Functional Food Ingredients Market Size & Growth Analysis to 2030

The global functional food ingredients market is projected to grow at a significant CAGR of around 7% during the forecast period from 2024 to 2030. The increasing consumer awareness about the link between diet and health is driving demand for functional foods enriched with specific health-promoting ingredients. The market benefits from the health and nutritional advantages associated with these ingredients, such as probiotics and omega-3 fatty acids. Ongoing innovations in food technology contribute to the development of novel functional ingredients that not only provide health benefits but also cater to consumer preferences in terms of taste and convenience. The aging global population fuels demand for functional foods addressing age-related health concerns. Regulatory support, coupled with approvals based on scientific research, instills consumer confidence. Urbanization and changing lifestyles lead to a preference for convenient and nutritious functional food options. The rising incidence of chronic diseases emphasizes the preventive role of functional food ingredients. Growing trends in veganism and plant-based diets influence the market, and globalization allows manufacturers to explore new markets.

Market Snapshot:

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Market Drivers:

• Increasing Consumer Awareness: As consumers become more health-conscious, there’s a growing awareness of the direct link between diet and well-being. This heightened awareness drives individuals to seek out functional foods enriched with specific ingredients known to offer health benefits, thereby driving the market’s growth.
• Health and Nutritional Benefits: Functional food ingredients are gaining traction due to their inherent health benefits. Ingredients like probiotics for gut health, omega-3 fatty acids for heart health, and antioxidants for immunity boosting resonate with consumers looking to improve or maintain their health through dietary choices.
• Innovations in Food Technology: The food industry’s continuous evolution and innovation in technology pave the way for the development of novel functional ingredients. These advancements allow for the creation of products that not only provide health benefits but also meet consumer expectations in terms of taste, texture, and convenience.
• Aging Population: The global demographic shift towards an aging population has spurred demand for functional foods that address age-related health concerns. Ingredients targeting bone health, cognitive function, and overall vitality appeal to older consumers looking for dietary solutions to support their health needs.
• Regulatory Support and Approvals: Regulatory bodies’ support and approval of functional food ingredients play a crucial role in market growth. When backed by scientific research and endorsed health claims, these approvals instill consumer confidence and foster trust in functional food products.
• Urbanization and Changing Lifestyles: Rapid urbanization, coupled with changing lifestyles and increased disposable incomes, has reshaped dietary patterns. Consumers, particularly in urban centers, seek convenient, nutritious, and on-the-go functional food options that align with their busy lifestyles and health goals.
• Increased Incidence of Chronic Diseases: The escalating prevalence of chronic diseases like diabetes, obesity, and cardiovascular disorders underscores the importance of preventive healthcare. Functional food ingredients that aid in managing or mitigating these health conditions gain prominence, driving market growth.
• Rising Vegan and Plant-Based Trends: The burgeoning popularity of veganism, plant-based diets, and clean-label products has propelled demand for functional ingredients derived from plant sources. Consumers increasingly prioritize ethically sourced, environmentally sustainable, and plant-based functional food options, influencing market trends and product development.

Market Insights:

The global functional food ingredients market is bifurcated into type, nature, application, and geography. On the basis of application, the market is further segmented into food & beverages, personal care, pharmaceuticals, animal feed, and others. The food and beverage segment dominated the market and expected to hold the largest revenue share over the forecast period 2030. This dominance is underpinned by the substantial consumer demand for healthier and more nutritious food choices. Functional ingredients, renowned for their ability to confer specific health benefits, are widely incorporated into an extensive range of food and beverage products. The sector’s sustained dominance is fueled by ongoing product innovation, with manufacturers integrating functional ingredients not only into traditional health foods but also into mainstream items like snacks, beverages, dairy products, and baked goods. The market’s saturation in this category allows for diverse product offerings, catering to varied dietary preferences and health objectives. Lifestyle trends that prioritize health-conscious choices further amplify the demand for functional foods, solidifying the dominance of this segment. Furthermore, the regulatory support, coupled with the extensive retail presence of functional food and beverage products, further cements the food & beverages category’s position as the driving force behind the market, shaping industry dynamics and meeting the evolving needs of health-conscious consumers.

• Food & Beverages: This segment dominates the market, with functional ingredients incorporated into various food and beverage products to enhance nutritional value, taste, and health benefits. Consumers seek functional foods fortified with ingredients like probiotics, antioxidants, vitamins, and minerals to support specific health goals, such as digestive health, immunity, and overall wellness.
• Personal Care: Functional ingredients play a pivotal role in the personal care industry, where they are utilized in skincare, haircare, and beauty products. Ingredients like antioxidants, vitamins, botanical extracts, and peptides offer skincare benefits such as hydration, anti-aging, UV protection, and skin rejuvenation, driving their incorporation into cosmetic formulations.
• Pharmaceuticals: Functional ingredients find applications in pharmaceuticals, where they are utilized in the development of dietary supplements, nutraceuticals, and medicinal products targeting specific health conditions. Ingredients like herbal extracts, omega-3 fatty acids, and amino acids are incorporated into pharmaceutical formulations to support cardiovascular health, cognitive function, and other therapeutic applications.
• Animal Feed: The animal feed industry utilizes functional ingredients to enhance the nutritional value and performance of livestock, poultry, and aquaculture feed. Ingredients such as prebiotics, probiotics, enzymes, and amino acids improve animal health, digestion, growth, and productivity, contributing to the overall efficiency and sustainability of animal agriculture.
• Others: The ‘Others’ category encompasses diverse applications of functional ingredients, including dietary supplements, infant nutrition, sports nutrition, and specialized medical foods. Functional ingredients like protein isolates, fiber, botanicals, and minerals are utilized across various sectors to address specific nutritional requirements, health concerns, and consumer preferences.

