Functional Beverages: Industry Analysis by Divya Bhatia, Welingkar Institute, Mumbai
INTRODUCTION The first functional beverage which was launched was to hydrate the body. But today large numbers of functional beverages are available for various lifestyle problems ranging from anxiety to sleep to weight loss etc. Coca Cola’s Shock and Red Bull were the early entrants in the industry and are the ones who give chance to late entrant to think about the industry.
market by carbonated drinks. The industrial trend is changing; the consumption of carbonated drinks is decreasing while that of functional beverages is increasing. The industry can be broadly divided into four market segments: Hydration:
Antioxidants, vitamins and fruit extracts are the
Functional beverages can be defined as ready to drink formulation with ingredients such as herbs, vitamins, minerals, amino acids and raw fruits to provide additional health benefits beyond nutrition. Various products which are categorized as functional beverages are sports drinks, energy drinks, ready to drink tea and coffees, yoghurt, fruit/ vegetable smoothies and even enhanced water. These functional beverages satisfy need of consumers of hydration, energy, enjoyment or simply having fun. The global functional beverages market grew by 3% in 2010 to reach a value of $48,186 million. In 2015, the global functional beverages market is forecast to have a value of $62,151 million, an increase of 29% since 2010. Projections for functional beverages are that market will grow by 103% in between 2010 and 2015 and total annual sales exceeding $78 billion in 2015. The Indian functional Beverage Industry was estimated to be around Rs 11,159 crores in 2010 with a CAGR of 21% in the last five years. It is expected that the industry will cross Rs 19,000 crores sales in 2015. Functional beverages are becoming popular due to their specific health benefits and are appealing to consumers because of changing lifestyles. Consumers purchase these products for both convenience and specific health benefits. FUNCTIONAL BEVERAGE INDUSTRY Functional beverages sector can be said to be subsector of non-alcoholic industry and is fastest growing sector. The faster growth of sector is also because of saturation of
Pratibimb | September 2012 | 7
ingredients which hydrate both inner and outer side of skin. The various vitamins commonly found in energy drinks for their specific benefits are:
B vitamin: For energy metabolism
E vitamin: Has antioxidant property
C vitamin: To activate people
Gatorade is well known hydration drink for athletes. Energy and rejuvenation Red bull, Adrenaline rush, 180 and many more are highly caffeinated and high energy drinks. These drinks include stimulants such as taurine, caffeine, sugars, anti -oxidants and creatine. Although these ingredients are approved by FDA, some health experts still say that all these ingredients are not beneficial to health. Health and wellness: This segment is about the health conscious people. So they have introduced less sugar and less caloric beverages to