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What are the latest figures on the functional beverage additives market’s size and projected CAGR?
The functional beverage additives market size has grown rapidly in recent years. It will grow from $17.54 billion in 2024 to $20.11 billion in 2025 at a compound annual growth rate (CAGR) of 14.6%. The growth in the historic period can be attributed to the rise of probiotic and prebiotic beverages, increasing demand for beverages that support digestion and immunity, growth of the wellness industry, growing demand for energy-boosting beverages, and rising popularity of plant-based functional beverages.
The functional beverage additives market size is expected to see rapid growth in the next few years. It will grow to $34.29 billion in 2029 at a compound annual growth rate (CAGR) of 14.3%. The growth in the forecast period can be attributed to increasing consumer interest in gut health, growing popularity of low-sugar and low-calorie drinks, growing interest in beverages that boost mood and reduce stress, and growing consumer awareness about the importance of a balanced diet. Major trends in the forecast period include technological advancements in ingredient formulation, innovations in beverage formulations, development of new delivery systems for functional additives, collaborative partnerships between beverage manufacturers and ingredient suppliers, and development of drinks with mood-enhancing properties.
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Which Market drivers have played a significant role in driving the functional beverage additives market?
Growing demand for natural ingredients is expected to drive the functional beverage additives market. Natural ingredients are substances derived from plants, animals, or minerals through minimal processing and without synthetic or artificial additives. Natural ingredients are rising due to increasing consumer demand for clean-label, health-focused, and eco-friendly products driven by growing awareness of wellness and sustainability. Functional beverage additives enhance the appeal and efficacy of natural ingredients by preserving their nutritional value, improving flavor profiles, and ensuring product stability, making them more suitable for modern consumer demands. For instance, in May 2023, according to the Organic Trade Association, a US-based non-profit organization, the U.S. organic food market reached $61.7 billion in sales in 2022, marking a 4.4% increase compared to $59.1 billion in 2021. Notably, organic beverages emerged as the second highest-selling category among organic products, accounting for $9 billion in sales, reflecting a 4% increase. Therefore, the growing demand for natural ingredients is driving the growth of the functional beverage additives market.
What are the key segments within the functional beverage additives market?
The functional beverage additives market covered in this report is segmented –
1) By Type: Kola Nut Extract, Hop Flower Extract, Guarana Extract, Other Types
2) By Application: Energy Drinks, Nutritious Drinks, Other Applications
3) By Distribution Channel: Supermarkets And Hypermarkets, Drug Stores and Pharmacies, Convenience Stores, Online Retail Stores, Other Distribution Channels
Subsegments:
1) By Kola Nut Extract: Caffeine-Enriched Extract, Organic Kola Nut Extract, Powdered Kola Nut Extract
2) By Hop Flower Extract: Bittering Hop Extract, Aroma Hop Extract, CO2 Extracted Hop Oil
3) By Guarana Extract: Pure Guarana Extract, Blended Guarana Extract, Encapsulated Guarana Extract
4) By Other Types: Green Tea Extract, Yerba Mate Extract, Ginseng Extract
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Which key players are shaping the functional beverage additives market?
Major companies operating in the functional beverage additives market are The Coca-Cola Company, Evonik Industries AG, Otsuka Holdings Co. Ltd., Ajinomoto Co. Inc., Kerry Group plc, Ingredion Inc., PepsiCo Inc., Glanbia plc, Roquette Frères, BASF SE, Sensient Technologies, Kemin Industries, Balchem Corporation, Glanbia Nutritionals (NA) Inc., Nexira India Private Ltd., Ybbstaler AGRANA Juice GmbH, Knowde, Sabinsa Corporation, ABITEC Corporation, Icon Foods Inc.
Which transformative trends will shape the functional beverage additives market landscape?
Major companies operating in the functional beverage additives market are focusing on developing innovative products, such as nutrient-rich beverages, to meet growing consumer demand for health and wellness products. Nutrient-rich beverages are formulated with additives like vitamins, minerals, probiotics, and natural extracts to support immunity, energy, hydration, and overall well-being. For instance, in February 2023, Kyowa Hakko USA, a US-based biotechnology company, introduced CENTR Enhanced sparkling water, a functional beverage that contains its Cognizin citicoline along with a combination of nootropic and adaptogenic compounds. This sparkling water not only provides refreshing hydration but also delivers functional benefits that help individuals manage stress and mental clarity. The carefully selected ingredients combine to create a drink that is both functional and enjoyable, appealing to consumers seeking a healthier, more mindful lifestyle with enhanced mental performance and adaptability.
How do regional factors impact the functional beverage additives market, and which region is the largest contributor?
Asia-Pacific was the largest region in the functional beverage additives market in 2024. The regions covered in the functional beverage additives market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
What Does The Functional Beverage Additives Market Report 2025 Offer?
The functional beverage additives market research report from The Business Research Company offers global market size, growth rate, regional shares, competitor analysis, detailed segments, trends, and opportunities.
Functional beverage additives refer to ingredients specifically added to beverages to improve their health benefits, functionality, or overall appeal. They are used to enhance nutritional content, improve flavor and texture, extend shelf life, and deliver health benefits such as boosting immunity, supporting digestion, and providing energy.
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