China’s Promising Growth For Functional Drinks

Friday, October 14th, 2016 | 525 Views

Growing at an annual rate of almost 24 percent since 2011, the functional drinks market in China was worth over US$9.1 billion in 2015 when compared to US$3.9 billion in 2011, according to a report by Research & Markets.

Much of the growth was due to new product launches, and analysts believe that the market offers opportunities for manufacturers across a range of segments and regional markets.

Additionally, the average annual consumption of less than three litres per capita in China was far below the global average of seven litres, pointing to potential continued growth for the industry.

The aggregate market share of the leading five functional drink manufacturers in China accounted for 63.5 percent of total market share in 2015.The sector also has a high concentration rate, with Red Bull and Danone Mizone taking over half of the sector.

The main consumers are office workers, students and children, who mainly view functional beverages as an energy supplement. Not only are most brands locally manufactured, but they are additionally formulated with vitamins and taurine as well.

Due to preference for sports and staying up, Chinese males consume more functional drinks than females, who prefer fruit juices, vegetable protein beverages or bottled water instead.

Consumption of functional drinks has also been increasing in recent years. Growth has mainly been growing outside the metropolitan areas, and especially in the third and fourth tier cities and rural area. As health awareness continues to rise, demand for functional drinks is also expected to increase in tandem.