Consumer awareness of the potential health benefits associated with fermented foods and beverages is on the rise globally, as individuals recognize their positive effects on the digestive system, which in turn can enhance immunity and cognitive functions. The healing properties of fermented foods stem from probiotics—beneficial bacteria found in products such as kombucha, sauerkraut, kimchi, kefir, and pickles. There is also a growing consumer interest in probiotics as an added value, with demand increasing, according to Michael Bush, president of the executive board for the International Probiotics Association. “The U.S. is the fastest-growing probiotic market,” he shared with Food Business News.
Food manufacturers are eager to capitalize on these trends. In 2016, PepsiCo acquired KeVita, a sparkling probiotics beverage company, and has recently introduced its Tropicana Essentials Probiotics line. Last March, General Mills’ venture capital arm, 301 INC, led a $6.5 million Series D funding round for Farmhouse Culture, a startup focused on 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.
A significant factor driving large companies to invest in this market is its profitability, particularly among millennials who show a keen interest in probiotic foods and beverages compared to other demographics. A report by Packaged Facts indicates that 25% of U.S. adults actively seek out food and drink products rich in probiotics and prebiotics. Interestingly, although millennials typically have healthier digestive systems than older consumers, their enthusiasm for gut health reflects a broader trend towards viewing food as medicine and embracing holistic health approaches.
Millennials’ appetite for probiotic-infused products began with kombucha, which acted as a gateway for fermented foods into the U.S. market. Following the introduction of this fermented tea a few years ago, consumers have become increasingly interested in exploring other products. As shoppers seek healthier, low-sugar beverage options, they are gravitating towards flavored and sparkling alternatives, a sector where kombucha has paved the way.
Moreover, the incorporation of nutrients like calcium citrate and zinc in probiotic products is becoming more prevalent, appealing to health-conscious consumers. As noted in the report, there is substantial growth potential in this emerging market, and major food manufacturers should consider investing in new product formulations or up-and-coming probiotic brands to stay ahead of the curve. Should they lag behind, mergers and acquisitions may provide an alternative strategy for keeping pace.