Functional soft drinks emerging as strong category

- Last updated on GMT

Related tags: Nutrition, Zenith

West Europe's functional soft drinks sector has become a force to
be reckoned with, shows a new report, with nutraceuticals showing
the fastest growth of all categories.

Drinks consultancy Zenith International, which has tracked another 8 per cent growth in functional drinks during 2003 to 3,780 million litres, shows that nutraceuticals are the fastest growing segment, albeit from a low base.

These products, which contain targeted ingredients considered to provide specific medical or health benefits, only make up 3 per cent of the overall functional soft drinks sector, but saw volume rise 39 per cent in 2003.

Sports drinks also demonstrated strong double figure growth, up 27 per cent in the year.

"Functional soft drinks are small when compared with the scale of mainstream categories. Yet they offer the potential of moving beyond customer satisfaction to a new level of consumer commitment,"​ commented Zenith research director Gary Roethenbaugh.

He noted that major soft drinks manufacturers are increasingly turning to 'added functionality' as a means of enlivening mainstream products, with smaller players using functionality to differentiate their product offerings.

At the same time, health and well being have become critical public policy issues, as the world tackles an obesity epidemic and its associated health concerns, providing a further driver of growth.

"Since the 1990s, consumer behaviour and attitudes have changed,"​ added Roethenbaugh. "Our interaction with the media and our relationship with brands have become more personalised. This lends itself to a more fragmented marketplace and one in which functional soft drinks can flourish."

Many challenges remain, such as effective marketing communication, the need for consumer education and intense competition to secure distribution. But the fundamental importance of health and well being should pave the way for continued functionality growth.

By 2008, Zenith anticipates that total functional soft drinks sales across West Europe will have risen by at least a further 1,000 million litres.

Related topics: Markets, Soft Drinks & Water

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