Market Challenges And Opportunities

Global Functional Beverage Market Drivers:

Growing demand for plant-based and lactose-free products is augmenting market growth

Due to growing vegan population and increasing instance of lactose intolerance population there is a high demand for plant-based and lactose-free products. This is augmenting functional beverage market growth. In January 2020, 28 Black has released a taurine-, gluten-, and lactose-free premium energy drink manufactured in Germany. This energy drink is available in four flavors, Acai Berry, Classic, Sour Mango Kiwi, and Sour Cherry.

Increasing number of merger and acquisition in the market to uplift market growth

For instance, in June 2020, Nestle SA acquired a majority stake in Vital Proteins, which a maker of collagen bars, beverages, capsules, and powders. Hence, growing focus of key players to adopt various growth strategies in order to expand their market presence is propelling market growth.

Global Functional Beverage Market Opportunities:

Incorporation of traditional ingredients in the functional beverages is expected to offer potential growth opportunities. For instance, in December 2019, Los Angeles-based Better Booch, a maker of kombucha tea, recently released its eighth flavor: Hola Horchata. Also, Irvine, California based Good Culture LLC is rolled out Wellness Probiotic Gut Shots.

Emergence of CBD infused functional beverages is expected to bring bright market opportunities in the near future. For instance, in July 2019, Good Day, an innovative new beverage brand, announced the launch of its line of premium CBD-infused beverages designed to maintain balanced throughout every part of the day: Cold brew coffee for a boost of easygoing energy, Citrus sparkling water for mental and physical refreshment, and Chamomile herbal tea for enhanced relaxation and stress release.

Global Functional Beverage Market Restraints:

Ingredient-level health concern

There is concern associated with the consumption of functional beverages as energy drinks, fortified juices, RTD tea, and RTD coffee among consumer due to the health issues regarding the use of ingredients and their levels in the drinks. Also, there have been growing concerns regarding the addition of caffeine content, artificial ingredients, and sugar in most of the RTD tea and energy drink products

Varying regulations and labelling framework

Varying regulations offers a significant challenge to the globalization of functional beverages. Regulatory issues is a key hurdle factor for the growth of the functional beverage market. Moreover, there is a lack of proper approach to the term “functional beverage” that has led to the consumer confusion, inconsistent product claims, and also lawsuits against some companies for misleading consumers. However, implementation of proper regulations for functional beverage market will offer positive growth environment for the market.