Global Functional Food Market - 2023-2030

Global Functional Food Market - 2023-2030

The Global Functional Food Market reached US$ 195.4 billion in 2022 and is expected to reach US$ 316.1 billion by 2030 growing with a CAGR of 6.2% during the forecast period 2023-2030.

One significant opportunity of the functional food market is the potential to address specific health concerns and target diverse consumer needs. Functional foods can be formulated to provide targeted health benefits, such as supporting cardiovascular health, boosting immunity, improving digestion, promoting weight management, or addressing nutritional deficiencies. One prominent trend in the functional food industry is the growing demand for plant-based and sustainable options.

The integration of nutraceuticals into functional food allows consumers to conveniently and easily incorporate beneficial compounds into their everyday diets. It provides an alternative to traditional supplement consumption by offering a more practical and enjoyable approach to obtaining specific health-enhancing nutrients. Fiber enriched foods are a prime example of functional food that offers additional health benefits through the incorporation of dietary fiber. Dietary fiber is a type of carbohydrate found in plant-based foods that cannot be fully digested by the human body. When added to food products, fiber provides various functional and physiological effects.

Market Dynamics

Increasing Consumption of Nutrient-enriched Food Drives Functional Foods Market

Nutrient-enriched foods allow consumers to target specific health concerns or meet specific dietary requirements. For example, fortified foods can address deficiencies in iron, calcium, vitamin D, or omega-3 fatty acids, catering to the needs of specific populations such as pregnant women, athletes, or individuals with specific medical conditions. The aging population is more concerned about maintaining their health and vitality.

Functional foods that support healthy aging, cognitive function, bone health, and immune function are increasingly sought after by this demographic. One in six individuals on the globe will be 60 or older by 2030. By this time, there will be 1.4 billion people over the age of 60, up from 1 billion in 2020. The number of individuals in the world aged 60 or older will double (to 2.1 billion) by 2050. Between 2020 and 2050, the number of people 80 or older is projected to reaching 426 million.

Food and Beverage Manufacturers are Deploying Fortification of Nutritional Additives Which Drives Functional Food Market Growth

Food and beverage manufacturers are increasingly incorporating fortification of nutritional additives into their products, driving the growth of the functional food market. This trend is fueled by several factors, including rising consumer awareness of the importance of nutrition and a growing demand for products that offer additional health benefits. Fortifying food with essential vitamins, minerals, antioxidants, and other bioactive compounds allows manufacturers to enhance the nutritional profile of their products and meet the evolving needs of health-conscious consumers.

The increase in the nutritional functional food product launches helps to boost the market growth. For instance, on November 02, 2022, Geno, a food and beverage manufacturer entered into the functional foods and beverages market with the launch of new functional ingredient, Avela natural (R)-1,3-Butanediol. The innovative, sugar-free product, which will make its public premiere at SupplySide West 2022 in Las Vegas, provides a quick, simple, and convenient solution to increase levels of beta-hydroxybutyrate (BHB) ketone, the main energy source produced in the body during ketosis.

High Cost of the Functional Food Hampers Market Growth

Functional foods often require specialized formulations, ingredients, and production processes, which can increase their production costs. These higher costs are passed on to consumers, making functional foods relatively more expensive compared to conventional food products. As a result, price sensitivity among consumers becomes a barrier, limiting the broader adoption and accessibility of functional foods.

The high cost of functional food can deter price-conscious consumers from regularly incorporating these products into their diets. It may also restrict the market to a niche segment of health-conscious individuals who are willing to pay a premium for the added benefits. The affordability gap between functional foods and conventional alternatives can lead to a slower market penetration and limit the potential consumer base.

COVID-19 Impact

The pandemic has disrupted global supply chains, impacting the availability and distribution of various food products, including functional foods. This disruption has led to challenges in sourcing functional ingredients and manufacturing processes, resulting in potential supply shortages or delays. The closure of retail outlets and restrictions on in-person shopping have accelerated the growth of online food sales. Functional food companies have had to adapt by expanding their e-commerce capabilities and focusing on online marketing and sales channels.

