Global functional waters sector to double by 2020

Driven by consumers’ desire for optimal health and wellness, the global market for functional waters surged ahead in 2015, rising an estimated 12 percent in volume to 5.5 billion liters and 11% in value to US$12 billion, according to a report from Zenith International. The market is forecast to double over the next five years, primarily driven by rapid growth in Asia Pacific.

The “Flavoured-Functional Water Innovation Report 2016" identifies nine key areas of focus for new product development initiatives since 2013—natural ingredients, natural sweeteners, diversified flavors, energy waters, beauty and wellness waters, vitamin waters, protein waters, innovative functionality and minimalist packaging.

According to the report, still water dominates the flavored functional water market, accounting for 90% of global volume. The top 3 brands are Mizone from Danone, Glacéau Vitaminwater from Coca-Cola, and Propel from PepsiCo. Consumption per person is highest in North America, Asia Pacific and West Europe, while China, Japan and the United States lead in terms of volume by country.

“Functional waters provide added benefits for health-conscious consumers at a substantial price premium for the industry," said Richard Hall, Zenith chairman. “The most common added ingredients are vitamins and minerals alongside herbs and fruit flavors. These are generally combined to provide a targeted package of taste, convenience, and lifestyle with a wellbeing appeal."

Beverage fortification is hardly new; the industry has been adding vitamins A and D to milk for generations, and it’s been years since orange juice began surpassing milk—for some consumers, at least—as a primary source of calcium. But now that traditional vitamins and minerals are a given in good-for-you drinks, consumers want more; they are looking for nutrition that goes above and beyond the status quo—be it extra nutrition or condition-specific benefits.

Download INSIDER’s free “Beverages with Benefits" digital issue to find out more.