Strong growth in functional beverage market

According to Research and Markets, functional beverages and consumer use of food and beverages as therapeutic are leading to the functional beverage market to grow at a CAGR of 10.49% and is expected to reach USD 1981.2 billion from 2021-2026.

Functional benefits are becoming increasingly important to consumers. According to NielsenIQ Homescan Survey (November 2021), nearly half (48%) of households say that health attributes/health enhancing benefits are important when purchasing food and beverages.

Functional health products are seeing significant growth in the global market. China, for example, is expected to reach a functional market size of $29.8 billion by 2027, growing at a CAGR of 10.3% from 2020 - 2027. Japan and Canada are expected to grow at a CAGR of 4.3% and 5.3% during 2020 - 2027. Germany is expected to grow at a CAGR of approximately 5.4%.

In addition, consumers are willing to pay more for healthier products, a category that also opens up new ways to facilitate consumer transactions with higher-end brands.

Today, beverages that support physical health are ripe for the picking, such as Vitamin and immune-boosting drinks. Classic energy drinks, natural energy drinks, and those that refresh the mind are also desirable categories. In addition, there are growing opportunities in areas such as gut health (e.g., kombucha, kefir, birch water), which is growing at a rate of 35.6 percent, according to NielsenIQ.

So, how can manufacturers and retailers make the most of this opportunity? Britvic, a British soft drink manufacturer, says that offering the right products with the right labeling to consumers can help manufacturers and retailers make the most of this opportunity.

Britvic notes, "Certain in-store levers can help retailers bridge the gap between those who are interested in functional health drinks and those who buy the category. Consumers see functional health beverages as a segment and want these products to be sold together. Offering the right range of products is also critical to increasing awareness and sales rates - 46% of consumers believe the number of new products makes buying healthy products confusing, while 63% find it difficult to know if a product claiming health benefits (such as immunity) will have an impact on your health. "

Therefore, retailers are advised to build customer trust by stocking reliable functional health brands and improving consumer education about these products.

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2022-10-28

Shaanxi Huike Botanical Development Co., Ltd.