa (MEA)
Key Countries Covered
U.S., Canada, Brazil, Mexico, Chile, Argentina, Germany, U.K., Russia, France, Italy, Japan, China, India, ASEAN, Australia, New Zealand, GCC Countries, South Africa, North Africa
Key Segments Covered
Product Type, Source, Packaging Format, Distribution Channel, and Region
Key Companies Profiled
Danone S.A., Nestle S.A., The Coca Cola Company, PepsiCo Inc., Suntory Beverages & Food Ltd., Super Bock Bebidas, Icelandic Water Holdings ehf, Mountain Valley Spring Company, S&D Coffee & Tea (only indicative list)
Market Forecast, brand share analysis, competition intelligence, DROT analysis, Market Dynamics and Challenges, Strategic Growth Initiatives
Customization & Pricing
Key Questions Answered by the Report
- What is the size of the citrus water market?
The global citrus water market reached a valuation of US$ 5.8 billion in 2019. The citrus water market is projected reflect an exponential 17.1% CAGR between 2020 and 2028.
- Which is the largest market for Citrus water?
North America is currently the largest market for citrus water, driven by the presence of leading market players, particularly in the United States.
- Which are the top companies in global citrus water market?
Danone S.A., Nestle S.A., The Coca Cola Company, PepsiCo Inc., Suntory Beverages & Food Ltd., Super Bock Bebidas, Icelandic Water Holdings ehf, and Mountain Valley Spring Company, are among the more prominent citrus water market players.
- What Sources are Used to Produce Citrus Water?
Citrus water products are largely derived from fruits such as lemons, limes, oranges, grapefruits, or a mixture. Lemon-based citrus water is expected to witness higher demand.
- What packaging formats are popular for citrus water products?
Companies manufacture citrus water products extensively with 3 types of packaging – glass bottles, tins, and plastic bottles. The demand for citrus water in plastic bottles will remain relatively higher owing to cost and convenience benefits.
- What is the outlook of Europe in the Citrus water market?
The European citrus water market is reflecting relatively faster growth on the back of rising demand for natural, functional beverages in the region. Europe is likely to surpass North America to become the largest regional citrus water market by the end of the forecast period.
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- Glass Bottles
- Plastic Bottles
- Modern Trade
- Specialty Stores
- Convenience Stores
- Commercial Market
- Online Retailers
- North America (U.S., Canada)
- Latin America (Brazil, Mexico, Chile, Argentina, and Rest of LATAM)
- Europe (Germany, U.K., Russia, France, Italy, Rest of Europe)
- Asia Pacific excluding Japan (China, India, ASEAN, Australia & New Zealand, and Rest of APEJ)
- Middle East & Africa (GCC Countries, South Africa, North Africa, Rest of MEA)