Functional Beverage Market Is Estimated To Witness High Growth
SWOT Analysis
Strength: Functional beverages offer various health benefits such as improved energy levels, enhanced immunity, antioxidants, and other nutritional benefits. They are gaining popularity among health-conscious consumers. The market is witnessing the launch of innovative beverages targeting specific diseases and health conditions. Manufacturers are focusing on the clean label trend by using natural ingredients without artificial colors, sweeteners, or preservatives.
Weakness: Functional beverages are expensive compared to carbonated drinks and juices. The perceived benefits of these drinks are sometimes exaggerated, which can undermine consumer trust. Not all health claims made by brands are backed by scientific research. Some products may contain artificial ingredients that can cause side effects.
Opportunity: Rising health awareness is driving the demand for beverages with functional benefits. The millennial population is more inclined toward wellness products, presenting an opportunity to target this demographic segment. There is scope to expand into developing markets in Asia Pacific and Latin America. Product innovation integrating popular ingredients like protein, probiotics, vitamins can boost growth.
Threats: Strict regulations surrounding health claims and ingredient labeling can restrict new product launches. The widespread popularity of other beverages such as sparkling water, coffee, and tea poses competition. Changes in consumer preference toward natural products without artificial substances is a challenge. Price fluctuation of raw materials can increase production costs.
Key Takeaways
The Global Functional Beverage Market Size is expected to witness high growth. Driven by rising health consciousness, the market size is projected to reach US$ 191.54 billion by 2023 from US$ 105.15 billion in 2018, at a CAGR of 8.6% during the forecast period.
Regional analysis: North America currently dominates the market, followed by Europe. However, Asia Pacific is expected to grow at the fastest pace owing to rising incomes, growing millennial population, and improving lifestyle in countries like China, India, and Japan. Functional drinks containing immunity-boosters, antioxidants, and energy are gaining traction in the region.
Key players: Key players operating in the functional beverage market include PepsiCo Inc., Red Bull GmbH, The Coca-Cola Company, Danone SA, Monster Beverage Corporation, JAB Holdings Company, General Nutrition Centers Inc., The Hain Celestial Group Inc., Fonterra Co-operative Group, and Amway Corporation. These companies are focusing on new product launches, acquisition strategies as well as expanding their manufacturing and distribution facilities globally to strengthen market presence.
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