The pandemic has posed challenges for new product launches and innovation in the functional food sector. Restrictions on in-person events and gatherings have limited opportunities for product showcases, tastings, and consumer engagement. The pandemic has affected research and development activities related to functional foods. Clinical trials and studies may have been delayed or disrupted due to restrictions on human subjects and laboratory access. This could impact the introduction of new functional food ingredients and formulations in the market. The economic impact of the pandemic has affected consumer purchasing power and discretionary spending. Some consumers may be more price-conscious and prioritize essential food items over functional foods, leading to potential shifts in buying patterns.

Russia-Ukraine Impact Analysis

Political tensions potentially lead to changes in regulatory environments, including food safety regulations and labeling requirements. Companies operating in the functional food industry need to navigate through new or modified regulations, which impact their product formulations, labeling, and compliance processes. Political tensions impacted consumer perceptions and confidence in products from the opposing country. Negative sentiments or biases may influence consumer choices, leading to a decline in the demand for functional food products originating from other country. This can create challenges for companies trying to establish or maintain a strong market presence.

Political tensions also hamper collaboration and research opportunities between Russia and Ukraine in the field of functional foods. Joint research projects, knowledge sharing, and partnerships may face challenges or delays, impacting the advancement of functional food science and innovation in both countries.

Segment Analysis

The global functional food market is segmented based on ingredient, product, application, and region.

Increased Demand for Prebiotics & Dietary Fibers Ingredients in Food and Beverage Industry Drives Segment Growth

The global functional food market by ingredient has been segmented by probiotics, minerals, proteins & amino acids, prebiotics & dietary fibers, vitamins and others.

Prebiotics and dietary fibers are key ingredients often incorporated into functional foods due to their significant health benefits. Prebiotics are non-digestible fibers that selectively stimulate the growth and activity of beneficial bacteria in the gut, promoting a healthy gut microbiome. Dietary fibers, on the other hand, include a range of plant-based carbohydrates that are not digested by human enzymes but provide important physiological effects.

Prebiotics and dietary fibers act as nourishment for beneficial gut bacteria, promoting their growth and activity. They help maintain a healthy balance of gut microbiota, which plays a crucial role in digestive health, immune function, and overall well-being. An increase in the new product launches with the cream filled wafers helps to boost segment growth over the forecast period. In October 2021, OptiBiotix Health PLC launched SnackSmart Fruit & Fibre gummies. It promotes a healthy gut via a blend of non-digestible prebiotics and dietary fiber glucomannan, and chromium.

Geographical Analysis

The Increased Demand for Functional Food in North America

The United States and Canada are major share-holding countries in the region due to increasing demand for functional food from health-conscious consumers. The United States has a large population that is increasingly focused on health and wellness. Consumers are actively seeking out food products that offer additional nutritional benefits and functional properties. Canadian food manufacturers are investing in research and development to enhance the nutritional profiles and functional properties of their products.

Canadian consumers are increasingly concerned about the environmental and ethical aspects of their food choices Also, an increase in the merger, acquisition and partnership strategies in the region drives market growth. For instance, on November 17, 2022, An broad line of plant-based seafood substitutes will be developed through a new partnership between Canadian companies Konscious Foods, Merit Functional Foods, and Canadian Pacifico Seaweeds.

Competitive Landscape

The major global players include Lotus Bakeries, Nestlé S.A., Hearthside Food Solutions LLC, Valio Eesti AS, The Kellogg's Company, Abbott Laboratories, PepsiCo Inc., Danone SA, Clif Bar & Company and General Mills.

Why Purchase the Report?
• To visualize the global functional food market segmentation based on ingredient, product, application, and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of functional food market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as Excel consisting of key products of all the major players.

The global functional food market report would provide approximately 63 tables, 65 figures and 122 Pages.

Target Audience 2023
• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies