Young consumers responsible for growth in functional drinks

According to the analyst's latest findings on US functional beverages, the market reached $9.8bn in 2007. This is up 14 percent from 2002, when taking inflation into account. Consumers aged 18-34 and households with children appear to have led growth in this category. Mintel's findings confirm that Americans are trying to be healthier, at the same time as wanting convenience - which is further good news for the functional food and beverage market. Coupled with this evolving attitude, the fact that younger consumers are tapping into these drinks means what was once a trend is now here to stay. Beverages lend particularly well to fortification and have the added allure of convenience because they are portable. Ready-to-drink functional tea, enhanced bottled water and sports drinks are leading the way with use highest among both consumers aged 18-34 and households with children, said Mintel. And one of the star products of the industry, the energy drink, has attracted consumers aged 18-34 as a lifestyle beverage. Consumers are turning to functional foods and beverages to fill the gaps in their diets and daily intake requirements for nutrients. And increased awareness of nutrition will likely fuel further growth if manufacturers can tailor products for the varied needs of health conscious consumers. According to Mintel, one in three consumers who buy functional beverages do so in hopes of gaining a health benefit related to a specific function in the body such as the heart, immunity, digestion or weight. Overall, the number of people trying to eat healthy increased by 30 million between 2002 and 2006, Mintel deduced from Simmons NCS 2002 and 2006 and US Census Bureau population projections. According to Mintel's survey, more than six out of ten respondents claimed to be trying to "eat healthier food these days". On the other side of the till, marketers are now trying to target aging baby boomers - aged 55 to 64 - with the promise of memory enhancement, lower cholesterol and blood pressure. Time and again, baby boomers have surfaced in industry research as driving the dietary supplement category because of their desire to take control of their health as they approach old age. And, because this age group has more purchasing power per capita, it makes sense for functional beverage manufacturers to now tap into this potential. The only loser in the functional drinks category appears to be functional juice, as well as juice drinks, which fell by 18 percent over the studied period. This may have resulted from a shift in consumer allegiance towards new functional beverage products. Energy drinks, which were the smallest category in 2002, have shot up to the third-largest category in Mintel's ranking with sales of $637mn in 2006. Another trend which has made headlines of late, thanks to the likes of the Coca-Cola Company, is that for enhanced water and sports drinks. Sales for these beverages grew by 73 percent to $1.2bn from 2004 to 2006. The top three companies in this market are now Coke, PepsiCo and Energy Brands - amounting to 90 percent of the market.