Functional Beverages Market Report 2025

The functional beverages market size has grown strongly in recent years. It will grow from $164.8 billion in 2024 to $175.84 billion in 2025 at a compound annual growth rate (CAGR) of 6.7%. The growth in the historic period can be attributed to strong economic growth in emerging markets, increased investments, increase in number of athletes, increase in clean-label, organic and non-GMO (genetically modified organism) products and increased penetration of organized retail.

The functional beverages market size is expected to see strong growth in the next few years. It will grow to $220.93 billion in 2029 at a compound annual growth rate (CAGR) of 5.9%. The growth in the forecast period can be attributed to the growing number of health-conscious consumers, growing demand for immunity boosting foods and beverages and increasing population. Major trends in the forecast period include launch of relaxation drinks, cannabidiol (CBDFNAS) -infused functional drinks, protein-based functional beverages, vegan/plant-based functional beverages, healthy hydration drinks, introduction of nootropic drinks, low-calorie, sugar-free drinks and 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.

Leading companies in the functional beverages market are concentrating on creating innovative products, particularly ready-to-drink (RTD) beverages, to cater to the rising demand for convenient and health-oriented options. An RTD beverage is a pre-packaged drink that is ready for immediate consumption without requiring any additional preparation. For example, in January 2022, Starbucks Corporation, a US-based café chain, launched Starbucks BAYA Energy, a ready-to-drink beverage designed to provide consumers with a refreshing and energizing choice. Each 12-ounce serving of this drink contains 160 milligrams (mg) of caffeine sourced from coffee fruit, delivering a significant energy boost for those seeking an uplift throughout the day. Furthermore, the beverage is enriched with 90 mg of antioxidant vitamin C, which aids immune health, positioning it as both an energy drink and a functional beverage. It is readily available in grocery stores, convenience stores, and online for consumers in search of a quick and accessible energy source.

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 May 2022, A.G. Barr plc, a UK-based soft drink manufacturer specializing in functional drinks, acquired Boost Drinks Holdings Limited for an initial consideration of $21.88 million (Euro 20 million). This acquisition is intended to enhance A.G. Barr plc's product portfolio by focusing on high-growth and functional beverage categories through innovative developments. Boost Drinks Holdings Limited is a UK-based company that offers functional beverages.

Major companies operating in the functional beverages market include 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, European Drinks S.A, Košík, Cloud 9 Energy Drink, the Hain Celestial Group, Campbell Soup Company, 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 2024. 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.

Functional beverages are drinks designed to offer health benefits that go beyond basic hydration. They typically contain ingredients like vitamins, minerals, herbs, probiotics, and amino acids. These beverages aim to enhance both physical and mental well-being by targeting various health needs, including energy enhancement, improved digestion, and immune support.

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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