Flavored Water Market

Market Overview

The global flavored water market size was valued at USD 15.97 billion in 2022 and is projected to reach USD 37.65 billion by 2031, registering a CAGR of 10% during the forecast period (2023-2031). Flavored water market growth is fueled by the rising organized retail sector and increased health awareness.

Flavored water is a beverage that infuses natural or artificial tastes into water, offering consumers a refreshing and flavorful alternative to plain water. It has grown in popularity in recent years due to several causes, including a desire for healthier beverage options and a move away from high-calorie, sugar-laden beverages.

The growing popularity of flavored, nutritious, and functional beverages has increased the flavored water market share. Consumers are interested in trying new beverages flavored with fruits, herbs, and other healthy ingredients. Due to rising health concerns during the COVID-19 pandemic, the market experienced rapid expansion, which elevated demand for flavored hydration products enriched with the benefits of minerals and vitamins, particularly among health-conscious consumers with mid-to-high income levels.

Market Dynamics

Global Flavored Water Market Drivers

Obesity and Sugar Concerns

Concerns about obesity, diabetes, and other health risks associated with excessive sugar consumption have prompted customers to seek out beverages with low or no sugar content. Flavored water is marketed as a healthier alternative, with various flavors available without adding sugars. The World Health Organization (WHO) reports that the global prevalence of obesity has nearly quadrupled since 1975. More than 1 billion people globally will be obese by 2022, including 650 million adults, 340 million adolescents, and 39 million children. Furthermore, the Centers for Disease Control and Prevention (CDC) in the United States indicates that excessive sugar consumption is a key factor in obesity and related health conditions, such as type 2 diabetes, heart disease, and dental difficulties.

Furthermore, to prevent the risk of unhealthy weight gain and tooth decay, the World Health Organization (WHO) recommends limiting free sugar intake to less than 10% of total caloric intake at all stages of life. As a result, beverage firms have responded to these concerns. Consumer preferences have shifted, increasing the manufacture and marketing of sugar-free and low-calorie beverages, including flavored water options. To appeal to health-conscious consumers, flavored water brands, for example, prominently display their "sugar-free" or "zero calories" labels. As a result of these health-conscious consumer demands, the flavored water market trend is evolving.

Global Flavored Water Market Restraints

Competition from Other Beverages

Natural juices, sparkling water, functional drinks, and classic soda alternatives are among the beverage categories that compete with flavored water. The diversified beverage market might make it difficult for flavored water products to achieve and maintain market dominance. Because of its carbonated and refreshing features, the sparkling water business, which includes brands such as LaCroix and Perrier, has grown significantly. According to Nielsen data, sparkling water sales in the United States alone will exceed $4.3 billion in 2020, indicating a considerable increase in consumer demand.

Natural fruit juices have long been a popular beverage option for those looking for a refreshing and tasty beverage. While consumers are growing more health-conscious, they still like the natural flavor of fruit juices, which have a long market presence. Furthermore, because of worries about sugar levels and artificial chemicals, many customers are moving away from traditional sodas. As a result, soda alternatives, such as zero-calorie sodas, have emerged to compete for market share with flavored water products.

Global Flavored Water Market Opportunity

Functional Flavored Water

Adding beneficial additives to flavored water represents a huge market potential opportunity. Flavored water can give specific health benefits by adding vitamins, minerals, electrolytes, antioxidants, and other health-enhancing components, answering consumers' desire for beverages that offer more than just flavor. Functional flavored water may overlap with the category of sports and hydration drinks. The sports drinks industry has grown constantly, with more consumers recognizing the significance of good hydration and electrolyte balance during physical activity.

According to a Natural Marketing Institute report, 50% of customers actively seek beverages with health advantages. The need for beverages that promote general health and well-being provides a prospective market for functional flavored water. Consumers are becoming more interested in beverages that provide specific health benefits, and businesses can match this need by creating products that deliver hydration, vitamins, minerals, or other functional components. Brands may tap into this developing market sector by targeting health-conscious consumers and advertising the benefits of functional flavored water.

Regional Analysis

The global flavored water market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

North America Dominates the Global Market

North America is the most significant global market shareholder and is estimated to grow at a healthy CAGR over the forecast period. North America accounted for the biggest sales share because of increased product use as a healthier alternative to carbonated drinks. Popular brands such as Bubbly, AHA, Talking Rain, Nestlé Pure Life, Perrier, Schweppes, and LaCroix offer diverse goods in the region. As a result, enhanced product accessibility has increased product uptake in the region. Flavored water is predicted to account for a sizable portion of the overall bottled water industry.