The functional food ingredients market research report presents the analysis of each segment from 2020 to 2030 considering 2022 as the base year for the research. The compounded annual growth rate (CAGR) for each respective segment is calculated for the forecast period from 2023 to 2030.

Historical & Forecast Period

• 2020-21 – Historical Year
• 2022 – Base Year
• 2023-2030 – Forecast Period

Market Segmentation:

By Type:

• Probiotics
• Prebiotics
• Proteins & Amino Acids
• Phytochemicals & Plant Extracts
• Fibers & Specialty Carbohydrates
• Carotenoids
• Vitamins
• Others

By Nature:

• Natural
• Synthetic

By Application:

• Food & Beverages
• Personal Care
• Pharmaceuticals
• Animal Feed
• Others

By Region:

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa

Regional Analysis:

Geographically, North America dominated the global function food ingredients market in the benchmark year and anticipated to hold the largest revenue share of around 1/3 market share by 2030. The dominance is attributed to a combination of factors that collectively contribute to the region’s market leadership. The robust and dynamic food and beverage industry in North America, particularly in the United States, has been quick to embrace and drive innovations in functional food products. The prevalent health and wellness trends among consumers in the region have led to a heightened demand for food and beverages enriched with functional ingredients, reflecting a proactive approach to personal well-being.

Furthermore, the diverse consumer base, with varying dietary preferences and health goals, further fuels the market as manufacturers cater to a wide spectrum of needs. The regulatory environment, notably in the United States, has been supportive of functional ingredients, facilitating their incorporation into food products. Ongoing consumer education initiatives and a high level of nutritional awareness also contribute to the success of functional food ingredients in North America. The region’s commitment to innovation, coupled with a receptive market and favorable regulatory landscape, solidifies North America’s position as a dominant force in the functional food ingredients market.

Competitive Assessment:

Some of the major market players operating in the global functional food ingredients market are Archer Daniels Midland Company (ADM), Cargill, Incorporated, DuPont de Nemours, Inc. (DuPont), Kerry Group, and Ingredion Incorporated. Companies are exploring markets by expansion, new investment, the introduction of new services, and collaboration as their preferred strategies. Players are exploring new geography through expansion and acquisition to gain a competitive advantage through joint synergy.

Recent Developments:

• In 2023, Ingredion launches plant-based protein ingredient, InvigorB100, for muscle health and sports nutrition. This innovative ingredient addresses the growing demand for plant-based alternatives in the protein market.
• In 2023, ADM acquires Bio-Engineered Solutions, expanding its portfolio of prebiotic and probiotic ingredients. This acquisition strengthens ADM’s position in the gut health segment, a key area of growth in functional ingredients.
• In 2023, Nestlé Health Science introduces OptiFibre, a soluble fiber ingredient for digestive health and gut microbiome support. This launch caters to the increasing focus on gut health and its connection to overall well-being.
• In 2022, Danone launches Activia Probiotics+ Immunity, a yogurt with a unique blend of probiotics and vitamins for immune support. This demonstrates the integration of functional ingredients into mainstream food products.
• In 2022, PepsiCo partners with Beyond Meat to develop plant-based protein snacks and beverages. This collaboration highlights the growing trend of partnerships between established food companies and innovative ingredient providers.

Key Companies:

• Archer Daniels Midland Company (ADM)
• Cargill, Incorporated
• DuPont de Nemours, Inc. (DuPont)
• Kerry Group
• Ingredion Incorporated
• Royal DSM N.V.
• BASF SE
• Tate & Lyle PLC
• Ajinomoto Co., Inc.
• Hansen Holding A/S

Key Questions Answered by Functional Food Ingredients Market Report

• Global functional food ingredients market forecasts from 2023-2030
• Regional market forecasts from 2023-2030 covering Asia-Pacific, North America, Europe, Middle East & Africa, and Latin America
• Country-level forecasts from 2023-2030 covering 15 major countries from the regions as mentioned above
• Functional food ingredients submarket forecasts from 2023-2030 covering the market by type, nature, application, and geography
• Various industry models such as SWOT analysis, Value Chain Analysis about the market
• Analysis of the key factors driving and restraining the growth of the global, regional, and country-level functional food ingredients markets from 2023-2030
• Competitive Landscape and market positioning of top 10 players operating in the market