The South American functional beverage market is projected to record a CAGR of 8.75%, during the forecast period (2020-2025).
- South American countries are witnessing growing urbanization and changing lifestyles due to globalization, and this, in turn, is driving the demand for convenience and packaged foods comprising healthy ingredients, thus, boosting the market.
- Consumers in South America have a greater understanding of the relationship between diet and health, which is fueling the growth in the industry.
Key Market Trends
Flavor Innovations Leading to the Growth of the Market
Consumers are increasingly drawn to the health benefits available through functional beverages. Although gut health and functional foods 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.
Brazil Holds a Major Share in the Market
The functional beverage market in Brazil is benefited by the strong economy and health consciousness in the country. The ageing population is fueling the demand for functional beverages, to prevent or overcome health conditions. 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 food, including ready-to-eat products, fruit juices, and coffee. Chocolate-based flavored drinks have seen a growth in the market and are anticipated to boost the overall market. Energy drinks are the fastest-growing subcategory in functional beverages, recently standing out with leading brands developing the overall category and is expected to show strong growth over the forecast period.
The South American functional beverage market is a competitive market with the presence of various major players in the market. 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 a lucrative packaging style. The major companies are located in all regions and the major countries of those regions. The most active companies in the functional beverage market include PepsiCo, Danone, Coco-Cola, and Red Bull.
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