|Base Year Market Size
|USD XX Billion
|Forecast Year Market Size
|USD XX Billion
|Fastest Growing Market
The Total Addressable Market (TAM) for non-alcoholic RTD beverages was valued at USD 12,96,911.63 million in 2022. It is estimated to reach USD 21,05,202.26 million by 2031, growing at a CAGR of 5.53% during the forecast period (2023–2031).
Non-alcoholic RTD beverages are consumable drinks that contain no alcohol. RTD non-alcoholic drinks are adaptable, practical, and healthy. Market expansion is fueled by rising consumer demand for mixed and protein beverages that are ready to drink. Functional beverages, tea and coffee, carbonated soft drinks, fruit and vegetable juices, flavored and fortified water, and dairy-based beverages are just a few examples of non-alcoholic RTD beverages.
Customers are switching to healthy drinks for regular days and even special occasions due to growing health concerns brought on by the virus. A new category of premium soft drinks with complex flavors intended for adults has emerged due to the domino effect of more and more people choosing non-alcoholic drinks and beverages. According to a Waitrose Food and Drink Report from October 2021, searches for alcohol-free beverages are still growing by 22% annually. Brands have kept up with new trends by releasing new products or expanding their current product lines.
Surging Demand for Non-Alcoholic Beverages
Non-alcoholic beverages are becoming more popular among the global population, particularly among millennials. The trend toward adopting a healthy lifestyle is rapidly increasing among consumers. The mass population of consumers across the globe is becoming aware of the food and beverages they consume and comparing the products to choose the best. Rising consumer awareness, an increasing number of informed consumers with clear perceptions, and a willingness to buy healthy goods boost the demand for non-alcoholic beverages globally.
People are becoming more aware of the harmful effects of drinking alcohol, so they choose non-alcoholic drinks over wines, beers, spirits, and other alcoholic drinks with flavors. The adoption rate of non-alcoholic beverages has increased as consumer awareness of their advantages grows. Thus, surging demand for non-alcoholic beverages primarily drives market growth for the non-alcoholic RTD beverages market.
Rising Demand for Functional Beverages
The trend toward adopting a healthy lifestyle is rapidly increasing among consumers. Obesity, diabetes, and cardiovascular disease are rising due to unhealthy lifestyles, which has prompted people to switch to healthier foods and beverages. As a result, the demand from consumers for functional beverages has increased. People are selling functional beverages with extra ingredients that help with many health problems. The demand for these beverages has grown because they contain components like minerals, vitamins, herbs, amino acids, and bacteria. These beverages have beneficial effects on the body, such as an improved immune system, heart rate, digestive health, hydration and electrolyte replenishing benefits post-exercise, and improved intestinal flora and gut function, which are mainly driving the demand for this product among consumers.
For example, sports drinks are sold as products that help you stay hydrated, and probiotic drinks are sold as products that help your gut stay healthy. Marketers of functional beverages focus on adequate labeling and aligning each formula with a specific health benefit and application to attract consumer attention. Thus, the increasing demand for functional beverages drives the overall growth of the non-alcoholic RTD beverage market.
Stringent Government Regulations and Guidelines
The non-alcoholic RTD beverage industry is governed by several laws and rules that manufacturers must follow to operate legally. These rules and regulations govern the issuance of permits, the entry of new players, the introduction of new products, and the expiration of existing products. There are few regulations in some countries, and the regulatory authorities can sometimes be lax, whereas there are many regulations in other countries that are becoming more strict.
For example, in the US, the FDA closely monitors how probiotic products are made. For approval, the people who sell probiotics in the country must meet strict documentation and registration requirements. Thus, it is not easier for players to launch new products. Different regulations, laws, and rules in various nations confound the players and make it challenging to follow the same operational procedure if they produce or market their goods in various places, limiting the market's expansion.
