FLAVORED AND FUNCTIONAL WATER MARKET ANALYSIS

Global Flavored And Functional Water market was valued at US$ 50.03 Bn in 2022, exhibiting a CAGR of 11.91 % in terms of revenue, over the forecast period (2023 to 2030) to reach US$ 123.11  Bn by 2030.

A significant part of our lives is water. In addition to improving the taste of water, including blood regulation, weight management, and hunger control. In addition, it works well in place of soda and other artificial drinks. Instead of drinking aerated, sugary artificial beverages, consumers are gravitating toward healthier choices. Due to customers' growing appetite for beverages with nutrients, the market for flavored and functional water is expanding. Functional and flavor-infused water is a nutritious beverage that gives you immediate energy. Health-related problems have noticeably increased as a result of rapid urbanization and a fast-paced lifestyle. As a result, customers are drawn to goods that are conveniently accessible and do not harm their health. Moreover, flavored and drinking water is easily accessible and comes in attractive packaging and bottles. As a result of meeting consumer demand, the market for flavoured and functional water is expanding more quickly.

Global Flavored And Functional Water Market- Impact of Coronavirus (Covid-19) Pandemic

The COVID-19 outbreak has majorly impacted the Global Flavored and Functional Water market, owing to the strict lockdown and stringent regulations, followed by the government, and thus there was a decrease in demand for flavored and functional water. Moreover, the production process of the Flavored and Functional Water is disrupted due to social distancing and a lack of manpower. In addition, the sales of bottled water are highest among all the nonalcoholic beverages as people across the world are stocking up the essential products including bottled water. There is an increase in the consumption of packed drinking water globally due to increasing health consciousness among consumers. The aforementioned factors are the key reasons for the growth of the flavored and functional water market over the forecast period.

Global Flavored and Functional Water Market - Growth Drivers

• Increasing obesity rate around the globe

Increasing obesity rate around the globe is predominantly fueling the market growth of flavored and functional water. In 2016, more than 1.9 billion adults, 18 years and older, were overweight. Of these over 650 million were obese. Moreover, 38 million children under the age of 5 were overweight or obese in 2019. Thus, growing obesity rate around the globe is projected to propel the market growth of flavored and functional water.

• Increasing adoption of healthy lifestyles among urban people

Rapid urbanization coupled with the increasing adoption of healthy lifestyles among urban people and thus they highly preferred flavored and functional water is propelling the market growth. According to the United Nations,  55% of the world’s population lives in urban areas, a proportion that is expected to increase to 68% by 2050. Projections show that rapid urbanization, the gradual shift from rural to urban areas, combined with the overall growth of the world’s population could add another 2.5 billion people to urban areas by 2050.

Global Flavored and Functional Water Market - Restraints

• Wider availability of substitute products such as soft and sports drinks

The market of flavored and functional water is facing a challenge from substitute products such as soft and sports drinks. Also, the strong distribution channel for such substitute products is hampering the demand for flavored and functional water, thereby hindering the market growth over the forecast period. In addition Shifting preferences of consumers toward flavored and functional water  is expected to witness the market growth in the upcoming forecast period.

• Lack of awareness regarding the health benefits 

Lack of awareness regarding the health benefits of such beverages across developing countries is expected to hamper the market growth of flavored and functional water. Also, balancing flavor and sugar quantity in the product is one of the major challenges for the functional water market. Inaddition the increasing healthy lifestyle among the urban people is expected to witness the market growth in the upcoming forecast period.

Market Opportunities

• Product innovation by manufacturers 

Product innovation by manufacturers is expected to bring new market opportunities over the forecast period. For instance, to offer health and wellness-focused hydration options in the ready-to-drink market in India, Tata Global Beverages Limited and PepsiCo India Holdings Private Limited collaborated to create NourishCo. It has also made a move into the flavoured water sector.

• Expansion of retail industry due to the development of various hypermarkets and supermarkets

Expansion of the retail industry due to the development of various hypermarkets and supermarkets across the Asia Pacific region is expected to offer lucrative opportunities to the market players of flavored and functional water. According to the India Brand Equity Foundation, the retail industry touched US$ 950 billion in 2018 at a CAGR of 13 percent and is projected to reach US$ 1.1 trillion by 2020. Thus, growth in the retail industry will favor market growth. For instance, in January 2019, the Canadian spring water company launched functional water. The new product is Flow Glow, a spring water brand infused with CBD. It hydrates and nourishes the cells to the fullest with naturally occurring minerals, powerful antioxidants, and the qualities of CBD

Figure 1. Global Flavored And Functional Water Market, By Product , 2022

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Market Trends

• Shifting preferences of consumers toward flavored and functional water

Shifting preferences of consumers toward flavored and functional water due to the growing health wellness trend is augmenting the market growth. Increasing disposable income coupled with the improving lifestyle of the consumers is propelling demand for premium products, thereby fueling the market growth of flavored and functional water. Moreover, the growing demand for this beverage among athletes as functional water possesses various health benefits that are further expected to foster market growth.

