Functional Beverages - US

Published by: Mintel International Group Ltd.

Published: Aug. 1, 2007 - 130 Pages

Table of Contents

Scope and Themes

What you need to know

Definition

Abbreviations and terms

Abbreviations

Terms

Executive Summary

Market at a glance

Factors influencing change

Category momentum

Coca-Cola and PepsiCo gain stronger foothold in the market

Supermarkets lose market share to mass merchandisers

Key consumer insights

Consumption of functional beverages by type

Key consumer groups

Consumer views on functional ingredients

Interest in new beverages

The future of functional beverages

Market Drivers

Consumer quest for better health through food and beverages

Figure 1: Attitudes regarding healthy eating, 2002-06

Increasing incidence of obesity—a growth driver

Figure 2: Percentage of population who are overweight or obese, 20-74 years of age, 1988-2004

Functional beverages—convenient nutrition

Figure 3: Reasons for buying functional beverages, September 2006

Enhanced/fortified beverages provide convenient and palatable delivery system for vitamins and minerals

Functional ingredients and claims—addressing specific health problems—pique consumer interest

Figure 4: Role of functional ingredients in consumer purchase decisions, May 2007

A boost of energy—a functional lifestyle choice

Figure 5: Purpose of drinking energy drinks, February 2007

Demographic influences

Women—more health-conscious than men

Figure 6: Health or lifestyle practices, by gender, May 2007

Figure 7: Functional beverages purchased for whom, by gender, May 2007

Figure 8: Population of women aged 18+, by age, 2002 and 2007

Boomers drive growth

Figure 9: Population aged 18+, by age, 2002-12

Inherent goodness of other beverages competes with functional drinks

Market Size and Trends

Market size

Figure 10: Total FDM* U.S. retail sales of functional beverages, at current and constant prices, 2002-07

Wal-Mart estimate

Figure 11: Number of regular stores and supercenters opened by Wal-Mart, FY 2001-06

Market trends

Figure 12: Number of functional beverage product introductions, 2002-07*

Figure 13: New functional beverage product claims, 2002-07*

Market Segmentation

Figure 14: FDM* sales of functional beverages, segmented by type, 2005 and 2007

Functional juice and juice drinks

Figure 15: FDM* sales of functional juice and juice drinks, at current and constant prices, 2002-07

Enhanced water and sports drinks

Figure 16: FDM* sales of enhanced water and sports drinks, at current and constant prices, 2002-07

Functional tea

Figure 17: FDM* sales of functional tea, at current and constant prices, 2002-07

Functional smoothies and yogurt drinks

Figure 18: FDM* sales of functional smoothies and yogurt drinks, at current and constant prices, 2002-07

Energy drinks

Figure 19: FDM* sales of energy drinks, at current and constant prices, 2002-07

Functional soy and rice-based drinks

Figure 20: FDM* sales of functional soy and rice-based drinks, at current and constant prices, 2002-07

Supply Structure

Top manufacturers push to gain momentum through acquisition of small but innovative companies

PepsiCo

Coca-Cola

Overview of company and brand sales

Figure 21: FDM* sales of major manufacturers in the functional beverage market in the U.S., 2004 and 2006

Functional juice and juice drinks

Figure 22: Selected brand sales and market share of functional juice and juice drinks at FDM* in the U.S., 2004 and 2006

Enhanced water and sports drinks

Figure 23: Selected brand sales and market share of enhanced water and sports drinks at FDM* in the U.S., 2004 and 2006

Energy drinks

Figure 24: Selected brand sales and market share of energy drinks at FDM* in the U.S., 2004 and 2006

Functional tea

Figure 25: Selected brand sales and market share of functional tea at FDM* in the U.S., 2004 and 2006

Functional smoothies and yogurt drinks

Figure 26: Selected brand sales and market share of functional smoothies and yogurt drinks at FDM* in the U.S., 2004 and 2006

Functional soy and rice-based drinks

Figure 27: Selected brand sales and market share of functional soy and rice-based drinks at FDM* in the U.S., 2004 and 2006

Advertising and Promotion

Marketers raise online presence

Coca-Cola Company

Figure 28: Minute Maid Heartwise and Minute Maid Active orange juice—TV ad, 2007

WhiteWave Foods Company

Silk Soymilk

Figure 29: Silk soymilk—TV ad, 2007

General Mills

Kraft Foods, Inc.

