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Functional Water Market Size, Share and Global Trend By Ingredient (Micronutrients, Botanical Extracts), Distribution Channel (Supermarkets/ Hypermarkets, Convenience Stores, Online Retail) & Geography Forecast till 2025

Region : Global | Latest Update: Aug, 2019 | Published Date: May, 2019 | Report ID: FBI100279| Status : Published

 

KEY INDUSTRY INSIGHTS

The Global Functional Water Market, which was valued at US$ 10.34 Bn in 2017, is projected to reach US$ 18.24 Bn by the end of 2025, exhibiting a CAGR of 7.4%. Healthy hydration, affordably nutritional, and refreshingly thirst-quenching attributes of functional water are some of the major growth pillars in the global marketplace. There has been a rapid evolution in hydrating experience – water ensuring sleep quality and water for the body-detox are some of the interesting innovations in this category. Functional beverages as a whole have robustly emerged as a preferred drink as compared to soft drinks that contain added sugars and a host of synthetic additives such as colors, flavors, and preservatives.

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Functional water sales are thus benefitting from the overarching consumer trend to better-for-you alternatives such as unnatural and high-sugar drinks. Price still remains the major factor influencing the purchasing patterns of all the functional beverages including enhanced water, however, brands justifying their premiumised offerings with the host of label claims are expected to fetch higher sales margins. The innovation in bottling (packaging) technology, coupled with strengthening retail distribution scenario, is further facilitating the market for functional water. 

Minerals are Usually Incorporated in Bottled Water – Botanical Extracts Are Expected to Witness Increased Incorporation

The enhanced waters are generally micronutrients-fortified, hence a dominating segment. Nonetheless, the utilization of novel ingredients is gaining traction. The global marketplace has witnessed growing inclination towards all-natural and plant-based ingredients that are easily recognizable and accepted owing to their widely known health benefits. The active principles from a variety of super fruits, herbal extracts, and other plant-based ingredients are known to not only serve the functional role of synthetic additives but also substantially increase the nutritional profiles of specialty water 

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Mass Merchandisers Dominate the Global Retail Distribution, Convenience Stores and Online Retailing Are Set to Witness Rapid Growth.

Mass merchandisers viz. supermarkets and hypermarkets hold sway in the distribution channels for functional water sales – this retail distribution is leading based on the variety, availability, and accessibility of enhanced water. Moreover, the bundling strategy and economic pricing is responsible for higher sales of functional water among mass merchandisers. Convenience stores and online retail are expected to witness greater traction in the foreseeable future owing to their penetration and personalized purchasing experiences.

Asia Pacific Functional Water Market, 2017 to 2025

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Developed Market of North America holds a Lion Share Propelled by Promising Sales Growth in the United States – Asia Pacific Region is set to Witness Fastest Growth Rate during 2018-2025

The developed market of North America is a clear leading region for functional water sales owing to its robust growth in the United States. The sales of bottled water have recently surpassed soft drinks sales in the United States and the bottled water sector is thus a leading horse prompting companies to invest and expand their functional offerings. The functional hydration experience has now become a key focus for the majority of soft drinks giants which are either innovating on the composition of the product or creating a context where consumers are lured to purchase it.

Asia Pacific market for functional water is also set to experience significant growth rate as consumers are becoming increasingly aware of the benefits of specialty offerings of which functional water is quickly emerging as a distinct and recognizable category. Consumers look for better-for-you alternatives to carbonated soft drinks (CSDs) and the innovation in flavor is driving the bottled water category’s success.

The Functional Water Market is Moderately Consolidated among Key Global Players of Non-alcoholic Beverages Sector – Regional and Private Label Brands are expected to flourish in the Foreseeable Future.

The global market for the functional market should be understood from its parent/related markets viz. functional beverages and bottled water – both of these sectors exhibit strong dominance of key global brands intensely seeking the consolidation of the overall market. Nonetheless, the bottled water sector remains less heavily concentrated with a number of smaller, independent, and niche brands exercising significant dominance in their home markets. The functional water market is also experiencing a strong emergence of small private-label brands embarking on offering enhanced convenience and value-for-money.

