The functional beverage market in the United States has developed beyond being a niche category of drinks meant for better health and well-being. New functional beverages (such as sports drinks, ready-to-drink tea, and designer water) have added a new dimension to the earlier definition, with an increased emphasis on convenience, novelty, fun, and image while maintaining their status as a "healthy drink." Of these new categories, some are already established functional varieties undergoing transformation, some are based on discoveries of new ingredients, and some blur the line between categories. This wide variety has grown to appeal to almost all types of consumers that have now become extremely taste- and ingredient-conscious as well as more sophisticated about their overall food consumption.

Research examines the market for the following categories of functional beverages in the United States: sports and performance drinks, energy drinks, ready-to-drink tea, enhanced fruit drinks, soy beverages, and enhanced water. The research provides exhaustive analysis of key factors influencing market positioning besides providing detailed revenue forecasts and in-depth assessment of the competitive landscape.

Functional Beverages Business Opportunity

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The need for physical fitness and mental well-being is the key element behind the phenomenal growth of the functional beverage industry in recent times. Medical endorsement of exercise, nutrition, and stress management has caused significant changes in lifestyle and buying habits, with people increasingly preferring food products that improve health. Functional beverage companies provide healthy drink choices that match a particular behavior of their customers, and hence, are convenient to add to their lifestyle.

"Today’s sophisticated beverage buyers expect more out of their functional beverages. Besides having a great taste and being thirst quenching, they want to experience real health benefits that can be measured," says the analyst. "As new diets emerge with different recommendations on nutrition, market participants can highlight their product’s value with infinite possible combinations," she adds. Their easy availability not only through health establishments but also through natural food markets, restaurants, health clubs, spas, and wellness retreats means that consumers can easily purchase a beverage for immediate need and consumption – for instance, having an energy drink in a bar or a sports drink at a gym.

Functional Beverages Business Opportunity

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The functional beverages market has evolved to become a mainstream segment, progressing from one that was once dominated by the small start-ups to one that is currently being controlled by big beverage companies. "The success of functional beverages has increased the market participation of big beverage giants that both threaten and benefit the smaller participants," says the analyst. "Many conglomerates have created their own line of functional beverages, but of late, the trend is to merge with or acquire a proven functional beverage company," she adds. Even after such metamorphosis, new entrants continue to throng the market, relying on potential herbal enhancements or new discoveries in food science.

Since the entire consumer market is currently just learning about the range of choices, there is no limit to the new product lines that can be formulated. These developments have intensified the competition for shelf space. Big beverage companies often supplement an existing product line with better cost control, product promotion, and distribution networks. However, the creative aspect is still in the hands of originators with large companies taking a risk on a merger or acquisition only after a brand proves its staying power and consumer loyalty.

Functional Beverages Business Opportunity

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