• Penetration of key players into a new market for business expansion

Penetration of key players into a new market for business expansion is a key trend in the market and this is expected to bolster the market growth. For instance, in August 2019, Bisleri ties with US co Minerva Group to tap the flavored water market. Bottled water major Bisleri, apart from launching enhanced water in the domestic market, has announced that it is entering the US market with flavored water and vitamin water.

Segment information:

By product segment, the Global Flavored and Functional Water Market is categorized into flavored water and functional water. The flavored water segment held the largest market share in 2022 and is further projected to grow at the highest CAGR during the forecast period owing to rising customer demand for beverages with added health benefits. Furthermore, several  such as fruit-flavored water, vegetable-flavored water, and herb-flavored waters, are included in the flavored water segment. Moreover, vitamin-infused water, energy water, and sports water are used to produce the functional water segment.

Global Flavored and Functional Water Market– Recent Developments

• In May 2021 - PepsiCo Inc., a leading international food and beverage company, introduced Soulboost, an improved sparkling water packed with useful components. The drink comes in two different flavors: Lift and Ease. Lift has 200 mg of ginseng to support mental endurance, while Ease has 200 mg of theanine to promote relaxation.
• In March 2021 – F&B Giant Nestlé S.A., announced it has acquired Washington-based Essentia Water, a premium functional water brand. The business is enhancing its portfolio to put more of an emphasis on luxury and mineral water brands from across the world as well as goods that help people stay hydrated healthily, such as functional water.
• In October 2022, According to the company, CENTR Brands Corporation has expanded its line of health and wellness products with the addition of CENTR Enhanced, a non-CBD functional sparkling water.
• In July 2022, three new organic flavors—Cherry, Citrus, and Elderberry—have been added to the Flow Vitamin-Infused Water line of products as part of Flow Beverage Corp.'s most recent product introduction.
• In March 2022, Nirvana Water Sciences Corp. presented its Nirvana HMB + Vitamin D3 spring water at Expo West in Anaheim, California. One of the newest items in the lineup is Nirvana HMB + Vitamin D3. It combines immunological support with muscle repair.
• The Coca-Cola Company joined hands with the South African company Gutsche Family Investments Pty Ltd. and alcoholic beverage manufacturer SABMiller to form Coca-Cola Beverages Africa, the biggest soft drink bottler in the area.
• In February 2020, BLNCD Naturals, the top CBD health and wellness company in Minnesota, collaborated with Big Watt Coffee to launch three enticing flavors of CBD sparkling water, breaking into the beverage market.

Global Flavored and Functional Water Market– Regional Insights

Asia Pacific held the largest revenue share of 44.50 % in the Global Flavored and Functional Water Market in 2022 and is expected to maintain its dominance over the forecast period. Furthermore, Asia Pacific region is projected to be the fastest-growing region in the global Flavored and Functional Water market during the forecast period. Moreover, due to rapid urbanization, lifestyle change, increase in disposable income, and rising demand to enhance the customer experience in China and India, the Asia Pacific market is anticipated to have the quickest rate of revenue growth.

During the forecast period of 2023–2030, North America is expected to experience the fastest market growth owing to increased demand for low-calorie and low-sugar beverages. In addition, the rise in consumer health consciousness, and the availability of a broad variety of flavors and useful components are driving North America flavored and functional water market growth.

Figure 2. Global Flavored And Functional Water Market, By Region, 2022

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Global Flavored and Functional Water Market – Key Players

Major players operating in the Global Flavored and Functional Water Market include Groupe Danone, Nestle SA, The Coca-Cola Company, PepsiCo, Hint Water, New York Spring Water, Kraft Foods, Balance Water Company, and Sunny Delight Beverages Company

*Definition: Flavored and functional water are beverages that contain additional substances such as artificial/natural flavors, minerals, vitamins, and sweeteners. Flavored water is a type of purified water with added flavors. It is a combination of mineral water with various fruit juices concentration.