Functional Beverage Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Functional Beverage Market is segmented by Type (Energy Drink, Fortified Juice, Sports Drinks, Dairy and Dairy Alternative Drinks, and Other Products), Distribution Channel (Supermarkets/Hypermarkets, Drug Stores and Pharmacies, Convenience Stores, Online Retail Stores, and Other Distribution Channel), and Geography (North America, Europe, Asia-Pacific, South America, and Middle-East and Africa).

Market Snapshot

Functional Beverage Market Overview
Study Period: 2016 - 2026
Base Year: 2020
Fastest Growing Market: Asia Pacific
Largest Market: North America
CAGR: 6.96 %
Functional Beverage Market Major Players

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Market Overview

The functional beverage market is projected to register a CAGR of 6.96% during the forecast period (2021 - 2026).

The ongoing COVID-19 pandemic is seen as a once-in-a-lifetime event and something that will have a profound impact on health concerns and eating and drinking habits. This is something that will drive demand for functional products that help boost immunity as consumers look to minimize the risk of illness. When it comes to such products, it is crucial that they are deemed affordable and credible when it comes to health claims.

Increasing demand for innovative products, like plant-based and lactose-free beverage products, drive the market studied, while the inclusion of CBD-infused functional beverages is expected to be the opportunity to the future market.

Key players operating in the market are embarking on product innovation, mergers, and acquisitions as their key strategies to achieve consolidation and optimize their offerings. For instance, Glanbia acquired Body & Fit (which offers energy drinks in the Netherlands), a leading direct-to-consumer (DTC), online, branded business focused on performance nutrition. This acquisition enabled GPN to have a direct presence in the rapidly growing DTC channel. Additionally, it may help the company increase its revenue, which may drive market growth.​

Scope of the Report

A functional beverage is classified as a conventional liquid food marketed to convey product ingredients or supposed health benefits. The global functional beverage market is segmented by type, distribution channel, and geography. Based on type, the market is segmented into energy drinks, sports drinks, fortified juice, dairy and dairy alternative beverage, and other types. Based on the distribution channel, the market is segmented into supermarket/hypermarket, drug stores and pharmacies, convenience stores, online retail stores, and other distribution channels. Based on geography, the market is segmented into North America, Europe, Asia-Pacific, South America, and Middle East & Africa. For each segment, the market sizing and forecasts have been done on the basis of value (in USD billion).

By Type
Energy Drinks
Sports Drinks
Fortified Juice
Dairy and Dairy Alternative Beverage
Other Types
By Distribution Channel
Pharmacies/Health Stores
Convenience Stores
Online Retail Stores
Other Distribution Channels
By Geography
North America
United States
Rest of North America
United Kingdom
Rest of Europe
Rest of Asia-Pacific
South America
Rest of South America
Middle-East and Africa
South Africa
Saudi Arabia
Rest of Middle-East and Africa

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Key Market Trends

The Growing Demand for Healthy Hydration Products

The progressive inclination of consumers toward health-oriented beverages has involved probiotic food products as a requisite in the list. In addition, the sale promoting tag lines, such as “ready to drink,” “on the go,” and other convenience factors, such as favorable packaging altogether served by beverages, further augments the demand for probiotic drinks, including kombucha. Consumers have started to prefer functional drinks over fruit juices and carbonated drinks.

With consumers now increasingly aware of the health implications associated with soft drinks categories, concerned drinkers are frequently shunning vilified categories, like carbonates and juices, in favor of ‘healthier choices, such as soymilk, probiotics, and other functional drinks. Consumer education has been the key factor behind the rising demand for healthy hydration drinks. The trend of healthy hydration owes its success to the growing awareness toward fermented drinks with natural ingredients and the increasing acceptance of consuming probiotics.

Functional Beverage Market Key Trends

Increasing Consumption of Functional Beverages from the Asia-Pacific Market

The high incidence of cardiovascular disease, osteoporosis, and arthritis, coupled with the growing demand for convenience beverages and the changing lifestyle among Asian consumers, is the major driver for the growth of functional energy drinks, fortified/functional plant-based, and malt-based hot drinks sales in the market.

Furthermore, due to the high prevalence of diabetes in countries like India and China, consumers are becoming more aware of the importance of a healthy diet and active lifestyle, promoting the consumers to prefer natural sweeteners, such as stevia beverages. According to the International Diabetes Federation, India was home to 77 million diabetes patients in 2019, the second-largest in the world. By 2030, the number is predicted to reach 101 million. Thus, companies like PepsiCo Inc. and Coca-Cola are committed to remove artificial ingredients and reduce the sugar content in their products.