Portfolio expansion i.e. new product development remains one of the most preferred strategies in the global functional water market. The consumers are exhibiting ever-growing inclination towards exotic ingredients and bold flavors that not only appeal the palette but also are functional in terms of the overall nutritional profile. In February 2019, The Coca-Cola Co. added two new additions (Smartwater alkaline and Smartwater antioxidant) to its Smartwater brand.  

 Companies such as Danone S.A. are channelizing their efforts towards developing markets of Asia Pacific where it expects a double-digit growth rate of functional water sales performance, particularly in the countries such as China, India, and Indonesia.

The companies are also capitalizing on packaging level innovation to create enhanced aesthetic appeal - LIFEWTR, premium water brand of PepsiCo, announced it is championing Art through Technology in March 2019 as its seventh design series.

REPORT OVERVIEW

The functional water market report analyses the global demand sentiments of enhanced water – a rapidly emerging segment within the bottled water space. Functional/Enhanced/Value-added water is a category of bottled water which is infused or fortified with functional ingredients or modified in terms of chemical composition that makes it superior in terms of nutrition as compared to plain packaged water bottles. Although majority of bottled water available in retail space is fortified with minerals, the global marketplace is set to witness evolution in terms of ingredients that are added to increase the overall value, resulting in premiumised offering. The sustainable future of functional water will rely on the ability of this product to hydrate, refresh and, offer a value-added function that enhances its sale-ability.

The report provides qualitative and quantitative insights on the functional water industry and detailed analysis on the market size & growth rate for all possible segments in the market. The market is segmented by ingredient and distribution channel. On the basis of ingredient, the global functional water market is categorized into micronutrients, botanical extracts, and other functional ingredients. Based on the distribution channel, the market is segmented into supermarkets/ hypermarkets, convenience stores, online retail, and others. Geographically, the market is segmented into four major regions, which are North America, Europe, Asia Pacific, and the Rest of the World (Row). The regions are further categorized into countries.

Along with this, the report provides an elaborative analysis of the market dynamics and competitive landscape. The report offers various insights on the overview of related markets, recent industry developments such as mergers & acquisitions, the regulatory scenario in key countries, and key industry trends.

KEY SEGMENTS WITHIN THE MARKET

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SEGMENTATION

 SEGMENTATION

 DETAILS

By Ingredient

·         Micronutrients

·         Botanical Extracts

·         Other Functional Ingredients

By Distribution Channel

·         Supermarkets/ Hypermarkets

·         Convenience Stores

·         Online Retail

·         Others

By Geography

·      North America (U.S., Canada, and Mexico)

·      Europe (Germany, France, Italy, UK, Russia, and Rest of Europe)

·      Asia Pacific (Japan, China, India, Australia, and Rest of Asia Pacific)    

·      Rest of the World (Brazil, UAE, South Africa, and Rest of the World)

KEY COMPANIES COVERED IN THE REPORT

  • PepsiCo
  • The Coca-Cola Company
  • Groupe Danone
  • Dr Pepper Snapple Group Inc.
  • Nestle S.A.
  • Allure Organics
  • Tata Global Beverages
  • The Alkaline Water Co.
  • Nirvana Water
  • Balance Water Company LLC.

KEY INDUSTRY DEVELOPMENTS

  • In June 2019, All Market Inc. (AMI) through its brand, Vita Coco launched a new canned water line, Ever & Ever. The product is reverse osmosis water with added electrolytes for balance.
  • In February 2019, SmartWater, a brand of The Coca-Cola Co., introduced two new additions to its lineup: SmartWater alkaline and SmartWater antioxidant. Like the original SmartWater, both new products are vapor-distilled water with added electrolytes.
  • In February 2019, Middle Eastern mineral water giant Agthia Group launched Al Ain Zero Bromate drinking water, suitable for pregnant women and patients with kidney issues

Functional Water Market Size, Share and Global Industry Trend Forecast till 2026
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