Additionally, according to the flavored water market insights, a preference for healthy and functional drinking options drives sales of flavored water in the United States. Organic beverages, pH-balanced ingredients, and sugar-free beverages are being promoted to raise awareness of physical and mental well-being. The global market has grown tremendously in the last decade as people's choice of healthy liquids over carbonated soft drinks has increased.

Europe is anticipated to exhibit an impressive healthy CAGR over the forecast period. Naturally flavored and carbonated waters with high mineral content make them more appealing to health-conscious consumers. The flavors of the drinks are frequently derived from genuine fruit extracts. Product sales are high in various countries, including Germany, the United Kingdom, Italy, Spain, and France, where it is frequently offered with meals at restaurants.

In addition, demand for flavored and carbonated water will rise in Germany throughout the forecast period. As a result, businesses utilize their marketing techniques to stay ahead of the competition and entice customers. With end customers increasingly concerned about sustainability, numerous big companies are developing can-flavored water to limit plastic usage. This is projected to contribute to market growth.

Asia Pacific is the fastest-growing market. Consumer affinity for the product, combined with the expansion of quick-service and full-service restaurants, is projected to generate a good picture for the region's market. Rising consumer awareness of the benefits of a healthy lifestyle has spurred demand for healthy foods and beverages, boosting regional market growth. Some of the most successful organizations are pursuing acquisition strategies and developing platforms centered on consumer propositions rather than their conventional core competencies. Because of these factors, the Indian market for flavored water is expected to grow rapidly during the projected period.

The market for flavored water in LAMEA (Latin America, Middle East, and Africa) covers a region with various consumer preferences and varying levels of economic development. Flavored water has grown in popularity in this region due to increased health consciousness, shifting beverage preferences, and a desire for refreshing, low-calorie options.

Segmental Analysis

The global flavored water market share is segmented based on type, packaging type, distribution channel, and region.

The type segment is further segmented into Carbonated and still.

Carbonated type holds the largest share of the market. Carbonated flavored water is flavored and carbonated, giving it a frothy or bubbly texture. The carbonation imparts a delightful and effervescent feel to these beverages, akin to traditional soda but without the extra sugar and calories. Customers who appreciate the sensation of bubbles in their drinks may find carbonated flavored water intriguing. It has a sparkling and crisp taste and is frequently offered as an alternative to sugary sodas. The increased prevalence of obesity and excessive blood sugar levels in the general population is the primary driver of the increase in demand for sugar-free carbonated beverages. The increased prevalence of obesity and excessive blood sugar levels in the general population is the primary driver of the increase in demand for sugar-free carbonated beverages. As a result, such factors will drive the flavored water market growth.

Still flavored water, often known as "flat" water, is uncarbonated and has a flat, non-fizzy texture. It is flavored to provide a pleasant and tasty taste without adding carbonation. Consumers who prefer a smoother, non-bubbly experience prefer still flavored water. It can be chosen for its simplicity and natural taste, making it a viable option for individuals seeking flavor without carbonation.

Based on packaging type, the market is divided into Bottles and cans.

Bottles dominate the global market. Flavored water is widely packed in bottles ranging in size from small, single-serve bottles to larger, shareable ones. Bottle packaging is frequently made of plastic, glass, or eco-friendly alternatives like plant-based polymers. Bottles are popular due to their portability and ease of use. They are resealable and frequently come in various sizes to fit varying consumption requirements. Plastic bottles are also lightweight and less prone to breakage, making them ideal for on-the-go use.

Flavored water is also available in cans, like traditional soda or carbonated beverages. These aluminum cans are often designed to be portable and easily recycled.

Distribution channels can further bifurcate the market into Store-based and non-store-based.

Store-based channels influenced the market growth. Flavored water is sold in physical retail locations through store-based distribution networks. Supermarkets, convenience stores, hypermarkets, gas stations, and other physical retail locations are included. 

Store-based distribution methods allow customers to see and purchase things in person. They provide consumers with convenience and instant access to flavored water, allowing them to decide what is available in-store. Most consumers buy bottled water from supermarkets and hypermarkets because of the shopping experience.

Examples of non-store-based distribution methods are selling flavored water through online platforms such as e-commerce websites, supermarket delivery services, subscription services, and direct-to-consumer (DTC) sales.

Recent Developments

• October 2023- Nestlé is developing products that combine milk and plant components.
• October 2023- The Coca-Cola Company and Pernod Ricard have announced plans to launch an Absolut Vodka and Sprite Ready-To-Drink Cocktail.