Functional Food Market

Market Overview:

The global functional food market size reached US$ 207.7 Billion in 2022. Looking forward, IMARC Group expects the market to reach US$ 305.6 Billion by 2028, exhibiting a growth rate (CAGR) of 6.5% during 2023-2028. The increasing health awareness, the growing geriatric population, the increasing popularity of customized nutrition food options, various technological advancements in food technology, and supportive government initiatives regarding the adoption of functional food are some of the major factors propelling the market.

Functional food refers to a category of food products that go beyond providing basic nutrition and offer additional health benefits when consumed as part of a regular diet. Some commonly known foods include probiotic-rich yogurt for digestive health, omega-3-fortified eggs for heart health, fortified milk with added vitamin D for bone health, and antioxidant-packed berries for immune support. These foods are formulated with specific bioactive compounds, and natural ingredients, or fortified with vitamins, minerals, or other nutrients known for their positive effects on bodily functions and overall well-being. It promotes optimal health, supports disease prevention, and enhances specific physiological functions. It also addresses various health concerns such as improving digestion, supporting cardiovascular health, improving immunity, and managing weight.

The market is primarily driven by the growing health awareness among consumers about the importance of maintaining a healthy lifestyle and preventing chronic diseases. In addition, the growing geriatric populations, are adopting these foods to address age-related health issues, such as joint health, cognitive function, and heart health, driving the demand for products with specific health-promoting properties. Moreover, several advances in food science and technology and the development of these foods with improved taste, texture, and nutritional profiles, make them more appealing to a broader consumer base, representing another major growth-inducing factor. Besides this, the easy product availability and accessibility in various retail channels, including supermarkets, health food stores, and online platforms, enhance their market penetration accelerating the market growth. Along with this, several governments are implementing supportive policies and regulations, promoting the potential health benefits of these foods which propel the market growth. Furthermore, effective marketing strategies, including social media promotion and celebrity endorsements, are creating awareness and popularizing products among consumers, providing a positive thrust to market growth.

Functional Food Market Trends/Drivers:

The growing popularity of customized nutrition

Customized nutrition, also known as personalized nutrition, is gaining significant popularity due to its ability to tailor dietary choices to individual needs and preferences. In addition, numerous advancements in genetic testing, biomarker analysis, and digital health technologies allow personalized nutrition to be accessible and affordable, influencing market growth. Also, consumers are increasingly seeking solutions that address their unique health goals, genetic predispositions, and lifestyle factors, propelling market growth. Besides this, the rising demand for personalized nutrition to receive personalized diet plans, supplements, and foods designed to optimize their health and well-being, is accelerating the market growth. Furthermore, the growing awareness of the impact of genetics on nutritional requirements, and the desire to proactively manage health concerns such as weight management, gut health, and nutrient deficiencies are propelling the market growth.

Various technological advancements in food technology

In recent years, food technology is witnessing remarkable advancements positively impacting the market. In addition, novel processing techniques, such as microencapsulation, allow to protect and control the release of bioactive compounds in functional foods, ensuring their efficacy and stability. In line with this, nanotechnology enables the delivery of nutrients and functional ingredients at the cellular level, enhancing their absorption and bioavailability, thus augmenting market growth. Moreover, several innovations in plant-based alternatives and cellular agriculture led to the development of these foods with improved sustainability and reduced environmental impact representing another major growth-inducing factor. Besides this, smart packaging technologies, such as time-temperature indicators, help maintain the freshness and quality of products, propelling market growth. These technological breakthroughs improve their taste, texture, and nutritional content, making them more appealing to consumers.

Supportive government policies

Governments are implementing policies to promote the adoption of functional food due to their potential health benefits to prevent diseases which are influencing the market growth. These policies often include streamlined approval processes for health claims on functional food labels, facilitating transparency and communication of product benefits to consumers. Besides this, government-led research initiatives and funding support are encouraging the development of new functional ingredients and food formulations, propelling the market growth. Additionally, tax incentives and subsidies for manufacturers are contributing to lower production costs and promoting market competitiveness, augmenting the market growth. Furthermore, these supportive measures led to extensive investment in the sector, leading to innovation, increased product availability, and heightened consumer confidence in choosing functional foods as part of their daily diet, creating a positive market outlook.

