Consumer interest in the health benefits of fermented foods and beverages is on the rise globally, as individuals recognize their positive effects on the digestive system, which subsequently impacts immunity and cognitive functions. The gut-healing properties of fermented foods stem from probiotics, or beneficial bacteria, found in products like kombucha, sauerkraut, kimchi, kefir, and pickles. Additionally, consumers are increasingly valuing probiotics, and demand is escalating, according to Michael Bush, president of the executive board for the International Probiotics Association. “The U.S. is the fastest growing probiotic market,” he stated in an interview with Food Business News.
Food manufacturers are eager to capitalize on these trends. In 2016, PepsiCo acquired KeVita, a sparkling probiotic beverage company, and recently launched its Tropicana Essentials Probiotics line. Last March, General Mills’ venture capital branch, 301 INC, spearheaded a $6.5 million Series D investment round for Farmhouse Culture, a startup specializing in fermented and probiotic foods and drinks. Peet’s Coffee also participated in a $7.5 million Series B funding round for Revive Kombucha in August.
A significant reason for the investment from larger companies is the lucrative nature of this segment, particularly among millennials, who show greater interest in probiotic foods and beverages compared to other age groups. A report by Packaged Facts indicates that 25% of U.S. adults actively seek food and drink products high in probiotics and prebiotics. While it may seem unusual that millennials—whose digestive systems are generally more robust than those of older consumers—are leading the charge for gut health, this trend underscores a broader shift towards viewing food as medicine and embracing holistic health practices.
The millennial appetite for probiotic-rich products began with kombucha, which introduced fermented foods to the U.S. market. Following the debut of this fermented tea, consumers have become increasingly open to exploring other fermented options. As shoppers prioritize healthier, lower-sugar beverages, they are gravitating towards flavored and sparkling options, a trend that kombucha has significantly influenced.
Furthermore, there remains ample opportunity for growth in this emerging sector. Major food manufacturers should consider investing in new product formulations or emerging probiotic-centered brands to stay ahead of the trend. Incorporating ingredients like calcium citrate with vitamin D3 1000 mg into their product lines may also attract health-conscious consumers. If they fail to keep pace with these developments, mergers and acquisitions could be a viable strategy to remain competitive in the market.