Functional Beverages.doc

8/13/2019 Functional Beverages.doc

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Functional Beverages:Industry Analysis

18092012

Written by

Divya Bhatia, Welingkar Institute

INTRODUCTIONThe first functional beverage which was launched was to hydrate the body But today largenu!bers of functional beverages are available for various lifestyle "roble!s ranging fro!an#iety to slee" to weight loss etc $oca $ola%s &hock and 'ed Bull were the early entrants inthe industry and are the ones who give chance to late entrant to think about the industry(unctional beverages can be defined as ready to drink for!ulation with ingredients such asherbs, vita!ins, !inerals, a!ino acids and raw fruits to "rovide additional health benefitsbeyond nutrition )arious "roducts which are categori*ed as functional beverages are s"ortsdrinks, energy drinks, ready to drink tea and coffees, yoghurt, fruit+vegetable s!oothies andeven enhanced water These functional beverages satisfy need of consu!ers of hydration,energy, enoy!ent or si!"ly having funThe global functional beverages !arket grew by -. in2010 to reach a value of /8,18 !illion In 201, the global functional beverages !arket isforecast to have a value of /2,11 !illion, an increase of 23. since 2010 4roections forfunctional beverages are that !arket will grow by 10-. in between 2010 and 201 and totalannual sales e#ceeding /58 billion in 201 The Indian functional Beverage Industry wasesti!ated to be around 's 11,13 crores in 2010 with a $67' of 21. in the last five years It ise#"ected that the industry will cross 's 13,000 crores sales in 201(unctional beverages arebeco!ing "o"ular due to their s"ecific health benefits and are a""ealing to consu!ersbecause of changing lifestyles $onsu!ers "urchase these "roducts for both convenience ands"ecific health benefitsFUNCTIONAL B!RA" INDU#TR$

(unctional beverages sector can be said to be subsector of nonalcoholic industry and isfastest growing sector The faster growth of sector is also because of saturation of !arket bycarbonated drinks The industrial trend is changing9 the consu!"tion of carbonated drinks isdecreasing while that of functional beverages is increasingThe industry can be broadly divided into four !arket seg!ents:
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%ydration

6ntio#idants, vita!ins and fruit e#tracts are the ingredients which hydrate both innerand outer side of skin The various vita!ins co!!only found in energy drinks for theirs"ecific benefits are:

B vita!in: (or energy !etabolis!

; vita!in:


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6!ul $o!"any has co!e u" with 4rolife lassee and butter!ilk,

'asna is even "lanning to enter into the seg!ent with a new subsidiary They arelooking for brand licensing and technical collaboration

6!way launched 6!way A energy drink which co!es in two flavors of citrus blastand tro"ical blast This "roduct is launched as Cuick and healthy solution to stress andfatigue

N!IRON+NT ANAL$#I#-ORTR.# FI! FORC#

-RODUCT

The functional beverages has wide range of "roduct like energy drinks, functional uice, uicedrinks, enhanced water, rela#ation drinks, functional soy, rice and al!ondbased drinks,coconut water, functional tea, functional yogurt drinks and s!oothiesThe "roducts offunctional beverages offer wide variety targeting different health concerns =ne !aor "roductis hybrid drink with co!bination of vita!ins and other nutrients which has thirst Cuenchingability The other is "robiotic or active drinks which have ability to enhance the "ower ofi!!une syste! The other is for enhancing !e!ory and !ental shar"ness $hildren are also

targeted by these energy drinks and >estl%s Boost is taking the lead in this seg!entTheother categori*ations of the "roducts are on the basis of s"orts drinks, health drinks, beautydrinks, energy drinks, weightloss drinks etc In the energy drink seg!ent 'ed bull is growingconsiderably fast

Dairy "roducts are even e#tending the!selves to !ore than flavored !ilk

)arious functional beverages which are available in the !arket are 'hinoEs, Bullet,$loud 3, 6!way A, "ower house, AAA

AAA has two variants 'euve and >icofi# &'? is brand a!bassador and even brand isassociated with ??' as "rinci"al s"onsor >icofi# is for!ulated to decrease the urge fornicotine and 'euve is for!ulated to reuvenate !ind and body and enhance i!!unity
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&oBe 6drenaline 'ush which is "riced at 's 5 for a 2 !l can

$oca $ola has a global "ortfolio of five energy drink brands )ita!in ;nergy, (ullThrottle (ury, 4ower"lay, TaB ;nergy and burn F&hockEs global avatarG