Functional food Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global functional food market report, along with forecasts at the global, regional and country levels from 2023-2028. Our report has categorized the market based on product type, ingredient, distribution channel and application.

Breakup by Product Type:

• Bakery Products
• Breakfast Cereals
• Snack/Functional Bars
• Dairy Products
• Baby Food
• Others
   

Dairy products dominate the market

The report has provided a detailed breakup and analysis of the market based on the product type. This includes bakery products, breakfast cereals, snack/functional bars, dairy products, baby food, and others. According to the report, dairy products represented the largest segment.

Dairy products, such as yogurt, milk, and cheese, hold a significant market share due to their inherent nutritional qualities and the ease of incorporating functional ingredients. In addition, dairy-based foods are rich sources of essential nutrients such as calcium, protein, and vitamins, making them ideal for fortification with additional health-enhancing components, influencing the market growth. Moreover, the widespread adoption of yogurt for its probiotic content is known for promoting gut health and immune function thus representing another major growth-inducing factor. Along with this, the versatility of dairy products allows for the addition of various functional ingredients, such as probiotics, prebiotics, omega-3 fatty acids, and vitamins, catering to diverse consumer health preferences.

Besides this, the widespread adoption of dairy products combined with their reputation as a wholesome and nutritious option is accelerating the market growth. Furthermore, the continuous innovation and diversification of dairy-based functional products are expected to sustain its dominance in the market in the foreseeable future.

Breakup by Ingredient:

• Probiotics
• Minerals
• Proteins and Amino Acids
• Prebiotics and Dietary Fiber
• Vitamins
• Others
   

Vitamins hold the largest share of the market

A detailed breakup and analysis of the market based on the ingredients have also been provided in the report. This includes probiotics, minerals, proteins and amino acids, prebiotics and dietary fiber, vitamins, and others. According to the report, vitamins accounted for the largest market share.

Vitamins are crucial micronutrients essential in various physiological processes, supporting overall health and well-being. In addition, the growing consumer awareness regarding the importance of a balanced diet and the role of vitamins in preventing nutrient deficiencies is influencing the market growth. Moreover, the widespread adoption of vitamins due to their health benefits, such as enhanced immune support, improved bone health, and skin vitality represents another major growth-inducing factor.

Besides this, food manufacturers are incorporating numerous vitamins, including vitamin C, vitamin D, vitamin B complex, and vitamin A, into their offerings, propelling the market growth. Along with this, the rising trend of personalized nutrition is accelerating the product adoption rate. Furthermore, the extensive research and development (R&D) in the field of nutrition and health, prioritize products that proactively support individuals’ overall well-being is creating a positive market outlook.

Breakup by Distribution Channel:

• Supermarkets and Hypermarkets
• Specialist Retailers
• Convenience Stores
• Online Stores
• Others
   

Functional foods are widely distributed through supermarkets and hypermarkets

A detailed breakup and analysis of the market based on the distribution channel have also been provided in the report. This includes supermarkets and hypermarkets, specialist retailers, convenience stores, online stores, and others. According to the report, supermarkets and hypermarkets accounted for the largest market share.

Supermarkets and hypermarkets offer an extensive range of products, including numerous of functional foods, making it convenient for consumers to access these specialized products in one location. In addition, the vast store size and strategic locations of supermarkets and hypermarkets attract a large customer base, allowing manufacturers to reach a broader audience, influencing the market growth.

Moreover, supermarkets and hypermarkets often prioritize health and wellness sections, showcasing foods prominently to capture the growing health-conscious consumer segment. They invest in marketing and promotion activities, creating awareness and driving consumer interest in functional foods. Additionally, these retail channels offer competitive pricing and frequent discounts, making them more affordable and appealing to customers, augmenting the market growth. The ability to compare various brands and products under one roof empowers consumers to make informed choices, further driving the sales.

Breakup by Application:

• Sports Nutrition
• Weight Management
• Clinical Nutrition
• Cardio Health
• Others
   

A detailed breakup and analysis of the market based on the applications has also been provided in the report. This includes sports nutrition, weight management, clinical nutrition, cardio health, and others.

