The global market for functional drinks was valued at USD 204.8 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 7.1% from 2023 to 2030. The growing awareness of the health benefits associated with functional drinks, which are enriched with health-boosting ingredients like amino acids, vitamins, and minerals, is expected to drive market growth in the coming years. Additionally, increased marketing efforts and innovative product introductions by key players are likely to further accelerate market expansion during the forecast period. The COVID-19 pandemic positively impacted demand for functional drinks due to the rising interest in products that boost immunity and offer other health benefits. A whitepaper from Kerry Group revealed that over 65.0% of consumers became more health-conscious after the pandemic. Moreover, the availability of functional drinks through e-commerce platforms, retail outlets, and grocery stores helped boost market growth during the pandemic.

However, the functional beverages market faced challenges due to lockdowns and trade restrictions, which disrupted the supply of raw materials and caused production shortages. The market is gradually recovering to pre-COVID levels as manufacturers focus on new product launches that address changing consumer preferences.

Key factors driving the market include the ease of consumption and the health benefits of functional drinks. Furthermore, the introduction of new flavors through recent product innovations is contributing to increased product demand. Other factors such as rising healthcare costs, trends in disease prevention, and the growing inclination toward maintaining a healthy lifestyle are also driving market growth.

Type Insights
The global functional drinks market is categorized into sports drinks, energy drinks, and nutraceutical drinks. Sports drinks are expected to grow at a CAGR of 7.1% during the 2023-2030 period. This growth is attributed to the increasing trend toward fitness and healthy lifestyles, a growing number of fitness centers and gyms, and the growing commercialization of sports events in countries like China and India. Sports drinks help replenish energy during physical activity, while energy drinks provide quick energy boosts and mental and physical stimulation.

Energy drinks led the market in 2022, capturing the largest revenue share of 40.0%. The key ingredients in energy drinks include caffeine, which provides stimulation, and taurine, essential for muscle development and cardiovascular health. Energy drinks are particularly popular in advanced economies such as the U.S. and Canada due to their high caffeine content, whereas sports drinks are more common in developing nations due to the increasing popularity of physical activity and sports.

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Distribution Channel Insights
The global functional drinks market is segmented into hypermarkets/supermarkets, specialty stores, online channels, and others. The online distribution channel is expected to experience the highest growth rate, with a CAGR of 7.8% during the 2023-2030 period. Factors contributing to this growth include increasing internet penetration in rural areas and the high adoption rate of online shopping among young and working consumers.

The adoption of technology and the introduction of user-friendly shopping apps are also driving demand for the online segment. Online shopping is convenient and cost-effective, and the growing number of working women in developing countries further fuels the demand for functional drinks.

Regional Insights
Asia Pacific accounted for a significant revenue share of 36.06% in 2022. According to the International Diabetes Federation, China has the highest number of diabetic people (141.0 million), followed by India, which had more than 74.0 million adults living with diabetes in 2021. As a result, major players like Coca-Cola and PepsiCo are focusing on removing artificial ingredients, reducing sugar content, and developing new functional drinks to cater to health-conscious consumers in the region.

Key Companies
Some leading companies in the global functional drinks market include:

  • The Coca-Cola Company

  • Monster Beverage Corporation

  • PepsiCo

  • Red Bull GmbH

  • Otsuka Holdings Co., Ltd.

  • Suntory Group

  • DANONE SA

  • Nestlé

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