The world is experiencing a widespread shift is consumer habits relating to consumption of beverages. Previously, carbonated drinks were the most popular and frequently consumed beverage. However, the trend has changed, and the focus is now towards the global market for flavored and functional water. According to a report published by Persistence Market Research (PMR), the global flavored and functional water market amounted US$17.2 billion in 2012. The in-house analysts at PMR expect the market grow at a healthy CAGR of 11.5% during the period of from 2013 to 2019 reaching an anticipated value of US$36.7 billion by 2019.
Obesity is increasingly becoming a challenge in many regions around the world. Rising concerns about health and wellbeing has compelled consumers to look for healthier alternatives to carbonated drinks. Flavored and functional water, being one of the replacements for carbonated drinks, is witnessing an exponential surge in the demand, thereby stimulating the global market.
The rising urban population base is the major driving force behind the growth of the global flavored and functional water industry, as it is the biggest consumer base for flavored and functional water catering to the health concerns about well-being and beauty. According to the United Nations, the urban population would be around 6.3 billion by 2050.The figure was 3.4 billion in 2009.
Flavored water and functional water are two key components of this global industry. Flavored water is basically a blend of concentrated fruit juice, natural flavors, mineral water, and either natural or artificial sweeteners. Strawberry, orange, apple, and blackberry are some commonly used fruit concentrates to produce flavored water. On the other hand, functional water contains additives such as oxygen, minerals, herbs, and vitamins.
As the global flavored and functional water market carves out a niche, let’s take a look at the most recent trends in the market:
Flavored water has much wider penetration than its functional counterparts in the global beverage spectrum. However, the trend is expected to be reversed owing to the rapid growth in the functional water market.
The biggest consumers of the flavored and functional water were the U.S., France, Germany, Japan, and Italy in 2012. The market in Asia Pacific has registered robust growth in 2012, making it a strong contender for other regional markets.
Citrus flavored water is the most demanded variant in the global flavored water market. However, berry and mixed fruit flavored variants are also demonstrating strong presence.
The market for flavored and functional water runs very much in line with the trend to consuming ‘on the go’. Convenience outlets are generating high margins for manufacturers and retailers. Still, manufacturers constantly need to add special value to their products in order to nurture their brands.
Overall, the future of the flavored and functional water market appears optimistic in terms of both, value and volume. The concept of flavored and functional water offers beverage market participants the opportunity to capitalize on the demand for healthy substitutes of carbonated from various consumer groups as well as encashing the willingness of young consumers to experiment with products that provide a reliable health benefit.