Functional Ingredients Market Report

Functional Ingredients Market Analysis, By Product (Maltodextrin, Probiotics, Polydextrose, Modified starch, Pectin, Omega-3, Omega-6, CLA, Rice protein, Protein hydrolysate), By Application, And Segment Forecasts, 2014 - 2026

Published: September 2017  |  145 Pages  |  Format: PDF  |  Report ID: GVR-1-68038-686-8

Industry Insights

The global functional ingredients market stood at 12,671.7 kilotons in 2016. The increasing health awareness coupled with the rising demand for healthy convenience foods around the world are expected to be the key factors propelling the market over the forecast period.

Functional ingredients refer to those natural ingredients which possess energy boosting, health promoting, and disease preventing properties. Due to the tremendous benefits offered by them, the demand for them in the global food and beverage industry has witnessed an upsurge in the last few years. The rising trend focusing on the reinforcement of foods with vitamins, minerals, and herbal extracts supports the market for functional ingredients and the resulting efforts to create a more conductive environment for their incorporation in foods and beverages.

U.S. functional ingredients market volume by product, 2014 - 2026 (Kilo Tons)

U.S. functional ingredients market

The health awareness among consumers across numerous geographies is growing gradually, thereby supplementing the demand for nutrient-rich foods and beverages. Consumers are switching toward fortified convenience wholesome foods which are high in nutritional content. Rising income levels along with the growing number of urban residents are further propelling the demand. The younger population is gaining considerable awareness regarding the adoption of healthy food items in their dietary regimes. Consumers around the world are utilizing the benefits of functional ingredients in obesity management.

They are extensively used in the pharmaceutical industry as a coating material because they exhibit low viscosity, high solid content, and decent water solubility. In addition, maltodextrin is non-toxic & safe and imparts tensile strength to the tablets. The high consumption of starch as an excipient in oral solid dosage forms such as tablets, capsules, or sachets is likely to increase the demand for it in the near future. Asia’s pharmaceutical sector has been expanding rapidly, in line with the region’s strong economic growth and demographic changes 

Product Insights 

Probiotics have emerged as the leading product category and accounted for over 52.7% of the total revenue in 2016. Increased consumption of probiotics is likely to be the result of these products being available in the form of food such as dairy & baked products and dietary supplements.

The tendency to consume nutritional supplements and dairy products mostly across the Western countries plays a significant role in the growing demand for probiotics. The increasing awareness about the link between the intestinal health and diet & nutrition is projected to create ample opportunities for new players to enter the market. The prices of probiotics depend entirely on the basic raw material prices. Fluctuations in these prices may affect the market directly.

Rice protein is anticipated to witness the fastest CAGR of 8.4% over the forecast period from 2016 to 2026. It is one of the most important types of plant protein, which is derived from both, brown as well as white, rice. It can also be used as an alternative to soy and whey protein. White rice comprises around 90% carbohydrates, 2% fat, and 8% protein.

Rice protein concentrates are being increasingly utilized in nutritional beverages, bars, baked food products, confectioneries, and desserts which is likely to have a positive impact on their growth over the forecast period. Companies including Prinova utilize rice protein concentrates in their products which are anticipated to increase consumer awareness, thereby fueling the demand for the product over the forecast period.

Application Insights

The global demand for functional ingredients has witnessed a paradigm shift due to the rising health awareness among consumers. Food & beverages emerged as the largest segment of the market by application and accounted for over 43.7% of the total revenue in 2016. 

Global functional ingredients market volume by application, 2016 (%)

Global functional ingredients market

Functional ingredients are attaining extensive popularity in functional foods and beverages owing to their numerous health benefits. Sports drinks, dairy alternatives, and dietary supplements are among the major foods comprising these ingredients. They are also generating a huge demand for plant-based proteins. They find extensive application across bakeries & confectionaries and meat analogs & extenders.

Asia Pacific is predicted to witness the fastest growth from 2017 to 2026 in food & beverages on account of the rising demand for the product from food and beverage industry of China and India. Increasing health concerns are expected to play a major role in boosting the demand for functional ingredients over the forecast period. Rising disposable incomes and increasing standards of living, particularly in developing regions, are presumed to be critical factors aiding the overall growth of the market over the next few years.

Regional Insights

North America was the leading market and accounted for around 33.8% of the total revenue in 2016. The U.S. dominated North America in 2016, followed by Mexico and Canada. Growing health concerns and increasing health issues such as diabetes, obesity, and digestive disorders are major factors that are likely to boost the demand for the product over the forecast period. Moreover, technological advancements coupled with the high adoption rate of new products in the country are estimated to play a vital role in increasing the demand for functional ingredients over the forecast period.

Asia Pacific is anticipated to witness the fastest growth over the forecast period. Favorable government policies in the agricultural trade to promote functional foods and attract investments in the industry have created a broad scope for growth in Asia Pacific. Countries such as India, China, Japan, South Korea, and Taiwan depend on agriculture to some extent for economic growth due to the sector being a major contributor to their GDPs. Asia Pacific has accounted for a significant chunk of the global production in the last few years, with the emerging economies in this region observing high levels of development. 

Competitive Insights

Key players include Archer Daniels Midland Company, Ingredion Incorporated, Golden Grain Group Limited, FMC Corporation, Omega Protein Corporation, NutriBiotic, Cargill Incorporated, Tate & Lyle plc, Roquette Frères. Application development and product innovation are likely to be the key parameters for being competitive in this market, with frequent mergers and acquisitions being undertaken by companies in an attempt to diversify their product portfolios and gain considerable revenue shares.

Report Scope 

Attribute

Details

Base year for estimation

2016

Actual estimates/Historical data

2014 - 2016

Forecast period

2017 - 2026

Market representation                                         

Volume in kilotons, revenue in USD Million, and CAGR from 2017 to 2026

Regional scope

North America, Europe, Asia Pacific, Central & South America, Middle East & Africa

Country scope

U.S., Germany, UK, China, India, Thailand, Brazil

Report coverage             

Volume & revenue forecast, company share, competitive landscape, growth factors, and trends

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Segments covered in the report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis on the industry trends in each of the sub-segments from 2014 to 2026. For the purpose of this study, Grand View Research has segmented the global functional ingredients market on the basis of product, application, and region: 

  • Product Outlook (Volume, Kilotons; Revenue, USD Million; 2014 - 2026)

    • Maltodextrin

    • Probiotics

    • Polydextrose

    • Modified starch

    • Pectin

    • Omega-3 (EPA, DHA, ALA)

    • Omega-6

    • Conjugated linoleic acid

    • Rice protein

    • Protein hydrolysate

    • Mung bean protein

  • Application Outlook (Volume, Kilotons; Revenue, USD Million; 2014 - 2026)

    • Food & beverages

    • Personal care

    • Pharmaceuticals

    • Animal feed

    • Others

  • Regional Outlook (Volume, Kilotons; Revenue, USD Million; 2014 - 2026)

    • North America

      • U.S.

    • Europe

      • Germany

      • UK

    • Asia Pacific

      • China

      • India

      • Thailand

    • Central & South America

      • Brazil

    • Middle East & Africa

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