Global consumer interest in the potential health benefits of fermented foods and beverages is on the rise as awareness grows regarding their positive effects on the digestive system, which in turn impacts immunity and brain functions. The gut-healing properties of fermented foods are largely attributed to 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 seeing probiotics as a valuable addition to their diets, leading to a surge in demand. “The U.S. is the fastest growing probiotic market,” he stated in an interview with Food Business News.
Food manufacturers are eagerly capitalizing on these trends. In 2016, PepsiCo acquired KeVita, a sparkling probiotics beverage maker, and has recently launched its Tropicana Essentials Probiotics line. Last March, General Mills’ venture capital arm, 301 INC, led a $6.5 million Series D investment round to support Farmhouse Culture, a startup specializing in fermented and probiotic foods and beverages. Additionally, Peet’s Coffee participated in a $7.5 million Series B funding round for Revive Kombucha last August.
One significant reason large companies are investing in this sector is its profitability, especially among millennials, who show a keen interest in probiotic foods and drinks compared to other demographics. A report by Packaged Facts revealed that 25% of U.S. adults actively seek food and beverages rich in probiotics and prebiotics. Interestingly, this interest in gut health among millennials, who generally have more efficient digestive systems than older consumers, reflects a broader trend of viewing food as medicine and embracing holistic health approaches.
The millennial fascination with probiotic-enriched products began with kombucha, which acted as a gateway for fermented foods in the U.S. market. Following the introduction of this fermented tea a few years ago, consumers have become increasingly curious about other products in the category. As shoppers seek healthier, lower-sugar beverage options, they are gravitating toward flavored and sparkling alternatives, a trend that kombucha has significantly influenced.
As noted in the report, there remains ample opportunity 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. Should they lag behind, mergers and acquisitions may become a necessary strategy for keeping pace with the evolving landscape. Furthermore, incorporating innovations like 21st century calcium citrate with vitamin D could enhance product offerings, aligning with consumer interests in health and wellness.