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Growing Thirst for Hydration Products in Asia Pacific

6/5/2024
Nathanael Lim Profile Picture
Nathanael Lim Bio
Yang Hu Profile Picture
Yang Hu Bio
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With global warming and the growing demands of modern life, consumers in Asia Pacific recognise adequate daily hydration as a top health priority.

45% of respondents in Asia Pacific perceive drinking enough water as being healthy, with those aged 15-29 accounting for the highest response

Source: Euromonitor’s Voice of the Consumer: Health and Nutrition Survey, fielded January to February 2024

In response, hydration products have grown beyond the traditional categories of packaged water and sports drinks, and have expanded to include sports nutrition and powder concentrates.Chart showing survey responses

Sports drinks dominate hydration, while new categories like sports nutrition are set to grow fastest

In 2023, sports drinks in Asia Pacific accounted for USD6.6 billion, reflecting the category’s strong hydration credentials with consumers. Nevertheless, with the lines between beverages and nutrition blurring, competition within the space is set to emerge from new categories such as sports protein RTD (ready-to-drink) in consumer health, powder concentrates, and coconut and other plant waters.

Electrolytes are becoming increasingly popular in hydration products

While electrolytes are not new, there has recently been renewed interest in Asia with growing demand for hydration. Consumers are seeking electrolytes not just for sports activities but also to recover from heat-related fatigue and everyday illness. In China, brands have been newly launched such as Danone’s Mizone Electrolytes, containing coconut water and electrolytes, as well as Genki Forest’s Aliwave, which contains electrolytes and is a light lemon-flavoured drink.

The hydration space grows with the inclusion of more health-promoting ingredients, driven by consumers’ expanding needs

With an increase in health occasions addressed by functional beverages, coupled with consumers’ attention to the health-promoting ingredients in their products, beverage and sports nutrition brands are further segmenting their products by incorporating different healthy ingredients to cater to multiple consumer needs.

With multiple functionalities, hydration beverages serve to strengthen their health positioning. For example, in Singapore, F&N launched a new variant of its 100Plus Pro High Protein, which comes with protein to aid muscle support and BCAA for muscle recovery.

Plant-based waters are hydration options without the traditional sport positioning of sports drinks. While the category is relatively niche, it has also gained traction recently, especially in China. Examples include Genki Forest’s Red Bean and Coix Seed Water, which contains traditional ingredients and serves to replenish consumers, as well as Yi Zheng Gen’s ginseng water, which contains ginseng and appeals to consumers.

Convenient formats set to increase, catering to everyday occasions and budget-conscious consumers

Instead of bulky protein powders or heavy bottled drinks, consumers with everyday hydration needs prefer more portable and economical options for casual replenishment.

In Asia Pacific, sports protein RTD in consumer health and powder concentrates in soft drinks are expected to achieve CAGRs of 12% and 5%, respectively, in the forecast period 2023-2028

Source: Euromonitor International

For sports nutrition, 200-300ml small packages of protein RTD have become the preferred choice for consumers seeking muscle repair and recovery after exercise. According to the same health and nutrition survey, “ready-to-drink” and “portable” features are highly desired by consumers in Asia Pacific. 

Chart showing  desired sports nutrition featuresFor beverage products, the perception of convenience drives innovation in soluble powder concentrates. This appeals to consumers who are more budget-conscious, and where carrying concentrates is a practical on-the-go option for everyday occasions. For example, Unilever’s Liquid I.V., which is a leading powdered hydration brand, recently entered China. It has a strong health positioning that serves to provide everyday hydration. Similarly, multivitamin brand Vitadrop launched a hydration range in Australia in 2023, which contains multivitamins and electrolytes.

Opportunity lies in premium features and new hydration health benefits

To ensure brand success, brands need to consider the demographic, the specific hydration need states, and the level of market maturity to provide the appropriate product ingredients and format.

In developed markets South Korea, Japan and Australia, consumers with a higher disposable income are more willing to spend more on advanced hydration products, such as sports nutrition.

The broader regional opportunity lies in offering premium features with broader health benefits, such as stress relief or sleep aids. In China, leveraging electrolytes and natural ingredients, like goji and ginseng, is key for success given the huge consumer interest in traditional, plant-based health products. With greater consumer sophistication, brands need to constantly innovate and invest in functional ingredients to aid in hydration. This can be done through partnership with research and development firms to offer products backed by scientific research. In developing markets of Southeast Asia, affordability remains key given the low disposable income, and options like powder concentrates and small pack sizes could appeal to these consumers. All in all, brands must balance between pricing and product innovation offering hydration benefits to ensure their success in the long term.

For further insight and discussion of hydration, read our report, Hydration: The Gateway to Wellness. For consumer perceptions and behaviours on consumer health of young consumers in Asia, read our report, Health-Conscious Young in Asia: Focus on Consumer Health.

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