Functional Beverages Global Market Report 2024

The functional beverages market size has grown strongly in recent years. It will grow from $154.58 billion in 2023 to $165.01 billion in 2024 at a compound annual growth rate (CAGR) of 6.7%. The growth observed in the historical period can be ascribed to robust economic expansion in emerging markets, augmented investments, a rise in the number of athletes, an uptick in demand for clean-label, organic, and non-GMO (genetically modified organism) products, and heightened penetration of organized retail.

The functional beverages market size is expected to see strong growth in the next few years. It will grow to $207.77 billion in 2028 at a compound annual growth rate (CAGR) of 5.9%. The anticipated growth in the forecast period can be attributed to an increasing number of health-conscious consumers, a rising demand for foods and beverages that boost immunity, and a growing population. Key trends expected in the forecast period include the introduction of relaxation drinks, functional beverages infused with cannabidiol (CBD), protein-based functional drinks, vegan/plant-based functional beverages, healthy hydration drinks, the launch of nootropic drinks, low-calorie and sugar-free beverages, as well as an emphasis on partnerships and collaborations.

The anticipated surge in health awareness is expected to drive the demand for functional beverages in the forecast period. Functional beverages, enriched with vitamins, minerals, herbs, and amino acids, are gaining popularity for their ability to enhance various body functionalities, including heart rate management, digestive health, immune system support, and weight management. Consumers are increasingly gravitating towards functional beverages tailored to address specific health concerns. According to the Packaging Strategies journal, a notable shift in the beverage industry involves consumers moving towards functional beverages as they prioritize health improvement. The increasing prominence of clean-label, organic, and non-GMO products is influencing consumer preferences, leading to a preference for functional drinks over carbonated beverages and fruit juices, thereby driving the demand for functional beverages in the coming years.

The expansion of e-commerce is poised to fuel the growth of the functional beverage market. E-commerce, involving online buying and selling, as well as associated data and financial transactions, provides a versatile and influential platform for functional beverage brands. This platform enables brands to engage with consumers, optimize sales processes, and adapt to the evolving market dynamics. For example, in August 2023, the United States Census Bureau reported a 7.5% increase in e-commerce estimates for the second quarter of 2023 compared to the same period in 2022, while overall retail sales increased by 0.6%. Consequently, the growth of e-commerce emerges as a key driver for the functional beverage market.

The growth of functional beverages is being propelled by the production of low-calorie natural sweeteners and the incorporation of natural colors and ingredients. Key players in the industry are implementing various strategies to cater to consumer demands. For example, in April 2021, Manus Bio, Inc., a US-based company specializing in natural ingredients, introduced NutraSweet Natural, a plant-based sweetener with zero calories. NutraSweet Natural is created by isolating the sweetest and purest components of the stevia leaf, blended in a proprietary mix to replicate the taste of sugar without the associated calories, all while minimizing its environmental impact.

Major companies active in the functional beverages market are concentrating on introducing innovative products such as functional sparkling water to enhance their market standing. Functional sparkling water refers to carbonated water infused with additional ingredients to provide specific health or functional benefits. In February 2023, Kyowa Hakko USA, a US-based biotechnology company, launched CENTR Enhanced Functional Sparkling Water infused with Cognizin Citicoline. Designed to elevate cognitive function and enhance mood, this low-calorie, non-GMO, gluten-free, and vegan-friendly beverage comes in two flavors, lemon lime and peach ginger, providing a refreshing and health-conscious option for those seeking a mental boost.

In March 2021, Nestlé S.A., a Switzerland-based multinational food and drink processing conglomerate, acquired Essentia Water LLC for an undisclosed amount. This acquisition aims to reinforce Nestlé's presence in the functional water segment, offering a competitive edge in the market. Essentia Water LLC is a US-based beverage company.

Major companies operating in the functional beverages market report are PepsiCo Inc., The Coca-Cola Company, Red Bull GmbH, Danone, Nestle S.A, Monster Beverage Corporation, Dr. Pepper Snapple Group, Fonterra Co-Operative Group Ltd., Kraft Heinz Company, Abbott, Dali Foods Group Co., Ltd., Hangzhou Wahaha Group Co., Ltd., Red Bull, Shenzhen Eastroc Beverage Industrial Co., Ltd., Nongfu Spring, China Haisheng Juice Holdings Co., Ltd., Beijing Huiyuan Food and Beverage Co., Ltd., Britvic, GoodMills Group GmbH, European Drinks S.A, Sokolow, Zaklady Tluszczowe Kruszwica, Penam, Metarom Group, Košík, Vitana, Cloud 9 Energy Drink, Mondelez International, the Hain Celestial Group, Campbell Soup Company, Red Bull and Rockstar Inc., Unilever, Arcor, Starbucks, Agrosuper, JBS, Ambev, Almarai Company, Arab Company for Livestock Development (ACOLID), Al-Watania Company, Herbalife Nutrition SA, Viju Industries Nigeria Ltd.

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

The primary categories of functional beverages include energy drinks, sports drinks, nutraceutical drinks, dairy-based beverages, juices, enhanced water, and other varieties. Energy drinks are beverages containing ingredients promoted to boost energy and mental performance. These beverages serve health and wellness purposes as well as support weight management, and they are available through various distribution channels, including brick-and-mortar stores and online platforms.

The functional beverages research report is one of a series of new reports that provides functional beverages statistics, including functional beverages industry global market size, regional shares, competitors with functional beverages share, detailed functional beverages segments, market trends and opportunities, and any further data you may need to thrive in the functional beverages industry. This functional beverages 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 functional beverages market consists of sales of energy drinks, sports drinks, enhanced fruit drinks, bottled water, and other functional beverages. Values in this market are factory gate values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

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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