Functional Beverages Market Size was valued at USD 149.20 billion in 2023. The functional beverages industry is projected to grow from USD 153.30 Billion in 2024 to USD 232.84 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 5.36% during the forecast period (2024 - 2032). Health benefits of functional beverages and the creation of new products are the key market drivers enhancing the market growth.
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Increased consumer interest in healthy lifestyles and an increase in the number of exercise enthusiasts are anticipated to be the primary growth drivers of the functional beverage market. The number of athletes is projected to rise as more people participate in sports on a national and international level, which would subsequently speed up market growth for functional beverages. Due to the rising number of casual consumers of sports and energy drinks, functional beverage processing firms are introducing beverages with reduced calories and fats as well as flavoring additions from fruits and vegetables to appeal to refined taste. Those that use functional beverages on a casual basis do so for amusement. Furthermore, a key factor in the market expansion for functional beverages is the distribution channel. As a result, specialized shops, supermarkets, and hypermarkets all contribute significantly to the market's CAGR.
The risk of using energy drinks and the availability of healthy alternatives are projected to restrain the growth of the functional beverage market throughout the course of the research year. For instance, the significant health risks linked to consuming energy drinks are mostly connected to their caffeine level. Caffeine overdose can result in hypertension, palpitations, dieresis nausea, excitation of the central nervous system, and vomiting. Thus, driving the functional beverages market revenue.
Functional beverages are a brand-new concept and product that address food and beverage shortages and are distributed widely through the retail sector. In developing nations, there are an increasingly significant number of supermarkets, hypermarkets, and specialty shops, which makes functional beverages simpler to find and encourages the sales of function beverage products.
However, as people become more aware of the benefits of healthy diets and lifestyles, there is a growing demand for functional beverages, which is driving the market's expansion. Also, businesses are putting more of an emphasis on energy drinks that raise immunity to fight infection. Also, a news report from Outlook India claims that in July 2020, the demand for energy drinks rose as a result of their immunity-boosting qualities.
The functional beverages market segmentation, based on type, includes energy drinks and sports drinks. The energy drinks market accounted for 25.8% of the total in 2022, making it the largest component of the market of functional beverages categorized by type. Going forward, the energy drinks category is predicted to be the fastest expanding segment in the functional beverages industry categorized by type, increasing at a CAGR between 2022 and 2030.
Figure 2: Functional Beverages Market, by type, 2022 & 2030 (USD billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
The functional beverage market is anticipated to be dominated by the store-based distribution channel, while the e-commerce sector is anticipated to grow at the greatest CAGR over the course of the forecast period. This market's tremendous expansion is attributable to a number of elements, including the availability of a large selection of products at online shops, with significant discounts, and home delivery services.
The functional beverages market was segmented by function, with the health and wellness market making up the largest portion of that market. Moving forward, it is anticipated that the market of functional beverages will be further divided by function, with the CAGR for that period of time being between 2022 and 2030. Health-conscious consumers' growing numbers and the need for clean-label and non-GMO food goods, among other things, are credited with this segment's substantial market share.
By Region, the study provides the market insights into North America, Europe, Asia-Pacific and Rest of the World. In 2022, European functional beverage will have the highest share of the worldwide market. In the coming years, the European market is likely to rise at a much higher rate. The well-established packaged drinks sector, strong knowledge of the health benefits of functional beverages, and high demand for healthy drinks across the region all contribute to this region's considerable market share.
Further, the major countries studied in the market report are The U.S., Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
Figure 3: FUNCTIONAL BEVERAGES MARKET SHARE BY REGION 2022 (%)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
North American functional beverage has been the market's second largest region, and the Functional Beverages Market Forecast is expected to change. A significant number of manufacturers' offering of functional beverages, paired with beautiful packaging that attracts new customers, can assist drive the industry and grow the Functional Beverages industry Size. Further, the US functional beverages held the largest market share, and the Canada market of functional beverages was the fastest growing market in the North American region
The Asia-Pacific Functional Beverages Market is predicted to grow rapidly during the forecast period, owing to increased consumer awareness of health issues and, as a result, an increase in their preference for functional beverages. Because of Asian consumers' changing lifestyles, convenience beverages are in high demand, resulting in steady growth in sales of fortified/functional plant-based, malt-based hot drinks, and functional energy drinks. Moreover, China’s market of functional beverages held the largest market share, and the Indian functional beverages industry was the fastest growing market in the Asia-Pacific region
Leading industry companies are investing heavily in R&D to expand their product lines, which will aid in the growth of the functional beverages market. Key market developments include new product releases, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other companies. To expand and thrive in an increasingly competitive and rising market climate, competitors in the functional beverage business must offer cost-effective items.