Functional Beverage Market Growth Rate

Competitive Landscape

The functional beverage market is a competitive market and comprises numerous regional and international competitors. Players are also extensively focusing on providing consumers with innovative offerings while including functional benefits in each of their products. Furthermore, while engaging the consumers with innovation and expansion strategies, key players are capitalizing on the market revenue. Some of the major players in the market studied are PepsiCo, Red Bull GmbH, Coco-Cola, and Monster Beverage Corporation, among others.

Recent Developments

In 2021, Plant-based beverage Koia, announced that their products will  be nationally distributed in 7-Eleven convenience stores in United States. Over 60% of consumers come to 7-Eleven for beverages, making it critical for the company portfolio to match their needs of living healthy lives

In 2020, PepsiCo launched a new functional beverage, Driftwell, which it claims is designed to help consumers relax, unwind and de-stress. It contains L-theanine, an amino acid commonly found in tea leaves that is said to promote relaxation without drowsiness, as well as magnesium, and it has a spa-water-inspired flavor with hints of blackberry and lavender.

In 2020, OWYN announced a growth investment round led by PowerPlant Ventures. With the investments PowerPlant Ventures joined Clearlake and Halen Brands as Partners to Accelerate Growth of OWYN, company’s leading Plant-Based Protein Beverage and Functional Nutrition Brand.

In 2019, 7-Eleven had introduced a new sugar-free energy drink with L-Theanine, called Triton. The drink contains caffeine and the amino acid L-theanine, both sourced from green tea leaves. It also contains B vitamins, ginseng, taurine, guarana, and amino acids.

In 2019, GacLife launched a line of seven daily health beverages that aid in sleep, skin health, energy, relaxation, and detoxification.

Table of Contents


    1. 1.1 Study Deliverables and Study Assumptions

    2. 1.2 Scope of the Study




    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Porter's Five Forces Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry


    1. 5.1 By Type

      1. 5.1.1 Energy Drinks

      2. 5.1.2 Sports Drinks

      3. 5.1.3 Fortified Juice

      4. 5.1.4 Dairy and Dairy Alternative Beverage

      5. 5.1.5 Other Types

    2. 5.2 By Distribution Channel

      1. 5.2.1 Supermarket/Hypermarket

      2. 5.2.2 Pharmacies/Health Stores

      3. 5.2.3 Convenience Stores

      4. 5.2.4 Online Retail Stores

      5. 5.2.5 Other Distribution Channels

    3. 5.3 By Geography

      1. 5.3.1 North America

        1. United States

        2. Canada

        3. Mexico

        4. Rest of North America

      2. 5.3.2 Europe

        1. United Kingdom

        2. Germany

        3. France

        4. Russia

        5. Italy

        6. Spain

        7. Rest of Europe

      3. 5.3.3 Asia-Pacific

        1. India

        2. China

        3. Japan

        4. Australia

        5. Rest of Asia-Pacific

      4. 5.3.4 South America

        1. Brazil

        2. Argentina

        3. Rest of South America

      5. 5.3.5 Middle-East and Africa

        1. South Africa

        2. Saudi Arabia

        3. Rest of Middle-East and Africa


    1. 6.1 Most Active Companies

    2. 6.2 Most Adopted Strategies

    3. 6.3 Market Share Analysis

    4. 6.4 Company Profiles

      1. 6.4.1 PepsiCo Inc.

      2. 6.4.2 Red Bull GmbH

      3. 6.4.3 The Coca-Cola Company

      4. 6.4.4 Danone SA

      5. 6.4.5 Monster Beverage Corporation

      6. 6.4.6 JAB Holdings Company

      7. 6.4.7 General Nutrition Centers Inc.

      8. 6.4.8 The Hain Celestial Group Inc.

      9. 6.4.9 Fonterra Co-operative Group

      10. 6.4.10 Amway Corporation

    5. *List Not Exhaustive


**Subject to Availability

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Frequently Asked Questions

The Functional Beverage Market market is studied from 2016 - 2026.

The Functional Beverage Market is growing at a CAGR of 6.96% over the next 5 years.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2020.

PepsiCo, Inc., The Coca-Cola Company, Monster Beverage Corporation, Red Bull GmbH, Danone S.A. are the major companies operating in Functional Beverage Market.

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