Capri-Sun fruit juice

Figure 30: Capri-Sun fruit juice—TV ad, 2007

Fruit2O

Figure 31: Fruit2O Relax and Fruit2O Immunity—TV ad, 2007

Figure 32: Fruit2O Energy and Fruit2O Hydration—TV ad, 2007

PepsiCo

Figure 33: Propel Calcium flavored water—TV ad, 2007

Figure 34: SoBe Life flavoured water—TV ad, 2007

Cadbury Schweppes

Snapple

Snapple Green tea

Figure 35: Snapple green tea—TV ad, 2007

Red tea iced drink

Figure 36: Snapple Red Tea—TV ad, 2006

Sunny Delight

Parents and children

Figure 37: Sunny Delight—TV ad, 2006

Danone

Figure 38: Danactive Drinking Yogurt—TV AD, 2006

Unilever

Lipton Green Tea range

Figure 39: Lipton Green Tea—TV ad, 2006

Ocean Spray

Cranberry farmers: red & white

Figure 40: Ocean Spray fruit juice—TV ad, 2006

Sun Sweet

Plumsmart juice

Figure 41: Sunsweet Plumsmart Juice—TV ad, 2006

Campbell’s Soup Company

Figure 42: Campbell’s V8 vegetable juice—TV ad, 2006

Retail Distribution

Introduction

Figure 43: FDM *sales of functional beverages, by channel, 2005 and 2007

Supermarkets

Figure 44: U.S. supermarket sales of functional beverages, at current and constant prices, 2002-07

Drug stores

Figure 45: Drug stores sales of functional beverages, at current and constant prices, 2002-07

Mass merchandisers and other outlets

Figure 46: Mass merchandisers* sales of functional beverages, at current and constant prices, 2002-07

The Consumer—Usage

Overview

Capsule summary

Consumption of functional beverages by type

Key consumer groups

Consumer views on functional ingredients

Interest in new beverages

Where are functional beverages purchased?

Who purchases functional beverages?

Figure 47: Incidence of purchasing functional foods or beverages in the past three months, by gender, May 2007

Figure 48: Incidence of purchasing functional foods or beverages in the past three months, by age, May 2007

Figure 49: Incidence of purchasing functional foods or beverages in the past three months, by race/ethnicity, May 2007

Figure 50: Incidence of purchasing functional foods or beverages in the past three months, by presence of children, May 2007

Functional beverages purchased for whom?

Figure 51: Functional beverages purchased for whom, by gender, May 2007

Choice of healthy lifestyle and consumption of functional food and beverages

Figure 52: Health and lifestyle practices and consumption of functional food and beverages, May 2007

Healthy lifestyle followers

Figure 53: Health or lifestyle practices, by gender, May 2007

Figure 54: Health or lifestyle practices, by age, May 2007

Figure 55: Health or lifestyle practices, by race/ethnicity, May 2007

The Consumer—Attitude, Behavior and Choice of Retail Channels

Views on the effectiveness of functional beverages

Figure 56: Belief in the effectiveness of functional beverages, by age, May 2007

Figure 57: Belief in the effectiveness of functional beverages, by race/ethnicity, May 2007

Type of functional beverages purchased

Figure 58: Functional beverages purchased in the past three months, by gender, May 2007

Figure 59: Functional beverages purchased in the past three months, by age, May 2007

Figure 60: Functional beverages purchased in the past three months, by race/ethnicity, May 2007

Figure 61: Functional beverages purchased in the past three months, by presence of children, May 2007

