Natural Trend Behind Functional Drinks Growth

Posted by Josette Dunn on 17th March 2010

Global use of functional ingredients in beverages grew by 3% in 2008, taking consumption to 26.5 billion litres with a retail value of €64 billion, according to the new Global Functional Ingredients report from leading drinks consultancy Zenith International.”Increasing health consciousness, obesity concerns and lifestyle choices along with an ageing population have been the main market drivers,” commented Zenith Market Intelligence Consultant and functionaldrinks Editor Jenny Foulds. “Yet the market is showing signs of polarising between highly targeted products on the one hand and ‘softer’ less directly functional products on the other.

“Online social networking has helped spur the category forwards, enabling manufacturers to address consumers individually,” added Jenny Foulds. “Naturalness, provenance, convenience and indulgence have also had a major impact, allowing producers to try new formats, formulations and flavours,” she continued.

Further key findings from the 2009 Zenith Report on Global Functional Ingredients report include:

* Sports drinks had a leading 42% volume share in 2008, followed by enriched beverages on 37%, energy drinks on 15% and nutraceuticals on 6%.
* Energy drinks and nutraceuticals achieved the highest growth in 2008, both by double figures.
* North America has spearheaded functional drinks growth, gaining a 41% share in 2008.
* Asia and West Europe were the next two biggest markets with 30% and 17% respectively.
* The three smallest markets of East Europe, Africa & Middle East and Latin America made higher gains of 16%, 14% and 8%, and are expected to continue increasing their share.

Looking to the future, whilst technological advances have been made in rendering previously inaccessible ingredients suitable for use in beverages, there are still many further development opportunities. Similarly, many consumers remain sceptical and more effort is needed to provide meaningful information. A more disciplined regulatory environment, particularly in the EU, may help quell unsubstantiated claims, but this also puts added pressure on manufacturers.

Challenges aside, the functional drinks category has already proven its resilience to the economic downturn and the industry is increasingly resourceful in its use of ingredients, with former by-products such as whey protein gaining recognition. Zenith therefore anticipates that the global market for functional ingredients in beverages should reach 35 billion litres by 2013.