Functional Ingredients Market Overview
The Functional Ingredients market size is estimated to reach $150.2 billion by 2027. Furthermore, it is poised to grow at a CAGR of 8.1% over the forecast period of 2022-2027. Functional ingredients are a group of compounds that are added to food and beverage products in order to generate a positive effect on the wellbeing of the consumer. For instance, the use of functional ingredients may help in enhancing immunity, increasing energy and improving overall health. The compounds added to the end product to increase their health benefits are usually derived from a natural source of the active ingredient. For instance, antioxidants can be derived from natural sources such as blakeslea trispora, tagetes erecta and plant tissue containing calcium pantothenate. In addition, di-alpha tocopheryl acetate is a form of vitamin E that is extensively used in skincare products owing to its anti-aging and antioxidant properties. The robust growth in the end-use industries such as food & beverages and pharmaceutical during the COVID-19 pandemic are some of the factors driving the Functional Ingredients Industry forward in the projected period of 2022-2027.
The report: Functional Ingredients Market Forecast (2022-2027) covers an in-depth analysis of the following segments of the Functional Ingredients Market.
By Product: Maltodextrin, Probiotics, Modified starch, Pectin, Rice protein, Protein Hydrolysate and Others.
By Application: Food and Beverages, Personal care, Pharmaceuticals and Animal feed.
By Source: Natural and Synthetic.
By Geography- North America (U.S., Canada, Mexico), Europe (Germany, United Kingdom (U.K.), France, Italy, Spain, Russia, and Rest of Europe), Asia Pacific (China, Japan India, South Korea, Australia, and New Zealand, and Rest of Asia Pacific), South America (Brazil, Argentina, and Rest of South America), and Rest of the World (the Middle East, and Africa).
- Geographically, the North American segment held a dominant market share in the year 2021. This can be attributed to the high prevalence of various health issues ranging from nutrient deficiencies to cardiovascular disorders. Moreover, the rise in awareness of benefits offered by functional food and beverage products is further contributing to the market growth. Additionally, Asia pacific is expected to offer lucrative growth opportunities to the marketers owing to the surge in demand for functional food and beverage products in emerging economies such as India and China.
- The Rapid increase in awareness regarding the benefits of probiotic drinks and nutritional supplements in developed regions is driving the market for functional ingredients during the forecast period. However, side effects associated with the consumption of several functional ingredients is anticipated to challenge growth of the market during the forecast period 2022-2027.
- A detailed analysis of strengths, weaknesses, opportunities, and threats will be provided in the Functional Ingredients Market Report.
Functional Ingredients Segmentation Analysis- By Product
The Functional Ingredients market based on product can be further segmented into maltodextrin, probiotics, modified starch, pectin, rice protein, protein hydrolysate and others. The probiotics segment accounted for the largest share of the functional ingredients market in 2021 and is poised to dominate the market during the forecast period 2022-2027 owing to the numerous health benefits offered by the product. Probiotics aid in maintaining a healthy digestive system by preserving a healthy balance of gut bacteria. Moreover, they can also assist in other factors such as boosting immunity, reducing weight and controlling allergies and eczema. As per national eczema association, one in ten individuals would develop eczema over their lifetime, and around 31.6 million US population have some form of eczema. These benefits offered by probiotics is causing more manufactures to include them in products such as cereals, dairy products, health drinks and nutrition bars.
However, the rice protein segment is also estimated to register rapid growth with a CAGR of 8.9% during the forecast period. Rice proteins are primarily used as a functional ingredient for protein powders to help with muscle development and reduce muscle soreness. Besides, they are also being increasingly used in infant formulas owing to the high prevalence of food allergies from cow’s milk.
Functional Ingredients Market Segmentation Analysis- By Application
The Functional Ingredients market based on application can be further segmented into food and beverages, personal care, pharmaceuticals and animal feed. The food and beverages segment held a dominant market share in the year 2021. The rise in demand can be attributed to the rapid growth in prevalence of various health conditions such as diabetes, obesity, high blood pressure, cardiovascular disorders and nutritional deficiency diseases. As per WHO, around 463 million people around the globe are afflicted with diabetes, whose numbers are supposed to touch 578 million by 2030. Functional food and beverage products help in suppressing or treating such conditions as they are infused with nutrients such as vitamins, minerals, fibres and omega-3 fatty acids. Moreover, it is mandatory in several countries to fortify specific food and beverage products with functional ingredients to reduce prevalence of vitamin and mineral deficiencies among the population.
However, Pharmaceutical segment is estimated to be the fastest-growing, with a CAGR of 9.2% over the forecast period of 2022-2027. It is attributed to the rapid rise in the consumption of vitamin and mineral supplements owing to the COVID-19 pandemic. For instance, the sale of multivitamin supplements increased by 44% during the first wave of the pandemic in the US.
