The European functional beverage market is projected to record a CAGR of 6.5% during the forecast period (2020-2025).
- The growing number of health-conscious consumers and their demand for health-based ingredient containing products are fueling the European functional beverage market.
- Companies are taking measures to adapt their products to EFSA requirements. However, the process for regulatory approval is slow for health claims, owing to a heavily regulated market. Consequently, there is a huge problem for small innovative beverage companies in Europe.
Key Market Trends
Flavor Innovations Leading to the Growth of 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.
Germany Holds the Major Share in the Market
The functional beverage market in Germany is benefited by the strong economy and health consciousness in the country. The ageing population is fueling the demand for functional beverage, to prevent or overcome health conditions. They consider functional beverage as the ‘meal bottle’. Consumers in Germany tend to buy less often. However, they do demand high-quality products, including organic and health and wellness food products. The increasing number of single households and a growing mobile society are changing the food and beverage consumption pattern in favor of the convenience food industry. Thus, there is a rise in the demand for convenient foods, including ready-to-eat products, fruit juices, and coffee.
The European 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.
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