Manufacturing locally to cut operational costs is one of the main business methods used by manufacturers in the functional beverage industry to benefit customers and increase the market sector. The functional beverage business has recently given medicine some of the most important advantages. Major players in the functional beverage industry including Nestle S.A. (Switzerland), The Coca-Cola Corporation (U.S.), PepsiCo Inc. (U.S.), Halen Brands Inc. (U.S.), Fonterra Co-operative Group Ltd. (New Zealand), and others are attempting to increase market demand by funding R&D initiatives.
Barry Callebaut is a Belgian-Swiss cocoa processor and chocolate producer with an annual production of 2.3 million tonnes of cocoa and chocolate (fiscal year 2021/2022). It was founded in 1996 as a result of the merger of the Belgian chocolate manufacturer Callebaut with the French company Cacao Barry. It is currently headquartered in Zürich, Switzerland, and operates in over 30 countries around the world. Klaus Johann Jacobs designed it in its current form. In October 2021, Barry Callebaut introduced another better-for-you drink mix comprised of 100 percent cacao natural product that will be available for makers to utilize in a variety of beverages. This is the most advanced item to result from Barry Callebaut's emphasis on employing the complete cocoa organic product in goods.
Coca-Cola, also known as Coke, is a carbonated soft drink produced by the Coca-Cola Company. Coke products were distributed in over 200 countries around the world in 2013, with consumers drinking more than 1.8 billion corporate beverage servings per day. Coca-Cola was rated No. 87 on the 2018 Fortune 500 ranking of the largest firms in the United States by total revenue. According to Interbrand's 2020 "best brand" study, Coca-Cola was the world's sixth most valuable brand. In April 2019, The Coca-Cola Corporation announced the launch of 'Aquarius,' a low-calorie collection of delicious and functional drinks. The product claims to include important minerals and comes in two flavors: lime with magnesium and lemon with zinc.
Functional Beverages Industry Developments
In August 2022 Coca-Cola India released Limca Sportz as a new beverage in their n-fizz category. This beverage is made of glucose and electrolytes. Water-based Limca Sportz, which is used to rehydrate athletes, exercisers, and anyone engaged in strenuous activities.
In May 2022 Koios introduced six brand-new flavors of its functional beverage Fit Soda. These flavors include Blueberry Lemonade, Cherry Slushee, Mimosa, Strawberry Snow Cone, Sweet Tea Lemonade, and Pumpkin Spice. The product assortment now offers twice as many flavors of Fit Soda as before.
In March 2022 National Beverage Inc. introduced Cherry Blossom Sparkling Water as its newest flavor. The joy, aroma, and relaxing essence of the cherry blossom flower unfold in this LaCroix Cherry Blossom taste.
| Report Attribute/Metric | Details |
| Market Size 2023 | USD 149.20 billion |
| Market Size 2024 | USD 153.30 billion |
| Market Size 2032 | USD 232.84 billion |
| Compound Annual Growth Rate (CAGR) | 5.36% (2024-2030) |
| Base Year | 2023 |
| Market Forecast Period | 2024-2032 |
| Historical Data | 2019- 2021 |
| Market Forecast Units | Value (USD Billion) |
| Report Coverage | Revenue Forecast, Market Competitive Landscape, Growth Factors, and Trends |
| Segments Covered | By Type, By Distribution Channel, By Function, and Region |
| Geographies Covered | North America, Europe, Asia Pacific, and the Rest of the World |
| Countries Covered | The U.S, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil |
| Key Companies Profiled | Nestle S.A.(Switzerland), The Coca-Cola Company (U.S.), PepsiCo Inc. (U.S.), Halen Brands Inc. (U.S.), Fonterra Co-operative Group Ltd. (New ,Zealand), Mondelez International Inc. (U.S.), GacLife (U.S.). |
| Key Market Opportunities | Natural ingredients are becoming increasingly popular in functional beverages. |
| Key Market Dynamics | Health benefits linked to functional beverages |
Functional Beverages Market Highlights:
Frequently Asked Questions (FAQ) :
The functional beverages market size was valued at USD 149.20 Billion in 2023.
The market is projected to grow at a CAGR of 5.36% during the forecast period, 2024-2032.
Europe had the largest share in the market.
The key players in the market are Nestle S.A.(Switzerland), The Coca-Cola Company (U.S.), PepsiCo Inc. (U.S.), Halen Brands Inc. (U.S.), Fonterra Co-operative Group Ltd.
The store based functional beverages category dominated the market in 2023.
The energy drink had the largest share in the market.
Research Analyst Level II I have about two years of experience working in the consumer goods and retail industries and i am a biotech graduate.a tech-savvy analytically focused professional with a strong capabilities in identification, concept generation, and strategy evaluation. i can produce data-driven solutions while fusing unusual viewpoints with original concepts. i have been extensively working on business case studies, competitive & comparative analyses, and strategic reports. my primary areas of experience include client management, financial analysis, supply chain evaluation, market entry strategy evaluation, and estimating and forecasting market size.
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