Fortified/Functional Beverages in Japan

PROSPECTS

New value emerges in fortified functional nectars

The growing interest in natural products is pervading all areas of health and wellness, including fortified/functional beverages. Launched in 2015 by Kirin Tropicana, a joint venture between Kirin and Tropicana, Tropicana Essentials pioneered the development of the functional juices segment in the Japanese market and remains a notable beneficiary of the trend towards functional products with a natural positioning.

Efforts for new fortified functional drink development

Kirin has been at the forefront of efforts to extend the fortified/functional segment beyond blocking fat absorption through the development of new areas of functionality and new target consumer groups. Kirin Supli, for example, is positioned as a health management drink for business people, which claims to help to reduce stress and fatigue.

Naturally healthy RTD green tea and naturally fortified juice products would take consumers from fortified/functional beverages

While Food with Function Claims certification and the general rise in health-consciousness are set to provide a spur to the development of fortified/functional beverages during the forecast period, the segment also faces constraints. The natural trend represents a challenge to functional products, which often contain added functional ingredients that are perceived to be at odds with demand for natural products.

COMPETITIVE LANDSCAPE

Coca-Cola Japan leads fortified/functional beverages in Japan

Coca-Cola retained the lead in fortified/functional beverages in 2017 with a 22% value share, though it saw its share fall by one percentage point for the second consecutive year. The company’s lead is primarily founded on its Aquarius brand, which leads FF sports drinks with a 44% value share.

FF juice, Tropicana Essentials, leads category development

The functional juice line, Tropicana Essentials, maintained a trend of strong current value growth in 2017, with sales up by 24%. Available in five variants offering different functional benefits, Tropicana Essentials is fortified with constituents such as calcium, iron and fibre.

FF energy drinks to maintain strong growth

FF energy drinks is set to continue growing strongly over the forecast period, posting a CAGR of 7% in value sales at constant 2017 prices. While global brands will further expand demand among younger generations in collaboration with sports and music events, classic Japanese brands, such as Otsuka’s market-leading, Oronamin C, and Suntory’s Dekavita C, are likely to introduce various flavour and format innovations, including the jelly format, to expand their consumer base, with a particular emphasis on generating sales amongst younger consumers.

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