NORTH BETHESDA, Md., July 24, 2023 -- Functional beverages purport to provide functional benefits that consumers perceive as important to health or day-to-day life, such as:
- increased energy
- enhanced hydration
- boosts in cognitive function/brain activity
- better sleep and relaxation
- boosts in immunity
- increased gut health
- meal replacement and weight management
- sports performance improvement
Functional beverages are appealing to those who want to make small changes for big results. Consumers also increasingly want and expect products with “better-for-you” attributes that are perceived as more nutritious or healthful. “Better-for-you” traits seen in many functional beverages include clean labels, natural/organic ingredients, reduced or eliminated sugar and calories, and vegan/plant-based designations.
Packaged Facts’ May 2023 National Online Consumer Survey indicates that 38% of adult consumers agree that they purposefully seek out beverages with ingredients that are designed to or claim to improve overall health or specific body functions, while 41% are willing to pay more for these functional beverages. Though some functional beverages are more niche than the most popular category of sports and energy drinks, there is clearly strong appeal for beverages with functional ingredients.
According to Packaged Facts’ new report Functional Beverages: Market Trends and Opportunities
, sales of functional beverages posted rapid gains (an average annual rate of 13.5%) from 2020 to 2022, buoyed by increased consumer awareness and adoption as pandemic trends also lifted grocery sales to faster than average growth. The US functional beverage market is projected to continue growing, reaching $78.5 billion in 2027.
This Packaged Facts report analyzes the dynamics of the current landscape of the functional beverage market. Consumer demographics, perceptions, motivations, and behavior pertaining to beverages and attitudes on food, diet, health, and product packaging are taken into account. Effects of the COVID-19 pandemic on consumers are also analyzed in a broad sense, as well as in the context of seeking out functional beverages.
Functional beverages are segmented by the following product categories:
- Energy and Sports Drinks
- Functional Carbonated Drinks
- Functional Coffees and Teas
- Functional Dairy and Dairy Alternative Beverages
- Functional Juices
- Functional Waters
- Nutritional Shakes, Protein Drinks, and Meal Replacements
- Other Functional Beverages
Sales include both ready-to-drink (RTD) versions that are bottled or canned and beverage powders. This report also includes functional dry coffee and tea that are brewed with water to become functional beverages.
This report includes sales of the above items from:
- Grocery stores, supermarkets, and discount grocers (e.g., Kroger, Safeway, ALDI)
- Mass merchandisers (e.g., Walmart, Target, Meijer) and warehouse clubs (e.g., Costco, Sam’s Club, BJ’s)
- Convenience stores (e.g., Pilot/Flying J, Circle K, 7-Eleven) and dollar stores (e.g., Dollar General, Family Dollar)
- Other retailers, such as gift stores
- All online outlets, including online-based grocers (e.g., Amazon, Thrive Market, FreshDirect, Boxed), third-party pack-and-deliver companies that use their own workforces to purchase groceries at various stores and deliver them to customers (e.g., Instacart), brands that sell their own food products via their websites, direct-to-consumer, and online sales from websites or apps of retailers in the previous categories
Historical numbers for the retail functional beverage market are provided from 2017 through 2022. Market forecasts are provided from 2023 through 2027. The reasons for and implications of shifts in consumer perception and behavior are analyzed in the context of future market opportunities.
Additionally, the report has dozens of tables highlighting numerical survey data on consumer demographics and psychographics and numerous marketing photographs. This report goes in-depth on COVID-19 and inflation trends that have affected the food and beverage market. Particular attention is dedicated to the market impact of e-commerce and the coronavirus pandemic.
About Packaged Facts
Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer demographics and shopper insights, the food and beverage market, consumer financial products and services, consumer goods and retailing, and pet products and services. Packaged Facts also offers a full range of custom research services. Reports can be purchased at our company website and are also available through MarketResearch.com.
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SOURCE Packaged Facts