Functional Beverages Market size in Asian, USA & Europe Market

Functional beverages are non-alcoholic beverages and which have ingredients that serve the purpose of providing nutrients being beneficial to health. The global demand of healthy and rejuvenating drinks as compared to carbonated drinks is ever on the rise. 

There is a tough competition among brands for the same. The need for health and hygiene has always been a prime concern. With the continuing situation of Covid-19, customers have become extremely cautious about over their eating and drinking habits as it directly enters the system. 

Functional Beverages Market size in Asian, USA & Europe Market


Anything and everything needs to be sterilized. Beverages are highly susceptible to spoilage. People are moving away from the demand for carbonated drinks and there is a rising demand for probiotic drinks like curd and yoghurt and healthier fruit juices in multiple flavors. 

Consumers are willing to spend more on beverages that keeps the body hydrated for a longer time. Along with that the beverages are fortified with vitamins and minerals. The drink must satisfy the person’s thirst. This creates an ocean of opportunities for the beverage market and especially those providing functional beverages like fortified drinks and immunity boosters. The global functional beverage market size is categorized based on type, distribution channel and geography.

Based on type the drinks are energy drinks, sports drinks, fortified drinks, dairy and dairy alternative beverages and so on.


The category-based on distribution channels includes retail stores, Pharmacies or Health stores, convenience stores and online retail stores.


Beverages based on geography the market is spread across Asia, USA & Europe

 Functional beverage industry companies are generally classified into two groups. 

1. Traditional non-alcoholic beverage companies, like Pepsi or Coca Cola.

2. Major food companies, such as Nestle or Kraft Foods


The drinks need to take care of the gut health and immunity. The drinks must also be such that it is intended for weight loss or gain (thinning or fattening drinks) or with zero or very less calories, good health and beauty. Some drinks like ‘Bournvita’ is intended for children’s growing ages. Some beverages are intended for people who are either lactose intolerant or allergic to certain ingredients.


The functional beverage market works in the following ways


1. Marketing the product as healthy and energizing. It can have the target audience as sportspeople and growing children.

2.  2. It can be an extension of an existing product line. For example, let’s take the example of Horlicks. Horlicks has the extended product, Women’s Horlicks. This creates a market and not just for growing up children.

     3. Larger companies acquire smaller companies to increase the market share.


The market focuses on four different categories as

1. Hydrating drinks: These drinks focus on quenching thirst and may vary in their calorie content.


2. Energy drinks: These stimulating drink focuses on the category of athletic people and sports people

3. Weight loss drinks: Obesity is problem, people are fighting with. These have ingredients that help in cutting down fat.

4. Wellness drinks: These are soothing drinks that are meant for providing health  benefits.


The US market is a huge fan of carbonated drinks. Northern America holds a major share in the global functional beverage market and it is expected to rise in the upcoming years. European and Asian markets are expected to grow as well as are forecasted. The global functional beverage market is projected to grow at a CAGR of 6.96% during the forecast period (2020 - 2025).
Usually carbonated drinks are rich in sugar and therefore calories which has resulted in obesity and cardiovascular diseases as a primary health concern. This opens up a new avenue for low calorie or zero calorie drinks which is satisfying and healthy with minimum. Sweetening alternatives like stevia with low glycemic index. One of the main restraints to the market is that it is relatively costly as they contain specific ingredients for the target audience. 
Another concern is the addition of artificial ingredients (sweeteners, clarifiers, flavours, colouring agents and so on). Attempts are made to reduce it to a minimum as it is resulting in side effects to human health in the long-run usage including skin diseases like rashes and so on. Packaging is another concern. With waste disposal becoming a global issue, the industry has to come up with fresh ideas to pack the beverage in eco-friendly package which can be easily bio-degradable. The demand is ever-rising and so is sure to see newer changes in variants and flavours as part of new product development.

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