Growing Interest in Organic Products
Rising health consciousness has led consumers to prefer organic food and beverages. People are more likely to buy organic ready-to-drink (RTD) beverages without artificial chemicals like pesticides, herbicides, and fertilizers. The demand for organic products has sharply increased in developed and developing economies in recent years. According to SR analysis, the Indian organic products market was valued at USD 2.99 billion in 2018, with an 8.6% CAGR from 2008 to 2018. Organic food sales in Europe reached EUR 30.7 billion (USD 34.2 billion) in 2016, up 11.4% from 2015, according to the FiBL, the Research Institute of Organic Agriculture. This shift in consumption patterns has influenced manufacturers to launch natural and organic food and beverages.
The growing preference for organic products creates an opportunity for global non-alcoholic RTD beverages market players. For instance, in May 2017, Sunup Inc., a New York-based beverage company, introduced a new ready-to-drink coffee, Sunup Green Coffee. The product was made with organic coffee beans and contained natural antioxidants and caffeine. Additionally, in March 2019, Teatulia, known for its organic tea, launched a line of tea sodas that feature naturally brewed tea, fruit, and herbs. The flavors include organic green tea soda, organic black tea soda, organic lemongrass tea soda, and organic mint tea soda.
Asia-Pacific Dominates the Global Market
By region, the global non-alcoholic RTD beverages market is divided into North America, Europe, Asia-Pacific, and Rest of the World.
Asia-Pacific is the most significant shareholder in the global non-alcoholic RTD beverages market and is anticipated to grow at a CAGR of 5.6% during the forecast period. Various non-alcoholic RTD beverages are still in their infancy in the Asia-Pacific region. However, the fact that a sizable portion of the populace enjoys healthy beverages will probably present lucrative opportunities over the forecast period. The high percentage of millennials in the region favors the healthy beverages market. Also, the market will likely grow considerably during the review period because western cultures significantly impact healthy eating habits. Due to the expanding middle class and increase in urban population, more people are drinking non-alcoholic beverages. China, India, and numerous Southeast Asian nations produced a significant portion of the revenue in the Asia-Pacific region. These countries are expected to generate the highest growth rate during the forecast period.
Europe is expected to grow at a CAGR of 5.53% over the forecast period. Increasing awareness of healthy beverage consumption in the region is boosting the non-alcoholic RTD beverages market. The rising interest in RTD tea and coffee, along with fruits and vegetable juices with enhanced flavors and superior quality among the European population, is further propelling the non-alcoholic RTD beverages market in the region. The European market is also experiencing the premiumization trend, where key brands are raising awareness of specialty RTD tea and coffee products by emphasizing their superior quality and exclusivity. People choose healthier drinks with more nutrients over soft drinks with a lot of calories and few or no health benefits. Due to product development and technology improvements, the market for non-alcoholic RTD beverages in European nations is anticipated to expand during the forecast period.
North America is one of the world's biggest markets for non-alcoholic RTD beverages. People in North America are more interested in RTD drinks that do not contain alcohol because their tastes have changed, and they want healthier drinks. This approach has been one of the critical elements affecting the market's growth. The fact that people are drinking fewer alcoholic drinks, especially in the US, shows that people are moving toward healthier drinks with less or no alcohol. Also, the market is growing because functional drinks like fruit and vegetable juices, sports drinks, RTD tea, and energy drinks are becoming more popular. Another essential element driving market expansion in the region is ongoing research and development for introducing new fruit flavors in RTD beverages. Furthermore, the presence of some of the critical players of non-alcoholic RTD beverages, such as Coca-Cola, PepsiCo, and Starbucks Corporation, further makes North America one of the critical markets for non-alcoholic RTD beverages.
