Functional Food Ingredients: Shaping the Future of Food

The global functional food ingredients market size, valued at USD 119.2 billion in 2024, showcases a remarkable growth projection, anticipated to escalate to USD 165.8 billion by 2029, indicating a robust compound annual growth rate (CAGR) of 6.8% during the forecast period. Escalating consumer awareness regarding health and wellness has significantly bolstered the demand for the functional food ingredients market. The prevalence of lifestyle diseases such as obesity, diabetes, and cardiovascular issues has propelled individuals to prioritize healthier dietary choices. As people become increasingly conscious of the link between diet and health outcomes, there is a growing inclination towards functional foods that offer specific health benefits.

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Functional Food Ingredients Market Trends

  • Rising demand for natural and organic ingredients: Consumers are increasingly interested in products made with natural and organic ingredients, which are perceived to be healthier and safer. This trend is expected to continue in the coming years, as consumers become more educated about the benefits of these ingredients.
  • Growing awareness of the health benefits of functional foods: There is a growing body of evidence that functional foods can offer several health benefits, including improved digestion, cognitive function, and immune health. This awareness is driving demand for functional food ingredients, as food manufacturers look to develop new products that meet consumer needs.
  • Increasing consumer interest in preventive healthcare: Consumers are becoming more proactive about their health and are interested in foods that can help them prevent chronic diseases. Functional food ingredients can play a role in preventive healthcare, by providing essential nutrients and supporting overall health.
  • Expansion of the application areas of functional ingredients: Functional ingredients are being used in an ever-wider range of food and beverage products. In addition to traditional applications in yogurt, dairy drinks, and dietary supplements, functional ingredients are now being used in bakery products, snacks, and even pet food.
  • Technological advancements in ingredient processing and delivery: Technological advancements are making it possible to develop new and improved functional ingredients. For example, new methods of encapsulation can protect functional ingredients from degradation and improve their bioavailability.

The emergence of the “beauty from within” trend has significantly fueled the demand for the functional food ingredients market

The paradigm shift towards holistic health practices has driven the consumption of functional foods beyond mere sustenance. Consumers increasingly seek products that offer comprehensive health benefits, extending to both internal well-being and external appearance. According to Kylen Ribeiro, CEO of Lightbody, a US-based nutraceutical company, the market for Nutri-beauty supplements has surged by 57% since 2019, reaching an estimated value of USD 53.4 billion in 2022, as mentioned by an article in Wholefoods Magazine. In particular, the emerging trend of “beauty from within” has catalyzed the growth of the functional food market, with individuals recognizing the intimate connection between diet and physical aesthetics.

Functional food ingredients are rich in bioactive compounds such as protein, vitamins, and omega fatty acids, all of which play pivotal roles in enhancing skin elasticity, radiance, and hair strength. As consumers prioritize preventive healthcare and seek alternatives to traditional beauty regimens, functional foods offer a compelling solution by nourishing the body from within, resulting in sustainable improvements in skin and hair health.

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North America is estimated to dominate the functional food ingredients market during the forecast period

Consumer awareness and adoption of dietary supplements are exceptionally high in the region. For instance, according to the 2023 Council for Responsible Nutrition (CRN) Consumer Survey on Dietary Supplements, 74 percent of US adults regularly consume dietary supplements, reflecting a mainstream acceptance of such products. This widespread usage indicates a significant market demand for functional food ingredients, driving the region’s dominance.

Moreover, North America boasts a robust infrastructure for research and development in the food and beverage industry. This facilitates innovation and the introduction of novel functional ingredients tailored to meet consumer needs and preferences. The region’s strong regulatory framework ensures the safety and efficacy of these products, further bolstering consumer trust and market growth. Additionally, lifestyle trends in North America, such as an increasing focus on health and wellness, drive the demand for functional food ingredients. Consumers are seeking products that offer tangible health benefits beyond basic nutrition, leading to a surge in demand for functional foods and beverages fortified with ingredients such as carotenoids, protein, and amino acids.

Functional Food Ingredients Market Share

The key players in this market include Cargill, Incorporated (US), BASF SE (Germany), ADM (US), International Flavors & Fragrances Inc. (US), Arla Foods amba (Denmark), Kerry Group plc (Ireland), Ajinomoto Co., Inc. (Japan), DSM (Netherlands), Ingredion (US), Tate & Lyle (UK), and TEIJIN LIMITED (Japan).