The global functional foods market size was estimated at USD 161.49 billion in 2018. It is anticipated to register a CAGR of 7.9% during the forecast period. Increasing demand for nutritional and fortifying food additives is anticipated to drive the growth. Food and beverage manufacturers are deploying fortification of nutritional additives such as omega-3 fatty acids, fibers, vitamins, minerals, and others in their product offerings. The major motive of incorporating the aforementioned additives in the food and beverage industry is to increase the nutritional content in food items.
Functional ingredients such as omega-3 and probiotics are highly used in fish oils and yogurt to reduce the risk of cardiovascular diseases and to improve the quality of intestinal microflora. Such a trend is expected to fuel the market over the forecast years. Furthermore, The European Commission and the Environmental Protection Agency (EPA) have framed supportive regulations to augment the production as well as consumption of naturally derived ingredients in light of rising concerns toward reducing Greenhouse Gas (GHG) emissions.
Positive outlook on food and beverage industry, particularly in Brazil, Russia, India, China and South Africa (BRICS), is expected to continue driving the market over the forecast period. Growing domestic consumption of food and beverages in light of the expansion of retail network, new product launches, and population growth is expected to promote growth in BRICS. In addition, regulatory support for facilitating Foreign Direct Investments (FDI) at domestic level in BRICS on account of political change, particularly in India and China, aimed at increasing the manufacturing output is expected to amplify growth.
In recent years, there has been a continuous rise in life expectancy and greater attention to quality. Consumers are increasingly becoming more aware of their health and have started paying more attention to their lifestyles and healthy diets, which has surged the demand for functional foods across the globe. The agro-food companies have responded to the new healthy eating trend and have developed a variety of new products with instructions and pictures to meet consumer demand.
Rise and evolution of wellness-focused diets such as keto and paleo are forcing food manufacturers to cater their products in this direction. Digestive wellness is the biggest growth driver owing to the rising demand for low-carbohydrate, high-protein, and paleo diets. For instance, Japanese company Yakult Honsha, launched a probiotic dairy drink in 1955, which were dismissed by several industry experts; however, currently, it’s the world’s largest probiotic dairy brand found in Asia, Europe, and the Americas.
On the basis of ingredients, the market is categorized into carotenoids, dietary fibers, fatty acids, minerals, prebiotics and probiotics, and vitamins, among others. The vitamins segment led the overall market in 2018, in terms of revenue, followed by dietary fibers and minerals.
A large number of benefits are associated with the consumption of fiber including bowel health maintenance, lowering cholesterol levels, and controlling blood sugar levels, among others. These advantages, coupled with the growing functional food industry, are expected to play a key role in the growth of the dietary fiber segment.
Dietary fiber found mainly in fruits, vegetables, whole grains, and legumes is probably best known for its ability to prevent or relieve constipation. Although foods containing fiber can provide other health benefits as well, such as maintenance of healthy weight and lowering the risk of diabetes and heart disease.
The prebiotics and probiotics segment is expected to witness the fastest growth during the forecast period. Prebiotics are short-chain carbohydrates that are non-digestible by digestive enzymes in humans and selectively enhance the activity of some groups of beneficial bacteria. In the intestine, prebiotics are fermented by beneficial bacteria to produce short-chain fatty acids.
Prebiotics also render many other health benefits in the large intestine such as reduce risk of cancer and increased absorption of calcium and magnesium. Prebiotics are found in several vegetables and fruits and are considered functional food components that present significant technological advantages.
The global functional foods market serves various application segments including sports nutrition, weight management, immunity, digestive health, clinical nutrition, and cardio health among others. Cardio health was the dominant segment and accounted for 24.2% of market share in 2018. It is expected to register a CAGR of 8.1% from 2019 to 2025 owing to increasing demand for functional food in cardiovascular diseases, congestive heart failure, hardening of arteries, and congenital heart defects. Digestive health is expected to witness growth owing to strong interest among women throughout their reproductive life and men especially after 40 years of age, to maintain digestive health.
Growing demand for functional foods and beverages owing to a number of health objectives including, improving joint health, weight loss, and bone and muscle strength. These food products can also reduce the risk of cardiovascular diseases and type 2 diabetes by enhancing digestion. They also decrease wrinkles. Functional foods promote optimal health by reducing the risk of non-communicable diseases, boosting metabolism, improving nutrition absorption, aid better digestion, and help lose weight. Consumer preference for reduced sugar intake is expected to positively influence growth.