South America is estimated to retain its dominance throughout the forecast period. Countries such as Brazil and Peru have witnessed substantial growth in demand for RTD tea and coffee in the last couple of years. Consumer awareness towards wellness and a substantial drop in carbonated soft drink consumption has resulted in its growth. The Middle East and Africa contributed a minimal share of the regional market. Low awareness, low market penetration by key manufacturers, and limited purchasing capacity have resulted in a lower market share in these regions. High preference for traditional beverages, low penetration of online distribution channels, and a lack of region-based manufacturers of RTD beverages are critical factors behind the small non-alcoholic RTD beverages market in the Middle East and Africa.
|By Product Type
|By Packaging Type
|By Distribution Channel
|PepsiCo Keurig Dr. Pepper Inc. The Coca-Cola Company Nestlé S.A. Starbucks Corporation Danone S.A. Lotte Chilsung Beverage Co. Ltd. Suntory Holdings Limited POKKA SAPPORO Food & Beverage Ltd Yakult Honsha Co. Ltd.
|U.K. Germany France Spain Italy Russia Nordic Benelux Rest of Europe
|China Korea Japan India Australia Taiwan South East Asia Rest of Asia-Pacific
|Middle East and Africa
|UAE Turkey Saudi Arabia South Africa Egypt Nigeria Rest of MEA
|Brazil Mexico Argentina Chile Colombia Rest of LATAM
|Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends
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The global non-alcoholic RTD beverages market is segmented by product type, packaging type, and distribution channel.
By product type, the global market is divided into functional beverages, carbonated soft drinks, tea and coffee, fruits and vegetable juice, bottled water, dairy-based beverages, and others.
The bottled water segment is the highest contributor to the market and is anticipated to grow at a CAGR of 5.72% over the forecast period. Bottled water is drinking water that is packaged for retail. Market players process the water by removing unwanted microorganisms and purifying it for consumption. In order to make the water sparkle, it is then flavored, made stronger, or mixed with carbon dioxide. Water enrichment with different flavors and its fortification with health-benefiting ingredients has grown rapidly in the past few years.
Additionally, water consumption among consumers has increased as a result of flavoring the beverage. Some popular flavors added to water are lemon, orange, mixed berries, and apple. These calorie-free or low-calorie drinks also include extra vitamins and minerals. The demand for flavored water on the market is rising as more people become aware of the advantages of consuming water rather than sugary drinks.
Carbonated soft drinks contain dissolved carbon dioxide and a natural or artificial sweetener. Coca-Cola, Mountain Dew, and Sprite are well-known brands of carbonated soft drinks. The revenue of sugary carbonated soft drinks is declining globally due to the side effects on human health. On the other hand, the segment for carbonated soft drinks is driven by the introduction of sugar-free versions of these beverages and the rising demand for them.
By packaging type, the global market is divided into bottles, cans, and others.
The bottles segment owns the highest market share and is anticipated to grow at a CAGR of 5.49% over the forecast period. Bottles are the most popular packaging solution among beverage manufacturers. Consumers like glass bottles because they last a long time, are easy to clean, and look nice. The bottling segment accounted for a significant market share due to various factors. The high holding capacity of bottles is one of the main factors boosting their market share. The segment is estimated to retain its dominance throughout the forecast period.
One of the most widely used packaging options among beverage manufacturers is cans. The demand for can packaging is increasing rapidly due to convenience. Consumers' on-the-go lifestyles are expected to drive can packaging sales. Manufacturers of ready-to-drink (RTD) drinks that do not contain alcohol have started using recycled aluminum packaging because of the growing focus on sustainable environmental growth.
By distribution channel, the global market is divided into store-based and non-store-based channels.
The store-based segment is the highest contributor to the market and is anticipated to grow at a CAGR of 5.72% over the forecast period. Consumers prefer store-based channels as they provide a one-stop shopping experience. Store-based distribution channels include supermarkets and hypermarkets, convenience stores, and others. Supermarkets and hypermarkets account for the majority of sales of consumer goods, including non-alcoholic RTD beverages.
E-commerce is one type of non-store-based distribution channel for non-alcoholic RTD beverages. Manufacturers sell their products online or through their websites, where they can display a variety of goods. Companies launching new products need help reaching out to consumers in different regions through brick-and-mortar stores. Thus, there is a preference for e-commerce channels to expedite the process. The increasing use of e-commerce in the retail sector is projected to result in the non-store-based segment registering a higher growth rate in the coming years.