Market Trends of South America Functional Beverages Industry
This section covers the major market trends shaping the South America Functional Beverages Market according to our research experts:
Augmented Expenditure on Advertisement and Promotional Activities
Functional drinks are becoming very popular among millennials because of the aggressive marketing campaigns that big beverage companies are running to attract young customers. Functional drinks like energy drinks, sports drinks, and other fortified drinks are being advertised as drinks that wake up the mind, refresh the body, and improve performance and stamina. This is catching the attention of consumers. A few of the most important things that affect market growth are building brand image and trademarks, as well as advertising costs, endorsements, and sponsorships. A significant number of key players' promotional expenses result from endorsement and sponsorship contracts. For instance, as part of their promotional strategy, key players, like Red Bull, own football teams, with clubs in Brazil featuring the Red Bull trademark in their names, along with getting associated with other teams like the Argentina football team, further promoting their presence in the region. By associating the drink's image with these activities, the company seeks to promote its public image and raise brand power. Further, social media has become a very influential factor in deciding the purchasing behavior of consumers across the world. Hence, the enhanced promotions of functional beverages like sports drinks and energy drinks on different social media channels are further supporting market growth.
Brazil Holds a Major Share in the Market
Brazil's functional beverage market benefits from the country's strong economy and health consciousness. The aging population is fueling the demand for functional beverages to prevent or overcome health conditions. The increasing number of single households and a growing mobile society are changing the food and beverage consumption pattern in favor of the convenience food industry. Thus, there is a rise in the demand for convenient food, including functional beverages. Chocolate-based flavored drinks have seen growth in the market due to their taste and enriched properties, as well as being anticipated to boost the overall market. The demand for energy drinks has increased as urbanization, disposable income, and health consciousness among Brazilian consumers have expanded. Energy drinks are widely popular among youngsters due to their claims to improve performance, endurance, and alertness. Adding to this, the increasing number of fitness centers and gyms in the country, owing to the rising number of fitness enthusiasts, is further propelling the growth of functional beverages like sports drinks and energy drinks in the market. The large consumer base in Brazil consuming functional beverages such as non-alcoholic beverages and energy drinks is contributing to the overall market's growth. The presence of several popular soda companies in the country further contributes to market growth.
