Functional Food Market

Market Overview

The global functional food market size was valued at USD 297,879 million in 2022. It is projected to reach USD 525,996 million by 2031, growing at a CAGR of 6.5% during the forecast period (2023–2031).

Foods that provide health benefits beyond their nutritional profile are considered functional foods. They are beneficial in achieving and maintaining good health and in lowering disease risk. The wellness community as a whole has been adopting it at a rapid rate. The expansion of the worldwide functional food market is anticipated to be driven by rising disposable income and subsequent increases in spending on health and health-related food products. In addition, the rise of cardiovascular disease, obesity, and disorders related to obesity are anticipated to propel the functional food market during the forecast period. Soy products are becoming increasingly popular for sports nutrition and weight control, which is expected to boost the functional food market throughout the forecast period.

Market Dynamics

What are the Primary Factors driving the Market for Functional Food?

Rising Interest in Nutritional Supplements among Consumers in Emerging Markets

Developed countries, including the United States, Germany, France, Spain, Italy, and Japan, all claimed that modern customers are looking for individualized nutrition and diet solutions to assist them in achieving their health and wellness objectives. Products and services designed to improve health and wellness no longer apply universally. It's not just the people of the United States who have discovered the health benefits of functional food; consumers in China, South Korea, and the United Arab Emirates are doing the same for meat, fish, eggs, bread, and cereal. Consumers in the Asia-Pacific region have a rising per capita consumption of almonds. Therefore emerging economies are likely to drive the market. These trends point to a rise in demand for functional foods in emerging countries during the analysis period, which bodes well for the market's potential to expand.

Increase in purchasing power

Functional food is becoming increasingly popular in emerging markets due to several causes, including consumer preferences and behavior shifts. People's eating habits have shifted in Asia and the Pacific as disposable incomes have increased. In addition, in the Middle East and Latin America, per capita income has risen significantly over the past decade, which bodes well for the future demand for high-end dining. The growing desire for and interest in opulent lifestyles has exploded the market.

What are the Main Factors that will slow down the Market for Functional Food?

Availability of Healthier Substitutes

Consumers are shifting their focus away from functional food, a novel concept for addressing nutritional gaps in the human diet, and toward cereals like wheat flour, oat flour, rice flour, and others. Cereal grains are the ideal energy source and aid in fighting a wide range of disorders, including cancer, diabetes, and constipation, despite the availability of a wide range of nutritious bakery products on the market. The availability of healthier alternatives thus hampers market expansion.

What are the Future Opportunities for Functional Food?

Increased Spending By Medium- And Small-Sized Food Producers

Small and medium-sized businesses can find profitable niches in the growing functional food industry. Stakeholders plan to develop and grow their businesses through product innovation because the diversified companies that dominate the food market have a small footprint. Thus, small and medium companies (SMEs) might take advantage of premium-priced nutraceuticals and other food supplements. As a bonus, there are several businesses whose exclusive focus is developing and marketing functional food items. Small and medium-sized food manufacturing facilities have been expanding in emerging nations like India and China due to an emphasis on "made in country" initiatives. Because of this, the market for functional foods expands.

Regional Analysis

The global market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant shareholder in the global market. Many Asian countries rely on weight management, clinical nutrition, and cardiovascular health products marketed as "functional food." Several small and medium-sized food manufacturing enterprises are increasing their investments in developing countries, contributing to the sector's expansion. Changing customer tastes and preferences and shifting lifestyles are propelling forces in the regional market. The market is expected to expand due to rising disposable income and the spread of western lifestyles. Rapid urbanization, rising incomes, a large consumer base, and a penchant for high-priced, vitamin-based products are all factors helping the Asia-Pacific market expand.

North America is expected to grow during the forecast period. The popularity and continued development of health-oriented diets like the ketogenic and paleo diets have compelled food producers to modify their offerings to suit these dietary preferences. With more and more people opting for low-carb, high-protein, and paleo diets, digestive health has emerged as a critical growth area. Due to increased health and fitness consciousness, low-cholesterol, high-fiber confections and bakery items have grown in popularity. Food products high in protein and low in carbohydrates are in great demand as more and more consumers choose a high-protein diet. Food producers recognize this growing demand for protein and are responding by introducing nutrient- and protein-dense items like pasta, bakery goods, and others. The commercial food consumption rate is increasing, which is good news for the functional food industry in the region.

Growing consumer knowledge about the positive effects of functional foods on health has led to a significant increase in consumption across Europe. As consumers in the region have more discretionary income, they are more able to spend it on functional food products, which are helping to drive the expansion of the functional food industry. There has been an increase in the availability of functional foods in Europe due to better distribution networks. As the European population becomes more educated about the value of functional food products, their prices drop, and their range of possible uses expands, the market is expected to continue expanding.

Segmental Analysis

The global functional food market is segmented by ingredient, product, and application.

Based on ingredients, the global functional food market is bifurcated into Carotenoids, Dietary Fibers, Fatty Acids, Minerals, Prebiotics & Probiotics, Vitamins, and Others.

The probiotics segment is the highest contributor to the market. Probiotics are non-digestible by human digestive enzymes and increase the activity of some helpful bacteria; they are live microorganisms taken through fermented food or supplements. Benefits from taking probiotics are realized in the large intestine; where they do things like lessen the likelihood of developing cancer and boost calcium and magnesium absorption. The majority of probiotics come from fermented foods or dietary supplements. Various benefits, including aid in preventing and treating diarrhea or lessening its intensity, and supplements that assist some mental health disorders, point to a bright future for probiotics in the functional food sector.

Based on product, the global market is bifurcated into Bakery and cereals, Dairy Products, Meat, Fish and eggs, Soy Products, Fats and oils, and Others.

The bakery & cereals segment is the highest contributor to the market. Foods from the bakery and cereal business, like bread, cereal, cakes, biscuits, pastries, and scones, are among the most widely consumed baked goods. Growth is expected to be propelled by the increasing demand for cereal and snack bars that serve a specific purpose, such as energy bars, protein bars, and nutrition bars. Companies like Kellogg's are expanding their offerings of fortified cereals to increase their market share. Given the increasing prevalence of cereal-based products marketed as an immunity-buster, the bread and cereals sector is expected to rise. As people's discretionary incomes rise, so does the demand for sweets.

Based on application, the global market is bifurcated into Sports Nutrition, Weight Management, Immunity, Digestive Health, Clinical Nutrition, Cardio Health, and Others.

The cardio health segment is the highest contributor to the market. Cardiovascular health refers to the condition of the heart and blood arteries. Heart illness, heart arrhythmias, stroke, heart failure, and issues with heart valves are all examples of cardiovascular disease. High blood pressure, high cholesterol levels, smoking, and diabetes are all significant contributors to the onset of cardiovascular disease. There is promising evidence that several functional foods can help prevent and manage cardiovascular disease. This meal includes soybeans, oats, salmon, almonds, psyllium, and sterol ester-enriched margarine. Thus, the increase in cardiovascular diseases is anticipated to be a significant factor driving the expansion of the market throughout the forecast period.

Recent Developments

• May 2022- The Sanitarium Health Food Company has joined forces with Life Education and its beloved mascot Healthy Harold the Giraffe, to ensure that all Australian children grow up healthy and strong.
• November 2022- Meiji Seika Pharma, a Japan-based pharmaceutical company, has announced the transfer of manufacturing and marketing approval for the anti-malignant tumor agent Hiyasta® Tablets 10mg.