China Functional Drink Industry Overview, 2017-2021


According to CRI, the sales revenue of functional drinks increased from CNY 25.71 billion in 2011 to CNY 60.6 billion in 2015 with the CAGR of 23.9%, far exceeding the growth rate of the market size of the soft drink industry during the corresponding period. In China, the competition in the functional drink industry is less intense than other soft drink varieties. According to CRI, the aggregate market share of top 5 functional drink manufacturers in China was about 63.5% of the total with a high market concentration rate, of which the market share of Red Bull and Danone Mizone was over half of the total in 2015.

In recent years, the resident consumption ability improves especially in the third and fourth tier cities as well as rural areas, leading to the growing beverage industry. The demand for functional drinks will continue increasing with the improvement of resident health awareness. Existing products are small in varieties in the functional drink market mainly including those adding vitamin and taurine with high retail prices while there are less international popular varieties.

Therefore, opportunities exist for new functional drink manufacturers in segment varieties and regional markets. The annual average consumption volume of functional drinks was less than 3 liters per capita in China, far inferior to the global level of 7 liters. This means that functional drink enterprises need to promote the marketing for more understanding and popularity among consumers and larger consumption space of functional drinks.