Europe Functional Water Market - Growth, Trends, and Forecasts (2023 - 2028)

Europe Functional Water Market - Growth, Trends, and Forecasts (2023 - 2028)

The European Functional Water Market is expected to register at a CAGR of 7.89% over the next five years.

With the growing trend of health and wellness among consumers, functional waters with diverse flavors are becoming increasingly visible in the European market. Several functional water companies from other regions are diversifying into European countries in organic and inorganic manners. This is evident with Coca-Cola’s expansion into the functional water segment with the acquisition of Glaceau, the energy brand, and its fortified ranges, like Vitaminwater. The manufacturers are incorporating innovative ways to create awareness about the products and communicate functional water's health benefits. The consumers' preference for tasty and healthy alternatives to carbonated drinks is driving the market.

Additionally, functional drinks, like energy drinks, are widely consumed by adolescents due to their claims of improving performance, endurance, and alertness. Furthermore, erratic working hours and the increasing occurrence of social gatherings are driving consumers toward energy drinks in search of instant energy. Moreover, the rising health consciousness, the increasing awareness regarding the need for an active lifestyle, and the rising prevalence of lifestyle diseases have inspired health-oriented consumers to opt for healthy and sugar-free drinks. The functional drinks market is projected to grow due to an increase in promotional and advertisement strategies by various manufacturers operating in the market.

From the very beginning, advertisements and promotions have played a vital role in the sales of food and functional beverage. The distribution of functional beverages through supermarket/hypermarket retail channels is widely accepted by both companies and consumers. The hypermarket and supermarket shelves are all acquired by private and international brands for functional water. For European consumers, hypermarkets and supermarkets have become the preferred type of retail stores for frequently purchased packaged goods due to their lower prices and convenient one-stop shopping experiences. Due to the power of bargaining offered to the consumers and owing to their dynamism and positioning, these store formats are becoming more popular among the residents and people with newer lifestyles. Additionally, canned functional drinks, including energy drinks, have a higher penetration in the market for their on-the-go consumption and availability in a wide range of retail outlets, such as kiosks, convenience stores, and supermarkets/hypermarkets, which has helped to spur the purchase of canned functional drinks across Europe.

The consumers' preference for tasty as well as healthy alternatives to carbonated drinks is driving the demand for functional water in Germany. Glacéau Vitaminwater, a brand of the Coca-Cola Company, was launched in Germany following its international success. Initially, the company is targeting Hamburg and planning to expand further to Munich, Cologne, Berlin, and the rest of Germany. German consumers focus more on the quality of functional water than its price while making the purchase. This indicates that the sales of well-established brands are likely to be greater when compared to private label lines because they are perceived to offer better quality products. Functional water companies in Germany are launching promotional campaigns and advertisements by incorporating celebrity endorsements, TV commercials, and other communication methods.

The European functional water market is fragmented due to the presence of various global and regional players in the industry. The key players are focusing on several strategies, such as new product developments, expansions, mergers and acquisitions, and partnerships, to meet the increasing demand from consumers. The major players are The Coca-Cola Company, PepsiCo, Inc., Danone S.A., Vitamin Well AB, and Acqua Minerale San Benedetto SpA, among others.

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