Global Functional Beverages Market Analysis

North America is the largest market for functional beverages as it contains innovative varieties of drinks that are customized for all age groups and strata. Asia-Pacific and Europe come in second and third places respectively. Future growth will be witnessed in the emerging economies of Asia-Pacific and Middle East. Growing health concerns and changing lifestyles in various regions of the world are some of the major drivers of an inflated demand for functional beverages. Increasing number of health-conscious people in both developed and developing nations form the growth engine for functional beverages.

Production and marketing of functional beverages depend highly on the region of business, as choices vary considerably in taste, colour and size across the globe. For instance in Japan, “energy shots”, i.e., small packs of nutrient-loaded drink packs are staple whereas in countries like India and China, large value packs are in trend. Today, almost all flavours and ingredients are available due to advancement in ingredient and premix formulations.

Advancement in product development practices coupled with technology upgradations would drive the market for functional beverages in the forecast period. Ingredient formulation technologies such as micro-encapsulation and particle size reduction techniques have widened product offerings by manufacturers. Development of various ingredients to mask the unpleasant taste of certain amino acids and omega-3 fatty acids has revolutionized the market for functional beverages. Thus, the market is poised to grow at a brisk CAGR between 2014 and 2020.

Innovation is the key to success in the beverage industry. Utilizing ingredients such as natural food/beverage colours, low-calorie natural sweeteners and kosher ingredients are in vogue. Manufacturers are constantly embracing open innovation to gain cost-leadership and fixed suppliers in early development stage. One of the major advantages of a functional beverage is that consumers are ready to pay a premium price for its various functional advantages. Manufacturers and retailers market these drinks in several ways to attract different strata of consumers. For instance, ready-to-drink tea and fruit/vegetable juices are targeted towards obese people who are looking to lose weight. Retailers, as well as wellness centres, play an important role in promoting these products.

The market is largely fragmented as the categories differ significantly in the functional beverages market. Some of the key players in this industry are PepsiCo, Inc., Nestlé, Kraft Foods, General Mills, Campbell Soup Co., Monster Beverage Corporation, The Coca-Cola Company and Red Bull GmbH among others. A few major ingredient suppliers are Archer Daniels Midland Co., DuPont Nutrition & Health, LycoRed Ltd., Fortitech, Inc., BASF and Nutratech, Inc.

This research report presents a comprehensive assessment of the functional beverages market and contains thoughtful insights, facts, historical data, and statistically supported and industry validated market data and projections with a suitable set of assumptions and methodology. It provides analysis and information by categories such as type, ingredients used, distribution channels and geographies.

The report is a compilation of first-hand information, qualitative and quantitative assessment by industry analysts, inputs from industry experts and industry participants across the value chain. It provides an in-depth analysis of parent market trends, macro-economic indicators and governing factors along with market attractiveness as per segments. The report also maps the qualitative impact of various market factors on market segments and geographies.