The role of functional ingredients in consumer purchase decisions

Figure 62: Role of functional ingredients in functional beverage purchase decisions, May 2007

Interest in new functional beverages

Figure 63: Interest in functional beverages types, by gender, May 2007

Figure 64: Interest in functional beverages types, by age, May 2007

Figure 65: Interest in functional beverages types, by race/ethnicity, May 2007

Figure 66: Interest in functional beverages types, by presence of children in household, May 2007

Interest in functional beverages that fight hangovers

Figure 67: Interest in functional beverages to fight hangovers, by age, May 2007

Choice of retail channels to functional beverages

Figure 68: Where functional beverages are bought, by age, May 2007

Future and Forecast

Future trends

Blurring segments and hybrid beverages

Soda moving into the functional realm

Energy hybrids abound amid high growth in the energy segment

Continuing quest for better health

Demographic influences

Hispanic consumers under-targeted

Figure 69: Population, by race and Hispanic origin, 2002-12

Echo Boomers and Baby Boomers grow in importance

Functional beverages targeted at women likely to be successful

Functional beauty beverages on the radar

Figure 70: Interest in functional beverages types, by gender, May 2007

Energy drinks targeted at women are likely to drive growth

Figure 71: Incidence of energy drinks consumption among females, 2002-06

Entrance of big players will provide expansion in retail channels

Market forecast

Functional beverage market

Figure 72: Forecast of total U.S. FDM sales of functional beverages, at current and constant prices, 2007-12

Figure 73: Forecast of FDM sales of functional beverages, at current and constant prices, 2007-12

Functional juice and juice drinks

Figure 74: Forecast of U.S. FDM sales of functional juice and juice drinks, at current and constant prices, 2007-12

Enhanced water and sports drinks

Figure 75: Forecast of U.S. FDM sales of enhanced water and sports drinks, at current and constant prices, 2007-12

Functional tea

Figure 76: Forecast of U.S. FDM sales of functional tea, at current and constant prices, 2007-12

Functional smoothies and yogurt drinks

Figure 77: Forecast of U.S. FDM sales of functional smoothies and yogurt drinks, at current and constant prices, 2007-12

Energy drinks

Figure 78: Forecast of U.S. FDM sales of energy drinks, at current and constant prices, 2007-12

Functional soy and rice-based drinks

Figure 79: Forecast of U.S. FDM sales of functional soy and rice-based drinks, at current and constant prices, 2007-12

Forecast factors

Appendix: Trade Associations

Abstract

• Mintel identifies the emerging trends, including natural/organic products, drinks made for women, beverages offering heart health, improved immunity and digestion benefits
• Product trends and consumer attitudes are analyzed from the perspective of product developers, marketers, and retailers
• Sales performances of the six functional beverage segments are explored, plus an in-depth look at leading manufacturers and brands, including promotional activity
• Who functional beverage consumers are and what other habits they have adopted toward their quest for healthy living
• Where consumers purchase functional beverages and which retail outlets reach target demographic groups

• Drinks enhanced with added ingredients to provide specific health/disease benefits beyond general nutrition, such as aiding digestion or joint health
• Drinks that have been modified and enhanced through the act of processing (e.g. fermentation of dairy products where the bacteria which cause the fermentation are selected for their health benefits, as in probiotic beverages)

• Juices and juice drinks
• Smoothies and yogurt drinks
• Tea
• Soy-based drinks
• Energy drinks
• Enhanced water and sports drinks

• Sports drinks which perform a largely rehydrating function and do not contain enhanced ingredients or make any functional claims beyond rehydration (e.g. Gatorade)
• Isotonic drink mixes or powders
• Bodybuilding/bulk-building drinks and powders
• Slimming-aid drinks (Slim-Fast, Herbal Life)
• Meal-replacement products (e.g. Ensure)
• Milk—there is a legal requirement for milk to be fortified and so all milk sales potentially fall into the functional drink category

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