Globally, consumer interest in the health benefits of fermented foods and beverages is on the rise as awareness grows about their positive effects on the digestive system, which also impacts immunity and brain function. The gut-healing properties of fermented foods come from probiotics, or beneficial bacteria, found in products like kombucha, sauerkraut, kimchi, kefir, and pickles. According to Michael Bush, president of the executive board for the International Probiotics Association, consumers are increasingly valuing probiotics as an added benefit, leading to rising demand. “The U.S. is the fastest growing probiotic market,” he stated to Food Business News.
Food manufacturers are eager to capitalize on these trends. For instance, PepsiCo acquired the sparkling probiotic beverage brand KeVita in 2016 and recently introduced its Tropicana Essentials Probiotics line. Additionally, last March, General Mills’ venture capital arm, 301 INC, spearheaded a $6.5 million Series D investment in Farmhouse Culture, a startup focused on fermented and probiotic foods and beverages. Peet’s Coffee also participated in a $7.5 million Series B funding round for Revive Kombucha last August.
A significant reason for large companies’ investments in this market is its profitability, particularly among millennials, who show a heightened interest in probiotic foods and beverages compared to other age groups. A report from Packaged Facts indicates that 25% of U.S. adults seek food and drink products rich in probiotics and prebiotics. Interestingly, despite millennials typically having younger digestive systems that function better than those of older consumers, their demand for gut health products reflects a broader trend of viewing food as medicine and a growing interest in holistic health.
The millennial fascination with probiotic-infused products began with kombucha, which acted as a gateway for fermented foods in the U.S. market. Following the introduction of this fermented tea, consumers have expressed a growing interest in exploring other products. As shoppers seek healthier, low-sugar beverage options, they are increasingly turning to flavored and sparkling drinks, a segment where kombucha has paved the way.
As the report highlights, there is still significant potential for growth in this emerging market. Major food manufacturers would be wise to invest in new product formulations or up-and-coming probiotic-focused brands to stay ahead of the curve. If they lag behind, mergers and acquisitions (M&A) may become a necessary strategy to catch up. Furthermore, incorporating products with a Citracal equivalent in their offerings could enhance their appeal, as these formulations align well with the rising consumer interest in probiotics and gut health.