The presence of a large number of regional and local players and the low degree of product differentiation renders the global flavored and functional water market highly fragmented and competitive in nature. The primary focus of market participants is product differentiation through the use of innovative ingredients and packaging, finds Transparency Market Research (TMR) in a new study. Some of the prominent players operating in the market are Hint Water, The Coca-Cola Company, Nestle SA, PepsiCo, Groupe Danone, and New York Spring Water.
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“A large number of key players are entering into partnerships with regional players to enhance their product expertise and innovation. This strategy also helps them in increasing their geographical outreach,” says the author of the study. The global flavored and functional market is expected to reach a valuation of US$36.7 bn by 2019 from US$23.8 bn in 2015, expanding at a significant CAGR of 11.50% between 2013 and 2019.
Asia Pacific to Remain Dominant through 2019
On the basis of product, the flavored water segment will exhibit a greater CAGR than functional water, owing to the increasing inclination towards products that offer both health benefits and taste. Geographically, Asia Pacific will be at the forefront of growth until 2019, representing 44% of the overall market. The rapid urbanization and rising disposable income have heightened awareness regarding flavored and functional water in the region.
Rising Health Consciousness among People Owing to Changing Lifestyles to Bolster Demand
The World Health Organization states that the number of obese children below the age of five is expected to reach 70 million by 2025 from 42 million in 2013. Due to the rising concerns regarding obesity and numerous diseases related to obesity, the inclination towards low-calorie drinks has increased substantially over the past few years. This, in turn, has an inevitable positive impact on the global market for flavored and functional drinks.
“Rapid urbanization, changing lifestyles, and rising disposable income are prompting people around the world to become more health conscious, which is translating into the greater uptake of flavored and functional water,” says a TMR analyst. Manufacturers are also taking increasing efforts to develop healthier drinks that better adapt to the demands of customers, which is working in favor of the market. Besides that, the growing global population of geriatrics is also stoking the growth of the flavored and functional market.
Increasing Aversion towards Use of Plastic Bottles to Hamper Growth Prospects
The global flavored and functional water market is largely influenced by the dynamics of the global bottled water industry. The increasing opposition to the use of plastics in packaging along with the growing awareness pertaining to environmental conservation is adversely affecting the use of plastic bottles. This, in turn, is inhibiting the growth of the global flavored and functional water market.
Despite the increasing shift towards healthier lifestyles, the availability of low-cost carbonated drinks is negatively impacting the growth of the market. In addition, the presence of high concentration of sugar in various flavored and functional water products is hampering the very purpose of consuming these products. However, lucrative growth opportunities offered by emerging countries are likely to encourage manufacturers to tap on these regions, thereby allowing the global flavored and functional water market to gain significant momentum in the near future.