Functional Beverages Market Growth, Size, Share | 2028

Functional Beverages Market Forecast to 2028 - COVID-19 Impact and Global Analysis By Product Type (Energy Drinks, Sports Drinks, Fortified Juices, Functional Water, and Others) and Distribution Channel (Supermarkets & Hypermarkets, Convenience Stores, Online Retail, and Others)

Publication Month : Mar 2022

  • Report Code : TIPRE00028382
  • Category : Food and Beverages
  • Status : Published
  • No. of Pages : 135
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[Research Report] The functional beverages market is projected to reach US$ 145,146.05 million by 2028 from US$ million 85,728.85 in 2021; it is expected to grow at a CAGR of 7.8% from 2021 to 2028.

Market Insights and Analyst View:

Functional beverages are a sub-part of the non-alcoholic beverages industry. Functional beverages contain minerals, vitamins, amino acids, dietary fibers, and probiotics that enhance the overall physical state of the human body and reduce the risk of disease progression. Functional beverages act as an instant energy source and are usually consumed by sportspersons and athletes. The increased participation of people in sports and fitness activities has also fueled the demand for functional beverages as they help in improving athletic performance.

Growth Drivers and Challenges:

Over the past few years, awareness regarding health and nutrition has increased significantly. Because of hectic work schedules and extended working hours, people cannot concentrate on their health and fitness, leading to various health issues such as obesity, diabetes, eye problems, skin problems, etc. Therefore, people increasingly prefer food and beverages which offer nutritional health benefits. People are altering their dietary habits and including nutrient-enriched food and beverages. The increased participation of people in sports and fitness activities has also fueled the demand for functional beverages as they help in improving athletic performance. Moreover, the vegan trend is rapidly evolving across the global market, which has compelled various manufacturers of functional beverages to develop plant-based alternatives. These factors are expected to drive the global functional beverages market growth.

Moreover, sports beverages are gaining popularity among athletes and other individuals involved in energetic physical activities. The millennial generation exponentially fuels the demand for sports beverages due to its high buying capacity, willingness to pay for health products, acute interest in sports, and growing inclination toward fitness activities. Thus, the growing demand for sports beverages further drives the global functional beverages market share. However, the high cost associated with functional beverages hamper the global market growth.

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Functional Beverages Market: Strategic Insights

functional-beverages-market
Market Size Value inUS$ 85,728.85 million in 2021
Market Size Value byUS$ 145,146.05 million by 2028
Growth rateCAGR of 7.8% from 2021 to 2028.
Forecast Period2021- 2028
Base Year2021
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Shejal

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Report Segmentation and Scope:

The “Global Functional Beverages Market” is segmented based on type, distribution channel, and geography. Based on type, the market is categorized into energy beverages, sports beverages, fortified juices, functional water, and others. Based on the distribution channel, the functional beverages market is segmented into supermarkets & hypermarkets, convenience stores, online retail, and others. The functional beverages market based on geography is segmented into North America (US, Canada, and Mexico), Europe (Germany, France, Italy, UK, Russia, and Rest of Europe), Asia Pacific (Australia, China, Japan, India, South Korea, and Rest of Asia Pacific), Middle East & Africa (South Africa, Saudi Arabia, UAE, and Rest of Middle East & Africa), and South & Central America (Brazil, Argentina, and Rest of South & Central America)

Segmental Analysis

Drinks Based on type, the functional beverages market is segmented into energy beverages, sports beverages, fortified juices, functional water, and others. The energy beverages segment is significant globally, contributing to the rising functional beverages market share. The marketing of energy beverages has been mainly directed toward teenagers. Manufacturers are marketing their brands, such as Red Bull and Monster, by saying their product "gives you wings," or "scientifically formulated," or is a "killer energy brew." Also, they are targeting the youth audience through social media channels. Such marketing strategies are further expected to create functional drink market trends and boost the demand for energy beverages.

Moreover, based on distribution channels, the convenience stores segment is growing significantly. They have many products, including carbonated beverages, non-carbonated beverages, soft beverages, and other beverages from different brands. Customers may prefer these stores to buy functional beverages for ease and convenience. The segment is growing significantly due to greater availability and exposure to products resulting from increased awareness of the health implications associated with functional beverages.

Regional Analysis:

Based on geography, the functional beverages market is divided into five key regions: North America, Europe, Asia Pacific, South & Central America, and Middle East & Africa. The global functional beverages market was dominated by North America, which accounted for US$ 42,744 million in 2021. Asia Pacific is second major contributor holding more than 20% share in the global market.  Additionally, Europe is expected to grow considerably at a CAGR of 7.9% over the forecast period. The growing number of health- and fitness-conscious individuals in North America has increased the demand for functional products, impacting all menu elements; the beverage category holds the biggest opportunity for flavor innovation.  Also, the popularity of zero-calorie, zero-sugar, and low-carb soft beverages and plant-based beverages is growing across the region, increasing the functional beverages market growth. Moreover, the rising vegan population and veganism are boosting the demand for plant-based functional beverages, such as plant-based milk. The above-mentioned factors are boosting the demand of functional beverages and are further expected to propel the functional beverages market size in the future.

Moreover, the demand for energy beverages and sports beverages is rising from the younger population of Europe. According to Eurostat, ~65% of the population in Europe ranges from 15 to 64 years. The changing lifestyle of consumers with hectic lifestyles makes energy beverages more popular among this age group. There has been an increase in the party culture in the younger population, which has made the usage of energy beverages prevalent as a functional drink.

