Functional Drinks Global Market Report 2024

The functional drinks market size has grown strongly in recent years. It will grow from $43.63 billion in 2023 to $46.38 billion in 2024 at a compound annual growth rate (CAGR) of 6.3%. The historical growth in the functional drinks sector can be attributed to several factors, including significant innovation and product development within the industry, effective marketing and branding strategies employed by companies, heightened consumer awareness regarding health and wellness, evolving lifestyle preferences among consumers, and the expansion and effectiveness of various distribution channels utilized by manufacturers and retailers.

The functional drinks market size is expected to see strong growth in the next few years. It will grow to $57.6 billion in 2028 at a compound annual growth rate (CAGR) of 5.6%. Anticipated growth in the forthcoming period is expected to result from several factors, including the development of advanced formulations in functional drinks, addressing global health challenges, an increased emphasis on sustainability and ethical practices within the industry, rising trends in personalization, and a growing focus on mental health considerations. Key trends projected for this period encompass a continued emphasis on health and wellness in functional drink offerings, a preference for natural and clean label ingredients, the utilization of innovative ingredients in drink formulations, a shift towards digital marketing strategies and e-commerce platforms for sales and outreach, as well as the emergence of functional beverages targeting mental well-being to address evolving consumer needs.

The escalating costs of healthcare are anticipated to drive the growth of the functional drink market. Health expenditures represent significant investments aimed at promoting, restoring, and sustaining health. Functional beverages, containing substances believed to offer health benefits beyond basic nutrition, have gained popularity. Some of these beverages include antioxidants, vitamins, and minerals that enhance the immune system, reduce blood pressure, and alleviate inflammation. They present a cost-effective means to address nutritional needs. As of March 2022, the Centers for Medicare & Medicaid Services projected an average annual increase in national health spending of 5.1% between 2021 and 2030, reaching an estimated $6.8 trillion by 2030. Over the same period, Medicare expenditures were anticipated to grow at a 7.2% annual rate, while Medicaid spending was expected to increase at a 5.6% annual rate.

The increasing prevalence of cardiovascular diseases is set to fuel the growth of the functional drinks market. Cardiovascular diseases encompass various conditions affecting the heart and blood vessels, posing a significant health concern. Individuals grappling with cardiovascular issues turn to functional drinks due to their inclusion of nutrients such as omega-3 fatty acids, potassium, and magnesium, known for their heart health benefits. In October 2022, the National Library of Medicine projected that, by 2035, 45.1% of the US population would experience some form of cardiovascular disease, with associated total costs reaching an estimated $1.1 trillion. Additionally, in May 2023, the World Heart Federation reported 20.5 million deaths from cardiovascular diseases in 2021.

A prominent trend in the functional drink market is the emphasis on product innovation. Leading companies in this sector prioritize the development of innovative solutions to bolster their market positions. In February 2022, Rockstar Energy Drinks, a subsidiary of PepsiCo Inc., introduced Rockstar Unplugged, a novel energy drink featuring hemp seed oil and B vitamins as key ingredients, offering a unique alternative to high-energy beverages. With 80 mg of caffeine, Rockstar Unplugged blends a distinctive combination of ingredients, including caffeine, hemp seed oil, B vitamins, spearmint, and lemon balm, creating a calorie- and sugar-free beverage.

Major players in the functional drinks market are concentrating on innovation, exemplified by the introduction of instant energy drinks, to secure a competitive advantage. Instant energy drinks are formulated to offer a swift and transient enhancement in physical and mental alertness by delivering stimulants such as caffeine and sugar rapidly. An illustration of this trend is evident in the actions of Sanjay Ghodawat Group, an Indian conglomerate, which launched RIDER in March 2021. RIDER is a revitalizing energy drink tailored to meet the immediate energy requirements of the body, offering a refreshing experience that invigorates the senses and provides an instant energy boost for an enriched life.

In May 2022, A.G. Barr plc, a UK-based soft drink manufacturer specializing in functional beverages, acquired Boost Drinks Holdings Limited. The initial consideration for the acquisition amounted to $21.88 million (Euro 20 million). Through this strategic acquisition, A.G. Barr plc aims to delve into high-growth and functional beverage categories with innovative offerings. Boost Drinks Holdings Limited, the acquired UK-based company, is a provider of functional drinks, aligning with the overarching strategy of expanding product portfolios to address evolving consumer preferences.

Major companies operating in the functional drinks market report are The Coca-Cola Company, PepsiCo Inc., Red Bull GmbH, Suntory Beverage and Food Ltd., Danone S.A., Nestlé SA, Kraft Heinz Co., Monster Beverage Corporation, Otsuka Holdings Co. Ltd., Universal Nutrition Corp., Clif Bar & Company, Dr Pepper Snapple Group Inc., Glanbia Plc, Kerry Group Plc, Probi AB, The Hain Celestial Group, Koios Beverage Corp., Celsius Holdings Inc., Vital Proteins LLC, Fonterra Co-operative Group Limited, The Naked Collective Limited, The Alkaline Water Company Inc., KeHE Distributors LLC, The Honest Company Inc., The a2 Milk Company Limited, The New Age Beverages Corporation, The Simply Good Foods Company, The Good Crisp Company, The Ginger People, The Republic of Tea.

Asia-Pacific was the largest region in the functional drinks market in 2023. The regions covered in the functional drinks market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the functional drinks market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The primary categories of functional drinks include energy beverages, functional fruit and vegetable juices, sports drinks, functional water, and other specialized varieties. Energy beverages often contain elevated levels of caffeine, additional sugars, various chemicals, and legal stimulants such as guarana, taurine, and L-carnitine. These drinks are distributed through multiple channels such as hypermarkets or supermarkets, specialty stores, online platforms, and others. They find applications in various sectors such as health and wellness, as well as weight loss programs.

The functional drinks market research report is one of a series of new reports that provides functional drinks market statistics, including functional drinks industry global market size, regional shares, competitors with a functional drinks market share, detailed functional drinks market segments, market trends and opportunities, and any further data you may need to thrive in the functional drinks industry. The functional drinks market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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