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

Market Overview

The global functional beverage market is projected to grow at a CAGR of 6.96% during the forecast period (2020 - 2025).

• 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.
• The ongoing COVID-19 pandemic is seen as a once-in-a-lifetime event and something that will have a profound impact on concerns about health, as well as 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
• Key players 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 (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 the market growth.​

Scope of the Report

The global functional beverage market is segmented by type, distribution channel, and geography. Based on type, the market is segmented into an 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.

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Key Market Trends

The Growing Demand for Healthy Hydration

The progressive inclination of consumers toward health-oriented products 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 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.

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