Industry Developments and Future Opportunities:

Various initiatives taken by the key players operating in the functional beverages market are listed below:

  1. In 2020, PepsiCo, Inc. enlisted an agreement to acquire Rockstar Energy Beverages, an energy drink manufacturer company in the US, for US$ 3.85 billion. This acquisition focused on extending the existing product portfolio of PepsiCo’s functional beverages.
  2. In February 2021 (a US-based company), Good Sports, launched its natural sports drink, which possesses three times the electrolytes and 33% less sugar than traditional sports beverages.
  3. In October 2020, Sanitarium, one of the leading Australia-based health and nutrition company, launched a dairy-free, gluten-free, and vegan-friendly breakfast drink under the brand name UP&GO. The product is made using soy milk enriched with protein, fiber, and calcium and has a low glycemic index.

Covid-19 Impact:

The COVID-19 pandemic affected almost all industries in various countries. Lockdowns, travel restrictions, and business shutdowns in North America, Europe, Asia Pacific (APAC), South & Central America (SAM), and the Middle East & Africa (MEA) hampered the growth of several industries, including the food & beverages industry. The shutdown of manufacturing units disturbed global supply chains, manufacturing activities, delivery schedules, and essential and nonessential product sales. Various companies witnessed delays in product deliveries and a slump in sales of their products in 2020. Before the onset of the COVID-19 outbreak, the functional beverages market was mainly driven by the rising demand for products that support digestive and immune health.

Further, the COVID-19 pandemic positively impacted the functional beverages market as consumers gravitated toward immunity-boosting and nutritious products as the number of COVID-19 patients increased. The nutritional value of functional beverages is high, which stimulates demand during the pandemic. This factor provided a substantial growth opportunity for the functional beverages market during the pandemic.

Competitive Landscape and Key Companies:

Top 10 companies operating in the global functional beverages market include PepsiCo; The Coca-Cola Company; Nestlé; The Kraft Heinz Company; GENERAL MILLS, INC.; Danone S.A.; Monster Energy Company; Red Bull; CAMPBELL SOUP COMPANY; and The Wonderful Company LLC. among others. These players offer functional beverages with innovative features to attract a large number of consumers.  

Report Coverage
Report Coverage

Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends

Segment Covered
Segment Covered

Product Type and Distribution Channel

Regional Scope
Regional Scope

North America, Europe, Asia Pacific, Middle East & Africa, South & Central America

Country Scope
Country Scope

Argentina, Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Russian Federation, Saudi Arabia, South Africa, South Korea, United Arab Emirates, United Kingdom, United States

Frequently Asked Questions


Based on distribution channel, which is the fastest growing segment in the functional beverages market?

Based on distribution channel, the online retail is the fastest growing segment due to its shopping and product delivery convenience. Online retail stores offer a wide variety of products with heavy discounts; also, consumers can conveniently buy desirable products remotely.

What are the key drivers for the growth of the global functional beverages market?

Surging demand for beverages with functional benefits and increasing healthcare expenditure are some of the key driving factors for functional beverages market.

What is the largest region of the global functional beverages market?

North America accounted for the largest share of the global functional beverages market. Consumers looking for healthier alternatives in food & beverages to boost immunity were alarmed by the impact of COVID-19. The nutritional value of the functional beverage is high, which stimulated its demand.

Can you list some of the major players operating in the global functional beverages market?

The major players operating in the global functional beverages market are PepsiCo; The Coca-Cola Company; Nestlé; KRAFT Foods; GENERAL MILLS, INC.; Danone S.A.; Monster Energy Company; Red Bull; CAMPBELL SOUP COMPANY; The Wonderful Company LLC.

What are the opportunities for functional beverages in the global market?

Hike in demand for plant-based functional beverages owing to its health benefits and nutritional properties is a major factor projected to offer lucrative growth opportunities to the functional beverage market over the forecast period

Based on type, why does the energy drink segment have largest revenue share?

Based on type, the energy drink segment accounted for the largest revenue share because of growing health consciousness among consumers and energy drinks are widely consumed by adolescents due to their claims of improving performance, endurance, and alertness.

The List of Companies - Functional Beverages Market

  1. PepsiCo      
  2. The Coca-Cola Company   
  3. Nestlé         
  4. KRAFT Foods          
  5. GENERAL MILLS, INC.       
  6. Danone S.A.          
  7. Monster Energy Company            
  8. Red Bull       
  9. CAMPBELL SOUP COMPANY          
  10. The Wonderful Company LLC.

The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.

  1. Data Collection and Secondary Research:

As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.

Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.

  1. Primary Research:

The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.

For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.

A typical research interview fulfils the following functions:

  • Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
  • Validates and strengthens in-house secondary research findings
  • Develops the analysis team’s expertise and market understanding

Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:

  • Industry participants: VPs, business development managers, market intelligence managers and national sales managers
  • Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.

Below is the breakup of our primary respondents by company, designation, and region:

Research Methodology

Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.

  1. Data Analysis:

Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.

  • 3.1 Macro-Economic Factor Analysis:

We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.

  • 3.2 Country Level Data:

Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.

  • 3.3 Company Profile:

The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.

  • 3.4 Developing Base Number:

Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.

  1. Data Triangulation and Final Review:

The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.

We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.

We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.

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