The most dramatic growth was seen by fortified/functional (FF) other hot drinks in 2021, thanks to the boost to demand for Milo from Nestlé Japan. The Milo brand accounts for most sales of FF plant-based and malt-based hot drinks in Japan, and is perceived to be a healthy and nutritious hot drinks option.
FF carbonates and FF concentrates continued to post retail current value declines in 2021, with demand stalling as consumers remained at home. Concerns over the rising number of cases of COVID-19 in Japan continued for most of 2021, which encouraged consumers to limit their movement outside the home due to fears of infection.
FF energy drinks continued to grow in 2021. With home seclusion and working from home during COVID-19, more people started to buy energy drinks for refreshment.
FF beverages is set to rebound more strongly in both retail volume and current value terms in 2022, recovering to almost the same level of sales as before the pandemic. Growth is then expected to slow down, but slow and stable growth is expected over the rest of the forecast period.
Traditionally, the key target audience for FF chocolate-based flavoured powder drinks and malt-based hot drinks was children, but the changing demographic make-up of Japan means that companies will have to expand their consumer base or risk seeing sales decline. With an already low birth rate that continues to decline, the focus is expected to shift towards the needs of older consumers in Japan, with the country having the world’s oldest population.
Even after COVID-19 is contained, people are expected to remain sensitive to viruses and illness. To address such a consumer sentiment, new product development with a focus on immunity support is expected to continue in the forecast period.
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This category includes fortified/functional beverages. When identifying fortified/functional products, we focus on products to which health ingredients or/and nutrients have been added as well as brands that are positioned to deliver a certain functionality. To be included here the enhancement has to be highlighted in the label or hold a health claim/nutritional claim. Fortified/functional food and beverages provide health benefits beyond their nutritional value and/or the level of added ingredients wouldn’t normally be found in that product. To merit inclusion in this category, the defining criterion here is that the product must have been actively fortified/enhanced during production. As such, inherently healthy products such as 100% fruit/vegetable juices are only included under "fortified/functional" if additional health ingredients (e.g. calcium, omega-3) have been added. To be included, the health benefit needs to form part of positioning/marketing of the product.See All of Our Definitions
This report originates from Passport, our Fortified/Functional Beverages research and analysis database.
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