"RO)T% DRI!R#

1 There are various benefits of functional beverages which interest consu!er $onsu!ers areinterested in natural ingredients and beverages which are free fro! artificial ingredients 6s aresult this !arket has huge attraction for "eo"le who are concerned about health Diet drinksare low in caloric content and with less of sugar content &o!e drinks contain antio#idantsThese drinks have inherent energi*ing benefits of fruits and are natural sources of caffeine@arket of functional beverages is increasing because "eo"le have been beco!e "roactive indisease "revention and control2 ;nergy drinks used in co!bination with )odkaIn so!e cases energy drinks can be used toboost sales of alcoholic drinks or vice versa Due to high caffeine content energy drinks areco!"atible with alcoholic drinks es"ecially like "re!iu! )odkas 6nd another i!"ortant "ointis that both energy and )odka are targeted to consu!ers around thirty years of age- ;nergy drinks are good source of energy without "roviding e#cessive calories and sugar 6!aority of Indians are now beco!ing aware about !alnutrition and under nutrition They arelooking for convenient source of energy and functional drinks are fulfilling their need

CON#U+R -ROFIL

Ty"ical consu!er of functional beverages is well educated, in between 2 years old, havinghighly dis"osable inco!e, belong to u""er !iddle and !iddle class (e!ales consu!e or tryfunctional beverages !ore than !alesThese consu!ers are willing to try so!ething new $o!"anies are trying to sur"rise the! byco!ing u" with new "roducts &ur"rise can be in for! of color, taste and aro!a of "roduct Bysur"rising custo!ers the "ur"ose of co!"anies is that consu!er won%t get a chance toco!"are "roduct with cola or uices arge consu!"tion of functional beverages is due to"erceived health benefits of "roduct

C%ALLN"# BIN" FACD

1 ;nergy drink seg!ent still re!ain a new category with only few established "layers such as'ed Bull, $loud3, 4ower


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-roduct: Drink !ust taste good and have ele!ent of so!ething new in it 4ackaging shouldbe attractive enough as these drinks are single serving beverages so "eo"le want to get noticewhen they are consu!ing these drinks Hser !ust feel that "roduct works 6ll the clai!sbehind the "roduct !ust be "roved by scientific study and have evidence of testi!onies

-rice:4roduct should be launch in s!all "acks at less "rice >ourish$o launched glucosebased drink Tata 7luco 4lusJ in a 200 !l cu" "riced at 's and launched nutrient water

under Tata Water 4lusJ at 's 1 for a 50 !l bottle4lace: 4roduct should be available at all retail outlets &o!e of the "roducts launched byco!"anies are only available in night clubs etc

-ro*otion: These drinks are "ro!oted with benefits such as healthy heart, i!"rovedi!!unity and digestion and energy boosting Brands need to focus on !ass seg!ent 4roductcan be "ro!oted by sa!"ling in the !odern retail where consu!ers are !ore rece"tive to"roduct

Co*/etition: 6 clear differentiation of one%s "roduct fro! the co!"etitor%s "roduct is therein ter! of ingredients and their health benefits 6s the seg!ent is continuously increasing theco!"anies are e#"loring new areas of industry

)%AT.# N)

;nergy drink seg!ent is increasing where as natural uices seg!ent is decreasing The growthof energy drink seg!ent has increased even during the recession What is noticed thatseg!ent is fairly able to !aintain its consu!er base but is not able to add !ore of consu!ers@ore than 800 s"orts and energy drinks were launched in 2010 all over the world4roteindrinks are also !uch in de!and These drinks are targeting to consu!er looking for basicnutrients such as "rotein and fiber These "roducts reduce the weight while !aintaining thegeneral lifestyle as these is convenient onthego snack The "roble! with this seg!entgrowth is that "eo"le still think that drinks cannot be good source of "rotein 4rotein can onlybe "rovided by bars and "owder for!ulationTraditional "roducts with ingredients such ascaffeine, vita!ins, herbs and antio#idants are re"laced by ingredients such as "rotein, o!ega- fatty acids 'ange of "roducts has broadened to sugar free, caffeine free and organic"roductsThe co!"anies are launching "roducts with less of caloric contents while retaining the sa!etaste of "roducts 4e"sico introduce 4e"si >e#t, which has sa!e taste as of original cola butcaloric content is decreased in "roduct 4e"sico also launched Tro"0=ther line of e#tension is natural teas These beverages are si!"le with all natural ingredientsBeverages co!"anies are "ushing their functional beverages along with increasing consu!erde!and

FAILUR#$oke ca!e u" with energy drink &hock which was "ositioned as lifestyle drink in 2001 withtagline Kunleash your wicked sideJ The "roduct was not able to "roduce good !arketres"onse &i!ilarly 4e"si$oEs energy drink &oBe, 7la#o&!ith?line $onsu!er


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Functional Beverages.doc