For bottlers and beverage industry professionals, keeping a discerning eye on the market's trends is more critical than a perfectly mixed cocktail's recipe. Beyond the usual hits, like carbonated classics and iced infusions, the beverage industry's spotlight is now firmly fixed on the drinks that promise more than just refreshment.
Current functional beverages market
The functional beverage revolution is well underway, with the market poised for substantial growth as we push into the second half of 2024 and 2025. These drinks go a step beyond hydration, offering health benefits that cater to specific consumer needs, be it an energy boost, immune system fortification, or even improved beauty from within.
The functional beverages market has been growing exponentially, following a global shift towards healthier living and a profound consumer taste for self-care. The figures do not lie; market analysts project exponential growth, the kind that keeps well-seasoned professionals awake at the thought of the potential. In 2023, the functional beverages market was valued at over $160 million and research predicts its value will grow up to $270 million in the next 10 years. The reason behind the growth is said to be coming from both younger (like Millennials and Gen Z) and older generations.
Functional beverages types & audiences
Functional beverages come in a variety of blends, each targeting a specific spectrum of consumers. Explore the most popular types of functional drinks below, along with the best demographic market audience you should target:
Energy Drinks
Energy drinks were one of the first types of functional beverages, and are certainly known by all, regular consumers or not. The energy drinks market alone was valued at $55 billion in 2020 and is predicted to steadily keep growing at a CAGR of 8.1% until 2030. They can increase alertness and energy levels, making them perfect for gamers, athletes, or anyone needing to pull an all-nighter without bearing the consequences the next day. These beverages should be consumed responsibly to avoid any potential negative effects.
Energy drinks' pivotal ingredient is one: caffeine. Caffeine, the main ingredient (with twice the regular amount!) of RC Cola Double Caffeine, is a well-known stimulant, prized for its ability to ward off drowsiness and improve concentration. Many energy drinks supplement caffeine with a cocktail of B vitamins, amino acids like taurine, and sometimes herbal extracts such as ginseng and guarana for an added boost. This mix is designed to elevate energy levels and to enhance mental alertness and physical performance, making energy drinks a go-to choice for those seeking an immediate lift in their vitality and focus.
Probiotic Beverages
The probiotic scene focuses on promoting gut health. Beverages like kombuchas and kefirs are notable for their health benefits, primarily due to their high content of beneficial bacteria. These probiotic drinks play a crucial role in maintaining a balanced gut microbiome, contributing to overall health and wellness.
Plant-Based Beverages
As dairy alternatives gain popularity, more and more consumers are shifting towards plant-based options that not only mimic the taste and texture of traditional dairy but are also fortified with essential nutrients. This rise in plant-based dairy alternatives is in part due to a growing consumer awareness of ethical issues related to animal farming and a collective desire to pursue healthier dietary choices.
Sports Drinks
Athletes and fitness enthusiasts require drinks that optimize their performance without impacting their physical routine. Something that allows them to sweat it out while staying hydrated in a healthy manner, and that’s why they choose drinks rich in electrolytes. These drinks replenish the body's electrolytes lost during intense exercise, which are vital for maintaining hydration levels, making them an important component of any fitness routine.
A growing health awareness trend is leading to more people engaging in sports activities. Research observed over 60 new nationwide teams for both men and women in the past years, as well as an increased number of students taking part in nationwide championships – forecasting the sports drinks market to grow up to $36 billion by 2028.
Functional Juices
Some juices go beyond mere taste appeal; they incorporate superfoods and are packed with antioxidant powerhouses, transforming them into a compelling package that offers a delightful blend of flavor, vibrant color, and multifunctional health benefits. These juices tantalize the taste buds and contribute to wellness and vitality, making them a perfect choice for those seeking both nutrition and taste.
Herbal Teas and Infusions
Caffeine-free and brimming with nature's finest herbs, these beverages are experiencing a renaissance, particularly among consumers seeking tranquility and restoration. They offer a natural alternative to traditional caffeinated drinks, providing a soothing experience that appeals to those looking to unwind and recharge. With a variety of flavors derived from herbs known for their calming properties, these drinks are becoming increasingly popular for their health benefits and their role in promoting a more relaxed lifestyle.
Functional Shots
The new kid on the block, functional shots are tiny yet mighty — they condense a bevy of benefits into a concentrated dose. These shots are designed to address specific health concerns, such as immunity, detoxification or inflammation. They offer a quick and easy way to incorporate functional ingredients into one's diet, making them an appealing option for busy individuals, like millennials or Gen-Z, who want to boost their wellness on the go.
Current trends in the functional beverages market
The secret to success in the functional beverage market isn't just about creating the right mix of ingredients. Here's where bottlers and manufacturers need to stay abreast of the latest trends:
- Health and wellness - products featuring natural ingredients, no sugar, and benefits such as improved immunity or stress relief are becoming increasingly popular. Consumers are looking for products that not only taste good but also offer some added value to their health.
- Beauty beverages - beauty from within is more than a concept; it represents a growing market for beverages designed to improve skin health, support hair growth, and maintain overall appearance and wellness. These products combine antioxidants, collagen, vitamins, and minerals to create a beauty potion that appeals to consumers looking for both inner and outer radiance. In 2023 alone, the beauty drinks market was valued at $1.67 billion.
- Personalization - consumers are demanding more than just a one-size-fits-all solution to their health. Personalization is key, with options for custom blends that address individual health needs gaining steady traction. Whether it's a particular vitamin deficiency or a digestive issue, personalized functional beverages offer tailored solutions for a diverse range of health concerns.
- Innovative ingredients - part of the intrigue of functional beverages lies in the novelty of their ingredients. Bottlers who dare to venture beyond the traditional and incorporate innovative substances like adaptogens, CBD, and unique plant derivatives will be leading the way the beverage industry is shifting towards very soon.
- Convenience - ready-to-drink products that are both easily accessible and deliver their promised benefits are simplifying life for people with busy lifestyles, offering both ease of use and satisfying flavors.
Why should bottlers consider functional beverages
As functional beverages continue their upward trajectory, bottlers need to keep an eye on the trends and be ready to adapt. By staying ahead of the curve and offering products that cater to consumers' evolving preferences, they can ride the wave of success in this dynamic market. Here’s what you should pay attention to when including functional beverages in your offer:
Developing functional beverages
For high-quality products, extensive research and innovation in product development are essential. It's important to create products that are both appealing to consumers and supportive of health benefits. Quality control and attention to detail are key in crafting the perfect masterblend that will set your product apart from the rest.
Supplying functional ingredients
The supply chain plays a crucial role in ensuring that the best ingredients are used and safe practices are followed in the production of the beverage. It's important to understand that the quality and healthiness of a beverage directly depend on the effectiveness and reliability of its supply chain.
Marketing and branding
Marketing plays a crucial role in attracting consumers to wellness and functional products. Brands that effectively highlight the health benefits and appealing taste of their products in their content strategy will attract more customers.
Functional partnerships and collaborations
A successful bottling operation requires collaboration. It involves working with ingredient suppliers, technology experts, and large retail partners to expand from a small-scale operation to a global business. By forming strategic partnerships, bottlers can access new markets and reach a wider audience.
The demand for drinks that deliver health and function along with taste is becoming the new normal. For bottlers and industry professionals, the functional beverage market offers a golden goblet of potential — to innovate, to lead, and to sip from success as the consumer landscape changes. Keeping a finger on the pulse of these beverage industry trends is crucial for developing products that resonate with consumers' ever-evolving needs.
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