Global Flavored and Functional Water Market - Insights
Flavored water can be described as purified or mineral water infused with different flavors, fruit extracts, and sweeteners. Functional water is fortified with vitamins, minerals, amino acids, herbal extracts such as licorice extracts and others, in order to make it healthier and for functional benefits such as aiding in improving immune system, lower cholesterol levels, improved digestion, and weight management. Increasing health consciousness as well as increasing consumer awareness of benefits of consumption of vitamins and minerals such as bolstering immune system is driving growth of the global flavored and functional water market.
Furthermore, growing demand for bottled and packaged water due to its advantages such as safety and convenience is fuelling growth of this market. According to the International Bottled Water Association, consumption of bottled water increased by 7.9% in 2015 as compared to previous year in the U.S.
Low calorie and unsweetened flavored and functional water is gaining traction, owing rise in health concerns such as obesity and diabetes. According to World Health Organization, in 2016, 39% women and 39% men were overweight globally. Furthermore, according to Organization for Economic Co-operation and Development (OECD), obesity update 2017, global obesity levels are expected to increase steadily by 2030, thereby increasing demand for low calorie and low sugar drinks.
Launch of new flavors and products is bolstering growth of the global functional and flavored water market. For instance, in January 2018, JUST launched a line of flavored water including organic apple cinnamon organic lemon and organic tangerine. Also, Coco-cola Company added new flavors such as pear kiwi and pomegranate blueberry in its Dasani flavored water brand in March 2018. However, availability of low cost carbonated drinks is hindering growth of the global flavored and functional water market.
The global flavored and functional market was valued at US$ 29.01 billion in 2017 and is anticipated to register a CAGR of 11.98% in terms of revenue, over the forecast period (2017 – 2025) to reach US$ 70.32 billion by 2025.
Figure 1. Global Flavored and Functional Water Market Share, By Region, 2017
Source: Coherent Market Insights (2018)
North America dominated the global flavored and functional water market and held revenue share of 33.48% in 2017. This is attributed to significant consumer demand for beverages. According to the Centers for Disease Control and Prevention, 49.3% of the U.S. adults consumed atleast one sugar sweetened beverage including flavored water, juices, and others in a day between 2011 and 2014. Furthermore, rise in health awareness is increasing demand for functional beverages in this region. According to the U.S. Department of Agriculture, the functional food market, which includes functional water was valued at US$ 3 billion in 2016 and is growing rapidly, due to increasing awareness of benefits of functional food and beverages.
Asia Pacific flavored and functional water market is growing rapidly, owing to increasing health awareness among consumer along with rising awareness of benefits of consumption of functional beverages such as improved immunity system among others. Manufacturers are launching innovative products, owing to increasing demand for flavored and functional water in Asia Pacific. For instance, in July 2017, NourishCo Beverages Ltd. launched Himalayan Orchard Pure flavored water and in October 2017, PepsiCo Inc., launched Aquafina Vitamin Splash in India.
Players operating in the global flavored and functional beverages market are adopting various strategies such as product development, collaborations and acquisitions to sustain in the competitive market. For instance, in February 2018, PepsiCo Inc. launched Bubbly, a brand of sparkling flavored water in different flavors such as apple, strawberry, and mango. In October 2017, The Coca-Cola Company acquired Topo Chico, a manufacturer of flavored water, for US$ 220 million. Also, in November 2016, Dr. Pepper Snapple (DPS) Group acquired Bai Brands, LLC, a beverage manufacturer, for US$ 1.7 billion.
Key players operating in the global flavored and functional water market are Nestle S.A., Danone S.A., Kraft Foods Inc., The Coca-Cola Company, PepsiCo, Inc., New York Spring Water, Hint Inc., Sunny Delight Beverages Company, Herbal Water, Inc., and Talking Rain Beverage Co.
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