A Functional Beverage is a non-alcoholic drink product. It contains essential nutrients and bioactive compounds, including minerals, vitamins, antioxidants, amino acids, herbs, raw fruits, or vegetables. They help boost the immune system and improve the physical and mental health of the body. These beverages include energy drinks, dairy beverages, ready-to-drink tea and coffee, sports drinks, plant milk, fortified fruit drinks, and enhanced water. The functional beverages market is valued at USD 118.7 Bn in 2021, and it is expected to reach USD 265.9 Bn by 2030, with a CAGR of 9.38% during the period 2021-2030. By region, North America controlled the global market with a share of 42 % in 2021.
The rising health awareness among the population and heavy investments by significant food and beverage companies are the primary driver of the functional beverage market. Additionally, the advances in scientific research, low consumption of convenience foods, rising demand for sports & performance drinks, availability of wide varieties of energy drinks and fruit juices, easy product distribution and storage, increasing consciousness about fitness and diets, and changing lifestyle patterns further increasing the demand for functional beverage products, thereby driving the market growth. Consumers' preference is shifting toward more healthy and nutritious food and drink products due to the increasing awareness about fitness, diet, and health. So, the manufacturers are focusing more on research and development of new products, such as vegan, probiotic, and plant-based drinks. Such advances in beverage products are expected to enhance the global functional beverage market over the forecast years (2020-2030). Furthermore, the current COVID-19 outbreak has accelerated the demand for functional beverages that support the immune system.
On the other hand, food safety problems, strict government regulations, and a lack of awareness about the benefits of functional beverages are expected to restrain the market growth over the forecast period. The functional beverages market is segmented into products, functions, distribution channels, and region. The products segment is classified into energy drinks, sports drinks, cannabis-infused beverages, kombucha, non-alcoholic aperitif, nutraceutical drinks, functional fruit and vegetable juices, enhanced water, dairy-based beverages, and other products. The energy drinks segment is expected to hold the largest share of the global market over the forecast years due to the increasing demand for energy beverages. The sports drinks segment is also growing pidly due to the rising awareness about fitness.
By Functions, the market is divided into health & wellness and weight management. By distribution channel, the market is grouped into convenience stores, online retail, pharmacies, and supermarket/hypermarket. The online retail segment dominated the functional beverages market in 2020 and is expected to continue the trend over the forecast period due to the increasing customer preference towards online shopping. Regionally, the market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. North America region is anticipated to dominate this market over the forecast years.
Some of the key players operating in the functional beverages market are Archer Daniels Midland Company (US) , Arla foods (Denmark), Æcorn Aperitifs (UK), Campbell Soup Co. (US), Clif Bar & Company (US), Danone S.A. (France), DuPont Nutrition & Health (Denmark), Fonterra Co-operative Group Limited (New Zealand), General Mills, Inc. (US), Glanbia PLC, Kraft Foods Group, Inc. (Ireland), LycoRed Ltd. (Israel), Monster Energy Company (US), Dr. Pepper SnappleGroup (US), National Beverage Corp (US), Nestlé S.A. (Switzerland), PepsiCo, Inc. (US), Red Bull Gmbh (Austria), Suntory Holdings Limited (Japan), Tata Global Beverages (Bengaluru), The Coca-Cola Company (US), The Kraft Foods Group (US), Thomson &Scott Ltd. (UK), Seedlip (Australia), Domaines Pierre Chavin (France), and others.