Dairy products segment led the overall market in terms of revenue in 2018, followed by the bakery and cereals segment. Other major product segments include meat, fish and eggs, soy products, and fats and oils. New developments across the bakery and cereals sector is anticipated to bode well for the market. Rising demand for functional snack and cereal bars such as energy bars, protein bars, and nutrition bars is anticipated to significantly drive growth over the forecast period. Fortified cereals are expected to grow at a brisk pace with companies such as Kellogg launching new product ranges to capture market share.
Dairy products such as yogurts, milk drinks, and spreads are excellent delivery systems for functional food. They are rich in compounds and can also be used as functional food ingredients in food preparation. Dairy products segment held the largest revenue share in 2018, and is expected to expand at a CAGR of nearly 8% during the forecast period.
On the basis of region, the market has been segmented into North America, Europe, Asia Pacific, Central and South America, and Middle East and Africa (MEA). Asia Pacific accounted for over 40% of the overall market share in terms of revenue in 2018. Introduction of e-commerce portals, including Ali-Baba and Made-In-China in Southeast Asia, is expected to have a favorable impact over the regional growth.
Asia Pacific has one of the largest markets for these products owing to the burgeoning population coupled with rising disposable income. Rapidly growing consumption of processed food along with rising awareness regarding health and fitness in developing economies are major driving factors for the regional market. The region is characterized by growing food safety concerns among consumers, influencing consumer behavior, subsequently driving the growth. Food fortification is expected to be the key focus for the government to combat increasing concerns of malnutrition and poverty. This factor, in turn, is expected to contribute significantly to the market growth.
The competitive landscape of the market is characterized by the presence of key companies. The key market players have their distribution channels and manufacturing locations spread across the globe. The presence of dominant players has made it challenging for new entrants to gain a foothold in the market. However, new and prospective players have been investing in R&D activities to withstand the competition prevailing in the industry. Some of the key players include BASF SE; Cargill Inc.; General Mills, Inc.; Coca-Cola Co.; Standard Functional Foods Group, Inc.; and GFR Pharma.
Attribute |
Details |
Base year for estimation |
2018 |
Actual estimates/Historical data |
2014 - 2017 |
Forecast period |
2019 - 2025 |
Market representation |
Revenue in USD Million & CAGR from 2018 to 2025 |
Regional scope |
North America, Europe, Asia Pacific, Central & South America, Middle East & Africa |
Report coverage |
Revenue forecast, company share, competitive landscape, growth factors and trends |
Country Scope |
U.S., Canada, Mexico, EU28, Russia, China, Japan, India, Philippines, Indonesia, Malaysia, Australia, Brazil, South Africa |
15% free customization scope (equivalent to 5 analyst working days) |
If you need specific information, which is not currently within the scope of the report, we will provide it to you as a part of customization |
This report forecasts revenue growth at a global, regional, and country level and provides an analysis of the latest industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global functional foods market report based on ingredient, product, application, and region:
Ingredient Outlook (Revenue, USD Million, 2014 - 2025)
Carotenoids
Dietary Fibers
Fatty Acids
Minerals
Prebiotics & Probiotics
Vitamins
Others
Product Outlook (Revenue, USD Million, 2014 - 2025)
Bakery & Cereals
Dairy Products
Meat, Fish & Eggs
Soy Products
Fats & Oils
Others
Application Outlook (Revenue, USD Million, 2014 - 2025)
Sports Nutrition
Weight Management
Immunity
Digestive Health
Clinical Nutrition
Cardio Health
Others
Regional Outlook (Revenue, USD Million, 2014 - 2025)
North America
The U.S.
Canada
Mexico
Europe
EU28
Russia
Asia Pacific
China
Japan
India
Philippines
Indonesia
Malaysia
Australia
Central & South America
Brazil
Middle East & Africa
South Africa
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The demand for functional foods is increasing owing to their superior nutritional as well as immunity-boosting properties. Furthermore, the consumer mindset to follow a healthy lifestyle particularly in these testing times is further expected to enhance the demand for high nutrition diet during the COVID-19 outbreak. We at GVR are trying to quantify the impact of this pandemic on the functional foods market. Get your copy now to gain deeper insights on the same.