Fermented Drinks Market - Forecasts from 2023 to 2028

The fermented drinks market is expected to grow at a compound annual growth rate of 9.79% over the analyzed period, reaching US$15.214 billion by 2028 from US$7.914 billion in 2021.

Fermented beverages have evolved as one of the most widely consumed beverages worldwide. Technologies implemented because of steady advancements in fermenting methods and increased R&D spending on various processing methods have aided market development. Furthermore, the growing health awareness amongst consumers worldwide will also contribute to the market growth during the forecast period.

Fermented beverages have been on the increase.

In the past few years, fermented beverages have been increasingly fortified with nutraceutical ingredients to improve human health and wellness. Owing to the fast pace of life and changing food habits, there is an increased emphasis on health and longevity, which consumers are largely prioritizing. In addition, the increasing urbanization, rising disposable income, and growing consumer purchasing power have encouraged consumers to shift towards fermented beverages over traditional ones, strengthening the market growth during the forecast period. Geographically, the North American region is estimated to hold a significant market due to the wide target base of consumers and the surging demand for alcoholic and non-alcoholic beverages by the consumers in the region.

Rising demand for healthy drinks

Trends in health and wellness are a big influence on consumers' preference for functional beverages. Consumers are increasingly concerned with the veracity of promises as beverages increasingly link themselves to health and disease-preventive measures. The demand for premium functional beverages is growing as customer preferences shift from immunity to sustainability and several other industry trends. Customers are looking for goods with elements that improve their health.

The market is primarily driven by elements like the increased demand from health-conscious consumers for probiotic beverages. The popularity of vegetarianism also drives demand for functional beverages made from plants. Consequently, four out of ten consumers believe that plant-based foods and beverages are healthier, according to the International Food Council's (IFC) 2021 Food and Health Survey.

The fermented drinks market for alcoholic beverages is expected to witness significant growth.

The growth of alcoholic fermented beverages can be attributed to increasing disposable income and lifestyle changes. As the purchasing power rises, the demand for luxury beverages like premium beers and aged wines is expected to increase throughout the projected period. The inclination towards low-alcohol-content drinks is also stimulating market growth. Innovations led by several breweries with flavor-infused products like flavored beers such as lemon, peach, chocolates, strawberries, and others are aiding the market development.

According to the World Health Organization, the per capita alcohol consumption in Europe was 9.5 liters, equivalent to 24 liters of spirit, 80 liters of wine, and 190 liters of beer in 2021 per person aged 15 years and above. The increasing use of alcohol by the millennials and Gen Z population in the country is increasing the market for fermented alcoholic drinks to grow in the anticipated period.

This interest is shown by the beverage industry players.

In recent years, the beverage industry has shown great interest in developing new products from unconventional raw materials that can confer differentiated flavors to the produced beverages, aiming to attract new consumers. One such prospect includes beverages extracted from coffee, fruits, vegetables, and flowers. Cocktails and drinks from them are widely popular, especially among millennials. In addition to the worldwide produced and marketed beverages, in recent decades, there has been an increasing interest in traditional alcoholic beverages that are not widely marketed. These ethnic beverages made from rice, herbs, cereal grains, coconuts, cashews, etc., can be a new avenue of expansion as these drinks often claim health benefits. The popularity of fruit wines like mango wine, pineapple wine, raspberry wine, kiwi wine, and many others among the gastronomical and culinary societies are also assisting the expansion of the market.

The United States remains the dominant market in the North American region.

The prime reason driving the market growth in the USA is the growing consumption of probiotics for better healthcare and nutrition. Furthermore, growth in disposable income in the country has increased expenditure on fitness and healthcare, encouraging the consumption of fragmented drinks. In addition, the rise in consumption of packed food and beverages supports the market demand.

The USA’s fermented drinks market has observed a drastic surge, with major industry players entering to tap the huge potential. Further, the launch of new products and new entrants in the domestic economy have significantly diversified the market dynamics. Consumers prefer natural, probiotics-based drinks over fizzy or carbonated drinks, which has significantly supported the market for fermented drinks. A rise in the consumption of dairy-based fermented drinks is observed with growing veganism in the country. Moreover, the increased demand for fruit-based fermented drinks is growing significantly.

Market Developments:

• In November 2022, Arla Foods Ingredients unveiled a fermented protein beverage. The company's new beverage, which improves fermented protein beverages, is based on 100% whey-based hydrolysates Lacprodan HYDRO.365 and Nutrilac FO-8571.
• In June 2022, Danone North America introduced the multi-benefit probiotic yogurt drink Activia+. It contains billions of live, active probiotics that enhance intestinal health. The product is also a good zinc, vitamin D, and vitamin C source.
• In 2020, Brew Dr. Kombucha launched a new line of functional kombucha beverages and received $20 million in funding in 2021.

Market Segmentation:

By Type

• Alcoholic Beverages
• Non-Alcoholic Beverages

By Source

• Dairy Products
• Fruits
• Vegetables
• Others

By Distribution Channel

• Offline
• Online

By Geography

• North America
• United States
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others
• Europe
• United Kingdom
• Germany
• France
• Spain
• Others
• Middle East and Africa
• Saudi Arabia
• UAE
• Israel
• Others
• Asia Pacific
• Japan
• China
• India
• South Korea
• Indonesia
• Thailand
• Others