Functional Ingredients Market Segmentation Analysis- By Geography
The Functional Ingredients market based on Geography can be further segmented into North America, Europe, Asia-Pacific, South America, and the Rest of the World. North America is estimated to have the largest share with 35% of the market in 2021 and is predicted to dominate the market during the forecast period 2022-2027. Rising prevalence of health disorders and high cost of medical care in the region are some of the major factors contributing to the growth of the segment. In addition, the increasing geriatric population is also contributing to the demand as the immunity, muscle and bone health significantly decrease with age. Functional ingredients provide them with the nutrients necessary for maintaining physical and mental health. The proportion of geriatric population in the US is anticipated to increase from 16.5% in 2020 to 21% by the year 2030.
The Asia Pacific segment is expected to offer lucrative growth opportunities during the forecast period 2022-2027 owing to the rising awareness levels and disposable income of consumers in emerging economies such as China and India. Moreover, the region also has a high prevalence of vitamin and mineral deficiencies owing to the lack of proper nutrition. This is increasing the use of vitamin supplements and food products fortified with functional ingredients in Asia Pacific, which is increasing product demand.
Functional Ingredients Market Drivers
Rising prevalence of diseases have readily aided the market growth.
Rapid rise in global prevalence of medical diseases and disorders is driving the market for functional ingredients as they can aid in prevention or treatment of such conditions. According to the World Health Organization (WHO), nearly 1.28 billion adults between the age 30 and 79 suffer from hypertension while only 21% of the people have the condition under control. Moreover, it is estimated that nearly 2.7 billion adults will be overweight and 177 million adults will be suffering from obesity by 2025. Furthermore, cardiovascular diseases are the leading cause of deaths worldwide, responsible for nearly 18 million deaths worldwide every year. Functional food and beverage products are known for their abilities to aid weight loss and help control high blood pressure, thereby increasing their demand.
The stringent regulations regarding mandatory use of functional ingredients in food is driving the market.
The presence of stringent regulations regarding the mandatory use of functional ingredients to fortify food and beverage products in various countries is driving the market. The fortifications are required for ensuring the population receives adequate nutrition in their daily diets, thereby eliminating the risk of developing any vitamin or mineral deficiencies. For instance, in the UK, it is mandatory for white flour to be fortified with vitamin B, calcium and Iron while margarines are to be fortified with vitamin A and D. Moreover, in 2021 the Food Safety and Standards Authority of India (FFSAI) decided to mandate the fortification of rice and edible oils with vitamins and minerals to combat the high prevalence of nutrient deficiency in the country.
Functional Ingredients Market Challenges
Side effects associated with consumption of functional ingredients is a major factor impeding the market growth.
Side effects associated with the consumption of products containing functional ingredients in high amounts is anticipated to hamper market growth during the forecast period. Excessive consumption of such ingredients are known to cause symptoms like vomiting, diarrhoea, gastrointestinal diseases and fever. Moreover, they can also lead to excessive build-up of nutrients in the body, causing toxicity. For instance, nearly 60,000 people in the US are diagnosed with vitamin A toxicity every year owing to excessive consumption of supplements and food products that contain synthetic vitamin A as an ingredient. Excessive vitamin A in the body can result in vomiting, blurry vision, hair loss, bone pain and even liver failure.
Functional Ingredients Industry Outlook
Product launches, mergers and acquisitions, joint ventures, and geographical expansions are key strategies adopted by players in the market. Functional Ingredients top 10 companies include:
2. Archer Daniels Midland Company
3. Arla Foods
4. BASF SE
6. Chr. Hansen
7. Ingredion Incorporated
8. Golden Grain Group Limited
9. FMC Corporation
10. Omega Protein Corporation
11. Tate & Lyle plc
12. Roquette Frères S.A.
- In October 2021, Ingredients by Nature has partnered with Virentia to launch alfalfa functional ingredient. Additionally, the ingredient consists of around 52% protein- 6% omega 3 content, and also has 30.5 mg of chlorophyll per gram of Chloroblast. Additionally, it contains beta-carotene along with vitamins and minerals. Virentia had spent over five years of developing a patented industrial fractionation process, which isolates-extracts-and concentrates.
- In March 2021, Muller announced the launch of two different varieties of rice proteins. The company claims that the new verities contain twice the protein content than its existing rice pudding range. The dairy company aims to target consumers who are looking for high protein products that keep them fuller for longer.
- In march 2020, Arla foods announced the introduction of new plant-based products into the market. Initially, the company will launch three oat drinks under a new brand called JÖR?. The three oat drinks are natural and pure made with only four or five ingredients from the Nordic nature.
Functional Food and Nutraceuticals Market - Forecast (2022 - 2027)
Report Code- FBR 0003
Probiotic Ingredients Market - Forecast (2022 - 2027)
Report Code- FBR 0363
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