Functional Food Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Functional Food Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Global Functional Food Market was valued at USD 176,518.97 million in 2020 and the market is projected to grow at a CAGR of 2.71% during the forecast period 2021-2026.

The market was positively impacted by COVID-19 in 2020. The global pandemic has shown an impact on the proper functioning of the functional food in various region. The COVID-19 has also vastly accelerated consumers interest in health diet, with a considerable up-tick in the number of people who expect the food they eat to deliver functional benefits, including immunity. The pandemic resulted in the generation of opportunities for many private players to emerge in the markets to cater to the inflated demand for functional food products, which in turn benefited the emerging manufacturers. In addition, consumers are now ready to experiment with new products, especially plant-based or vegan, which has prompted companies to look at interesting and affordable products.

Over the medium term, functional food offers specific health benefits that are beyond the regular daily intake of nutrients, such as, improved mental energy, immune system strengthening, improved bone health, cholesterol management, improved heart health, and other benefits associated with eye health and vision.

Utilizing ingredients, such as natural food/beverage colors, low-calorie natural sweeteners, and kosher ingredients, is in vogue. Manufacturers are embracing innovation to gain cost-leadership and fixed suppliers in the early development stage. One of the major advantages of functional food is that consumers are readily paying a premium for its various functional advantages.​

Key Market TrendsIncreasing Consumption of Nutrient-Enriched Food to Enhance Overall Health

The growing population and change in food fashion among people are the major drivers for the market. Individuals are more concerned about health and are willing to pay extra for food that is specifically beneficial to health. Therefore this tendency and awareness among people help the functional food market to grow. The increasing demand for nutrient-enriched foods, due to the hectic lifestyles of people and the rising awareness of the health benefits of these foods among them, is predicted to drive market growth. This has led the consumer interest in diet and health, which increased the demand for functional foods. Moreover, consumers are inclined toward foods containing functional ingredients to reduce the risk of certain health conditions, such as obesity, weight management, diabetes, and cardiovascular diseases. The hectic lifestyles and increasing stress have contributed to the increasing prevalence of such health disorders.

Asia-Pacific Dominates the Market

Asia-Pacific is the major markets for functional food products. Increasing consumer interest, and a better understanding of the immunity-enhancing property of proper diet and food habits, are some of the key factors driving the growth of regions vitamin fortified and mineral enriched food & beverage products sale. Moreover, in countries such as Japan and China, manufacturers are becoming more creative with dairy packaging, ingredients, and flavors, hence, introducing fortified variants easily, which in turn boosting the functional food market. Yogurt, owing to its multifunctional attributes, holds great prominence among consumers. A large section of the Chinese population is lactose intolerant, and hence, the consumers find plant-based yogurt to be a relatively better option due to its fermented nature, which makes it easily digestible. For instance, in May 2021, the Chinese plant-based snacking company, Marvelous Foods, launched its flagship store for its signature product Yeyo Coconut yogurt on the e-commerce platform, Tmall. Yeyo is plant-based coconut yogurt, which has zero added sugar, artificial flavors, and sweeteners. The initial launch features three SKUs, and the range includes a ‘pure’ sugar-free flavor, plus two yogurt-granola cups that have seasonal fruit and nut granola topping for flavor and nutrition.

Competitive Landscape

Global functional food market is fragmented and competitive in nature having a large number of domestic and multinational players competing for market share. Companies focusing on new product launches with healthier ingredients/organic claims along with acquisition, merger, partnership, and expansions as their key marketing strategy. Some of the major players in the market studied are Danone SA, Nestle SA, PepsiCo Inc., The Kellogg's Company, and Abbott Laboratories. Key players are now focusing on social media platforms and online distribution channels for their products’ online marketing and branding to attract more customers. In order to attain a larger share in the market studied, manufacturers are revitalizing their product portfolios targeting health-conscious consumers.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned
 
Lotus Bakeries
Nestle SA
Hearthside Food Solutions LLC
Valio Eesti AS
The Kellogg's Company
Abbott Laboratories
PepsiCo Inc.
Danone SA
Clif Bar & Company
General Mills

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