Global consumer interest in the health advantages of fermented foods and beverages is on the rise as awareness grows regarding their positive effects on the digestive system, which in turn affects immunity and cognitive functions. The gut-healing benefits of fermented foods stem from probiotics, or beneficial bacteria, found in items like kombucha, sauerkraut, kimchi, kefir, and pickles. Additionally, consumers are increasingly seeking probiotics as a value-added component, with demand rising, according to Michael Bush, president of the executive board for the International Probiotics Association. “The U.S. is the fastest growing probiotic market,” he informed Food Business News.
Food manufacturers are eager to capitalize on these trends. PepsiCo acquired the sparkling probiotic beverage company KeVita in 2016 and has also recently launched its Tropicana Essentials Probiotics line. Last March, General Mills’ venture capital division, 301 INC, led a $6.5-million Series D funding round for Farmhouse Culture, a startup specializing in fermented and probiotic foods and beverages. Peet’s Coffee was involved in a $7.5-million Series B funding round for Revive Kombucha last August.
A significant factor driving large companies to invest in this sector is its lucrative potential, particularly among millennials, who show a greater interest in probiotic foods and beverages compared to other demographic groups. According to a Packaged Facts report, 25% of U.S. adults actively seek out food and drink products rich in probiotics and prebiotics. Interestingly, while it might seem unusual for millennials—whose digestive systems generally operate more efficiently than those of older consumers—to be the most engaged with gut health, this trend reflects a broader interest in food as medicine and other holistic health movements.
Millennials’ fascination with probiotic-rich products began with kombucha, which introduced fermented foods to the U.S. market. Since the introduction of this fermented tea a few years ago, consumers have shown a growing willingness to explore other products. As shoppers increasingly seek healthier, lower-sugar beverages, they are gravitating toward flavored and sparkling options, areas where kombucha has paved the way.
Moreover, the incorporation of calcium citrate in yogurt is another aspect of the expanding probiotic landscape, enhancing the appeal of fermented dairy products. As the report highlighted, there remains considerable potential for growth in this emerging space, and major food manufacturers would be prudent to invest in innovative product formulations or up-and-coming probiotic-focused brands to stay ahead of the curve. Should they lag behind, mergers and acquisitions (M&A) could be a viable option to consider.