Functional Food Ingredients Global Market Report 2024

The functional food ingredients market size has grown strongly in recent years. It will grow from $110.61 billion in 2023 to $120.27 billion in 2024 at a compound annual growth rate (CAGR) of 8.7%. The expansion observed in the historical period can be attributed to the increasing health consciousness, the rising incidence of lifestyle-related diseases, consumer demand for natural and clean label products, research and development in nutraceuticals, and collaboration between the food and pharmaceutical industries.

The functional food ingredients market size is expected to see strong growth in the next few years. It will grow to $175.25 billion in 2028 at a compound annual growth rate (CAGR) of 9.9%. The anticipated growth in the forecast period can be attributed to personalized nutrition and customization, the integration of functional ingredients in conventional foods, a focus on mental and cognitive health, the expansion of the senior population, and e-commerce and direct-to-consumer trends. Major trends expected in the forecast period include advancements in food biotechnology, progress in food science and technology, a rising demand for plant-based ingredients, a focus on gut health ingredients, and the emergence of adaptogens.

The functional food ingredients market is anticipated to grow owing to the rising demand for fortified food and beverage products. Fortified foods, which lack natural nutrients, have additional nutrients incorporated to enhance nutrition and provide health benefits. The consumption of fortified food and beverage products is on the rise due to increasing health consciousness, a surge in disease occurrences, and growing disposable income. A report by Common Thread Collective indicates significant global sales growth in the food and beverage sector, reaching $506 billion in 2022 and expected to reach $857 billion by 2025. The increased demand for fortified food and beverage products is a key driver for the growth of the functional food ingredients market.

The functional food ingredients market is anticipated to grow due to the rising demand for dairy products. Dairy products, derived from the milk of various mammals, offer opportunities for incorporating functional food ingredients to enhance nutritional value, digestive health, bone health, weight management, blood sugar regulation, and flavor. Notably, flavored milk sales in the U.S. experienced an increase, with sales climbing to $1,646.5 million in dollars and $658.2 million in units, according to Dairy Foods Magazine. This surge in dairy product demand contributes to the growth of the functional food ingredients market.

Major companies are actively innovating new products such as dietary supplements to sustain their market position. Dietary supplements, designed to supplement the diet with additional nutrients, are a key focus. For example, in November 2021, The Nature's Bounty Co., a US-based brand of health and wellness products, introduced a jelly bean vitamin line. These fruit-flavored, vegetarian jelly bean vitamins aim to offer a tasty and entertaining way to promote various aspects of wellness, catering to both adults and children.

Major companies are focusing on innovative products such as probiotic starter cultures to drive revenues. Probiotic starter cultures typically contain various yeast strains and lactic acid bacteria (LAB) that aid in fermentation and produce metabolites enhancing the end product's quality attributes. For example, in September 2023, Royal DSM N.V., a Netherlands-based science-based company, launched delvo fresh pioneer. These cultures exhibit remarkably stable pH for up to 60 days in cold storage, making them suitable for high-value recipes such as mild, reduced-sugar yogurts and smooth, creamy yogurts.

In July 2021, Kerry Group, an Irish food company, revealed its acquisition of Biosearch Life in a deal valued at $150 million. This strategic move allows Kerry Group to expand its portfolio of healthy ingredients, including probiotics and omega-3. The addition of Biosearch Life, a biotechnology company based in Spain specializing in manufacturing natural ingredients such as Omega-3, Probiotics, and Botanical Extracts, enhances Kerry Group's capabilities in the functional foods and proactive health ingredients sectors.

Major companies operating in the functional food ingredients market report are Cargill Incorporated, Nestle, Archer Daniels Midland Company, BASF SE, Arla Foods amba, Koninklijke DSM NV, Ajinomoto, Kerry Group, Ingredion Incorporated, Glanbia PLC, DuPont Nutrition & Biosciences, FMC Corporation, Roquette Frères, Royal Cosun, Ashland, Tate & Lyle PLC, Corbion N.V., Brevel, Chr. Hansen Holding A/S, Kemin Industries Inc., Ginkgo BioWorks, Naturex, Beneo, Fuerest Day Lawson, The Every Company, Nuritas, Foodchem International Corporation, Global Specialty Ingredients (GSI), A&B Ingredients, Shiru Inc., Native Pet, Sophie's Bionutrients Pte. Ltd., Clean Food Group, Paragon Pure, Canomiks.

North America was the largest region in the functional food ingredients market in 2023. Europe was the second-largest market in the functional food ingredients market. The regions covered in the functional food ingredients market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the functional food ingredients market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The primary types of functional food ingredients encompass probiotics and prebiotics, carotenoids, dietary fibers, fatty acids, vitamins, minerals, and others. Carotenoids, fat-soluble pigments found in fruits, flowers, plants, algae, and bacteria, serve as antioxidants for human health, guarding against disorders such as heart disease, cancer, and degenerative eye diseases. These ingredients, available from natural or synthetic sources, are utilized in various products such as beverages, dairy items, infant food, bakery and confectionery, among others.

The functional food ingredients market research report is one of a series of new reports that provides functional food ingredients market statistics, including functional food ingredients industry global market size, regional shares, competitors with a functional food ingredients market share, detailed functional food ingredients market segments, market trends and opportunities, and any further data you may need to thrive in the functional food ingredients industry. This functional food ingredients market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The main types of functional food ingredients are probiotics and prebiotics, carotenoids, dietary fibers fatty acids, vitamins, minerals, and others. Carotenoids are fat-soluble pigments found generally in fruits, flowers, plants, algae, and photosynthetic bacteria. They are also found in some non-photosynthetic bacteria, molds, and yeasts. Carotenoids act as a type of antioxidant for humans and are important for human health. It protects the human body against serious disorders such as heart disease, cancer, and degenerative eye disease. The different sources include natural, synthetic and are used in beverages, dairy products, infant food, bakery and confectionery, others.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.