two teenagers walking and holding beverage

European Functional Beverage Market Insights for 2023

The 2023 European functional beverage market is focusing on consumers’ top needs such as energy and immunity support. However, consumer interest in other functional benefits, as well as natural ingredients, is on the rise.

Highlights: 

  • The EMEA region accounts for more than one-fifth of the global functional beverage market, and the Eastern European market is the second fastest-growing globally.
  • Energy and immune support are the top-of-mind functional benefits for consumers. 
  • Energy drinks and Yogurt beverages are the most popular functional beverages in Europe.

European Functional Beverage Market Overview

The $40 billion functional beverage market in Europe, the Middle East, and Africa (EMEA) is forecast to reach $58.3 billion by 2026, growing at a CAGR of 7.8%.1 The EMEA region accounts for slightly more than one-fifth of the global functional beverage market.2 The Eastern European market, though a relatively small proportion of Europe’s functional beverage market, is the second fastest-growing globally at 9.3%, just behind Latin America.3

In the wake of the COVID pandemic and as part of the overall trend in healthy snacking in Europe, more consumers are reaching for beverages that are better for them. While energy and immune support continue to be top-of-mind functional benefits for consumers, innovation and competitive pricing will be important going forward to stand out in Europe’s expanding functional beverage market.

woman looking at beverage

Most Popular Functional Beverages in Europe

Energy drinks lead in functional beverage sales in Europe—a trend also seen in the North American and Latin American markets.4 In Germany, the number of consumers using energy drinks and shots grew between 2020 and 2021 despite the lockdown curtailing some key usage occasions.5 This underscores the importance of these beverages in helping consumers stay alert and focused when at home--for example, while working, studying, and gaming.

EMEA Beverage Market Sales by Beverage Type

Functional Beverage Type Sales in Millions (2021)
Energy drinks $20,557
Yogurt beverages $6,731
Dairy alternative beverages $4,318
Sports drinks $2,477
Functional juices $2,444
Sports protein RTD and meal replacements $2,020
Functional waters $1,241
Functional carbonates $185
Functional RTD coffees and teas $34
Source: Euromonitor

Yogurt beverages are the most popular type of functional beverage in Europe after energy drinks, with the immune health association helping to drive sales during the pandemic. Immunity associations have also become increasingly important for juices. 24% of UK product launches of juices, juice drinks, and smoothies in 2021 feature immune system claims, up from just 8% in 2019.

The fastest-growing functional beverages in the EMEA market are functional RTD coffees and teas (estimated CAGR 10.1%, 2021-2026) and functional waters (9.8%), though from a small base.7 Also showing near double-digit growth for the forecast period are dairy alternative beverages (9.7%) and energy drinks (9.2%).8

Opportunities in Functional Beverages for the European Consumer

A growing trend in functional beverages is consumers’ interest in natural and no-sugar formulas, particularly for energy and sports drinks. Of German consumers who don’t use sports drinks, 42% believe they contain too many artificial additives,9 while 44% of UK consumers don’t use energy drinks because they have too much sugar or too many artificial ingredients.10

man looking at beverage in store

Consumers also show an interest in functional beverages that can offer multiple benefits, with 72% of UK consumers saying energy and sports drinks with added health benefits appeal to them.11 German energy and sports drink users would be interested in seeing those products include benefits for the immune system (31%), brain function (25%), cardiovascular health (25%), and digestive health (19%).12 

Creating Next-Gen Functional Beverages

Making functional beverages even healthier—through expanded functional benefits, less sugar, or cleaner labels—can broaden your consumer base and enhance their appeal to current users. As a global leader in functional ingredients, Glanbia Nutritionals provides market expertise, product development support, and high-quality functional ingredients that can help you succeed in Europe’s evolving functional beverage market.

Our portfolio of functional beverage ingredients includes custom premix solutions for natural energy drinks, dairy proteins for yogurt beverages, plant-based solutions for dairy alternative  beverages, and more. Contact us to learn how we can help you create the next-gen functional beverages consumers are looking for.


References

1-4. Euromonitor, February 2022. Data ending 2021.
5. Mintel, Sports and Energy Drinks – Germany – 2021. 
6. Mintel, Fruit Juice, Juice Drinks and Smoothies – UK – 2022.
7-8. Euromonitor, February 2022. Data ending 2021.
9. Mintel, Sports and Energy Drinks – Germany – 2021. 
10-11. Mintel, Sports and Energy Drinks – UK – 2021.
12. Mintel, Sports and Energy Drinks – Germany – 2021. 

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