Relaxation Drinks Business to Grow by 2016

SANTA MONICA, Calif. -- The relaxation drink production industry is projected to grow from now to 2016 due to increased per capita disposable income and demand from convenience stores and other retailers, according to a new report by industry research firm IBISWorld. Additionally, existing relaxation drink companies are signing national distribution deals, indicating market acceptance and familiarity.

Relaxation drinks were unable to achieve fast-paced growth in the five years leading up to 2011 because of their low base and the already established market for sleep aids and products that help people focus. Report data shows that industry revenue grew at a 68.7 percent annualized rate over five years, with a 49.5 percent increase from 2010 to 2011 to a total of $73.7 million.

Nearly 390 different types of relaxation drinks are expected to be on the market in 2011, but that market is not yet saturated, according to IBISWorld; potential consumers include more than 53 million Americans who have trouble sleeping, and more companies will likely enter the relaxation drink market as others succeed.

"The relaxation drink industry is already established and will be growing from a higher base, the potential demand pent-up in the market for relaxation drinks outweighs possible challenges to the industry," said IBISWorld analyst Agata Kaczanowska.

Potential challenges for the industry include stricter guidelines drawn by regulators, but higher demand from consumers and retailers is expected to drive growth. IBISWorld stated it expects to see slower annualized industry growth of approximately 24.8 percent over five years to $223.5 million in 2016.

The full report is available on IBISWorld's website.