The Asia-Pacific functional beverage market is projected to record a CAGR of 7.5% during the forecast period (2020-2025).
- The Asia-Pacific functional beverage market is witnessing strong growth, due to the availability of various innovative varieties of functional drinks and growing demand from the millennial population.
- The busy lifestyle of the growing urban middle-class population in the region and the lack of energy and nutrients in an individual’s diet are driving the functional beverage market.
- The demand from the Chinese and Japanese markets is fueling the market growth in this region. India is expected to be one of the fastest-growing markets in Asia-Pacific. The market was led by energy drinks, followed by sports drinks.
Key Market Trends
Flavor Innovations in the Market
Consumers are increasingly drawn to the health benefits available through functional beverages. Although the gut health and functional foods phenomenon have impacted all aspects of the menu, the beverage category holds the biggest opportunity for flavor innovation. This blends the beverage industry with vitamins and supplements, allowing nutrient-dense ingredients, such as kale and turmeric, to find a natural home. Innovations in the flavor industry have made flavor ingredients, such as natural isojasmone and natural hibiscus extract liquid possible, which provide a much more accurate and much more flavorful version of floral flavor for use in products ranging from functional juice blends and enhanced waters to energy drinks.
China Holds the Major Share in the Market
The Chinese functional beverage market is growing, owing to the domestic and international companies that are launching new products, in order to occupy more market share in a fiercely disputed market. The busy lifestyle, coupled with the growing urban middle-class population in the country, is also boosting sales. An increasing number of enterprises are finding China as a promising market for functional beverage, and are, therefore, launching new products in the market. For instance, French food manufacturer, Danone, is offering a new vitamin beverage called Mi-PRD to traders in China. Energy beverages are getting popular, among people who look for specific health benefits from their food or drink.
The Asia-Pacific functional beverage market is a fragmented market with various players operating across segments. Due to the high growth potential in the region, most companies are trying to extend their presence in the market. Product pricing is another strategy adopted by companies. The growth of a company in the functional beverage industry in the future depends on its distribution channel and innovation in its product list with lucrative packaging style.
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