The global functional beverages market is anticipated to grow at a CAGR of around 6% during the forecast period (2024-2031). The market growth is driven by the availability of functional beverages in various flavors and other options such as no-calorie and sugar. However, the consumption of functional beverages above the prescribed limit has adverse health effects, which is anticipated to restrain the market growth during the forecast period. The global functional beverages market is segmented by type (energy drinks, sports drinks, dairy & dairy alternative beverages, and others), by distribution channel (retail & supermarket and online platform), and by geography (into North America, Europe, Asia-Pacific, and the Rest of the World).
Market Dynamics
- The energy drink segment is anticipated to grow with considerable CAGR owing to its increasing adoption across the globe. Energy drinks popularity is rising significantly as an alternative to alcoholic drinks, leading to the significant expansion of the segment.
- Furthermore, the easy availability of energy drinks in various flavored options will drive the energy drink segment in the functional beverages market. Increasing market players' focus on the segment will additionally help the segment.
- North America is expected to hold the largest market share in the market attributed to the strong presence of large chain stores such as Walmart that sells the wide range of functional beverages across the region. In addition, the easy availability of functional beverages owing to the large number of supermarkets and hypermarkets at affordable prices across the region is propelling the regional market.
- Asia-Pacific is anticipated to exhibit the fastest growth owing to the increasing number of international sports events across the region.
- In addition, the increasing popularity of domestic sports is boosting the adoption of functional drinks.
- The changing lifestyle, coupled with the growing health awareness among the population, is boosting the market in Asia-Pacific.
- Moreover, the increasing number of global functional beverages manufactures across the region bolstering the growth.
- Additionally, the increasing demand for ready-to-drink beverages is presently a novel growth opportunity for the market.
The major companies serving the global functional beverages market include Danone SA, Nestle S.A, PepsiCo, Inc., The Coca-Cola Co., The Kraft Heinz Co., and others. The market players are considerably contributing to the market growth by the adoption of various strategies including mergers and acquisitions, partnerships, collaborations, funding, and new product launches.
Recent Development
- In 2024, FHIRST Living Soda, secured its first national listing with Ocado. The bands multipacks will stock in in four ‘gut lovin’ flavors’, including Lemon Lime, Ginger Mandarin, Cherry Vanilla, and Passion Fruit. The packs will serve 4x330 ml cans, and retail at £5.9.
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