Sports nutrition focuses on providing foods designed to support athletes and fitness enthusiasts in optimizing their physical performance, muscle recovery, and energy levels. In addition, sports nutrition products often contain protein, amino acids, and essential nutrients to help in muscle repair and enhance endurance influencing the market growth. Moreover, the widespread adoption of functional foods for weight management aims to assist individuals in maintaining a healthy weight and managing obesity representing another major growth-inducing factor. These products may include meal replacement shakes, low-calorie snacks, and appetite suppressants that promote satiety and control cravings.

Besides this, clinical nutrition targets individuals with specific health conditions, such as diabetes, gastrointestinal disorders, or malnutrition and addresses nutrient deficiencies, and supports overall health during illness or recovery, accelerating the market growth. Along with this, cardio health focuses on functional foods that promote heart health by reducing cholesterol levels, managing blood pressure, and supporting cardiovascular function which contain heart-healthy ingredients including omega-3 fatty acids and soluble fiber, propelling the market growth.

Breakup by Region:

• North America
  • United States
  • Canada
• Asia-Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

Asia Pacific exhibits a clear dominance in the market

The report has also provided a comprehensive analysis of all the major regional markets, which includes North America (the United States and Canada); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and Others); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and Others); Latin America (Brazil, Mexico, and Others); and the Middle East and Africa. According to the report, Asia Pacific represented the largest market.

Asia Pacific has emerged as a dominant region, exhibiting robust growth and capturing a significant market share. In addition, the increasing health consciousness among consumers, rising disposable incomes, and a growing geriatric population seeking health-enhancing products are propelling market growth. Also, countries such as China, Japan, India, and South Korea are escalating the demand for these foods to manage lifestyle-related health issues, thus augmenting market growth. Along with this, Asia Pacific boasts a rich tradition of using natural ingredients with potential health benefits, making it conducive for the development and consumption of functional foods with traditional herbal and botanical extracts, accelerating market growth.

North America market, particularly the United States, with a well-established functional food industry is driven by a health-conscious population and a strong emphasis on preventive healthcare. Moreover, the Europe market is witnessing steady growth due to the rising awareness of the importance of a balanced diet and the widespread adoption of functional food and dietary supplements for maintaining overall well-being is contributing to the market growth.

Competitive Landscape:

Nowadays, companies in the market are actively engaged in various strategies to meet the growing demand for healthier and personalized food products. They are investing significantly in research and development (R&D) to identify new bioactive ingredients, innovative formulations, and technologies to enhance the health benefits of their products. Moreover, they are focusing on offering personalized nutrition solutions using data-driven approaches, such as genetic testing and individual health profiling to develop customized functional food products customized to consumers' specific health goals and requirements. Furthermore, continuous product innovation and the introduction of new functional food products with unique health claims and targeted benefits, appeal to a broader consumer base. They are collaborating with research institutions, universities, and ingredient suppliers for expertise, access to novel ingredients, and develop evidence-based health claims for their products.

The report has provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:

• Abbott Laboratories
• Amway
• BASF SE
• Cargill Incorporated
• Clif Bar & Company
• Danone S.A.
• General Mills inc.
• Glanbia PLC
• Hearthside Food Solutions LLC
• Kellogg Company
• Kerry Group plc
• Nestlé S.A. and Raisio Oyj

Recent Developments:

• In April 2023, Nestlé announced the launch of its two new vegan chocolate chips, which are claimed to be dairy-free and were launched to meet the demand for plant-based products, under its Toll House brand.
• In March 2022, Clif Bar & Company launched think snack bars, produced with plant-based ingredients to support health and provide snacking options with flavor and real ingredients, such as organic rolled oats, with several products offering chocolate chip, chocolate peanut brownie, and white chocolate macadamia nut, expanding its on-the-go snacking segment for consumers.
• In March 2022, Danone S.A. introduced Activa+, a brand-new yogurt-in-a-drink to support enhanced immunity and health, with Zinc and the vitamins C, D, and E in the yogurt including three flavors of yogurt to choose from such as raspberry, strawberry, and peach.

Functional Food Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the functional food market from 2017-2028.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global functional food market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the functional food industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.