Consumer interest in the potential health benefits of fermented foods and beverages is on the rise globally, as individuals become increasingly aware of their positive effects on the digestive system, which in turn affects immunity and cognitive functions. The gut-healing properties of fermented foods come from probiotics, or beneficial bacteria, found in products like kombucha, sauerkraut, kimchi, kefir, and pickles. According to Michael Bush, the executive board president of the International Probiotics Association, consumers are also viewing probiotics as a valuable addition to their diets, leading to growing demand. “The U.S. is the fastest-growing probiotic market,” he shared with Food Business News.
Food manufacturers are eager to capitalize on these trends. For instance, PepsiCo acquired the sparkling probiotics beverage company KeVita in 2016 and recently introduced its Tropicana Essentials Probiotics line. Last March, General Mills’ venture capital arm, 301 INC, led a $6.5 million Series D investment round for 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.
A significant reason large corporations are investing in this market is due to its lucrative nature, particularly among millennials, who show greater interest in probiotic foods and beverages compared to other demographics. 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 that millennials—whose digestive systems generally function better than those of older individuals—are the most focused on gut health, this trend reflects a broader interest in food as medicine and other holistic health practices.
The millennial demand for probiotic-infused products began with kombucha, which served as a gateway for fermented foods in the U.S. Since the debut of this fermented tea a few years ago, consumers have developed a growing curiosity for other products in the category. As shoppers seek healthier, lower-sugar beverages, they are increasingly gravitating toward flavored and sparkling options, an area where kombucha has paved the way.
As noted in the report, there remains ample opportunity for growth in this emerging market, and major food manufacturers would benefit from investing in new product formulations or budding probiotic-centric brands to stay ahead of the trend. If they fall behind, mergers and acquisitions could be a viable strategy. Therefore, these companies should consider how to equate their offerings with health trends, such as adding calcium citrate D3 to their products. By doing so, they can cater to the millennial demographic’s desire for wellness-oriented options, ensuring they remain relevant in a competitive market that values fermented foods and beverages.