Functional Foods Global Market Report 2024

The functional foods market size has grown rapidly in recent years. It will grow from $251.66 billion in 2023 to $282.11 billion in 2024 at a compound annual growth rate (CAGR) of 12.1%. The growth observed in the historical period can be attributed to various factors, including the rising awareness of health benefits, an aging population, the trend towards preventive healthcare, advancements in scientific research and nutrition, and an increase in lifestyle-related diseases.

The functional foods market size is expected to see rapid growth in the next few years. It will grow to $421.65 billion in 2028 at a compound annual growth rate (CAGR) of 10.6%. Forecasted growth is fueled by changing diets, personalized nutrition, expanding middle-class, focus on gut health, and clean label preferences. Major trends include food tech advancements, heightened health awareness, gut health emphasis, ingredient innovation, and digitalization of personalized diets.

The surge in diseases is redirecting consumers' attention towards adopting healthy eating habits, consequently fueling the demand for functional foods. Functional foods play a crucial role in providing the human body with essential nutrition, vitamins, and minerals, thereby helping reduce the risk of diseases. Heart disease, as reported by the Centers for Disease Control and Prevention, stands as a leading cause of death in the USA, with approximately 647,000 Americans succumbing to heart disease annually, accounting for one in every four deaths. The escalating prevalence of cardiovascular and other diseases globally is expected to drive an increased demand for health-conscious dietary choices. This heightened focus on healthier eating habits is poised to contribute to the growth of the functional food market throughout the forecast period.

The growing appetite for nutrient-rich foods is set to be a key driver for the expansion of the functional foods market. Nutrient-rich foods are characterized by a high concentration of essential nutrients relative to their calorie content. In comparison to nutrient-rich foods, functional foods offer essential nutrients such as vitamins, minerals, healthy fats, and fiber, which are integral for maintaining good health and reducing the risk of chronic diseases. A notable example is the United States Department of Agriculture's revelation in June 2022, stating that spending on domestic food and nutrition assistance programs administered by the USDA reached a record high of $182.5 billion in 2021. This marked a 43% increase over the previous record high, adjusted for inflation, set in 2020 at $127.5 billion. The surging demand for nutrient-rich foods is a key driver propelling the growth of the functional foods market.

The functional food market faces a growth limitation due to the higher prices associated with these products, mainly attributed to the inclusion of healthier or natural ingredients. Functional foods, enriched with beneficial components, are positioned at higher price points compared to conventional foods, with profit margins ranging from 30% to 500% higher. This elevated pricing structure poses a significant challenge, acting as a restraint on the expansion of the functional food market in the upcoming years.

Key players in the functional food market are strategically focusing on new product developments and expanding their operations to cater to the increasing consumer demand. A notable example is Fonterra Co-operative Group Limited, Tillamook County Creamery Association (TCAA), and Three Mile Canyon Farm, jointly introducing Pro-Optima in January 2022. Pro-Optima, an A-grade functional whey protein concentrate, is designed for use in cultured products such as yogurt, offering enhanced textures and delivering multi-functional benefits.

Major companies engaged in the functional foods sector are directing their efforts towards developing innovative products, particularly new plant ingredients. Plant ingredients, derived from plants and utilized across various applications, including food, cosmetics, and pharmaceuticals, are at the forefront of this innovation. In December 2022, Merit Functional Foods, a US-based manufacturer specializing in high-purity proteins, launched the Organic Peazazz C 850. This is the first United States Department of Agriculture (USDA)-certified organic protein component, designed to meet the growing demand for plant-based protein sources. The ingredient, derived from peas, offers a premium alternative to current protein sources, known for its high purity, excellent flavor, and solubility. It finds applications in various products such as beverages, protein bars, and dairy substitutes.

In July 2021, Irish food company Kerry Group acquired Biosearch Life, a biotechnology company based in Spain, for a deal valued at $150 million. This strategic move is part of Kerry Group's initiative to broaden its product portfolio, specifically in the health ingredients sector, including probiotics and omega-3s.

Major companies operating in the functional foods market report are Nestlé Alimentana SA, BASF SE, PepsiCo Inc., Unilever PLC, Abbott Laboratories, The Coca-Cola Company, GlaxoSmithKline Company, Mondelez International Inc., Danone SA, Kraft Foods Inc., General Mills Inc., Royal FrieslandCampina NV, Kellogg Company, Kirin Holdings Company Ltd., Dr PepperSnapple Group Inc., Red Bull GmbH, Ajinomoto Co. Inc., Meiji Holdings Company Ltd., Givaudan SA, Glanbia PLC, Barilla Holding SpA, Arla Foods UK PLC, Ocean Spray Cranberries Inc., Sanitarium Health and Wellbeing Company, Raisio Oyj, Lifeway Foods Inc., GFR Pharma Ltd., BNL Food Group Inc., Suiza Foods Corporation, Murray Goulburn Co-Operative Co. Limited. Asia-Pacific was the largest region in the functional food market in 2023. Western Europe was the second-largest region in the global functional foods market. The regions covered in the functional foods market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

Primary product types include bakery and cereals, dairy products, meat, fish, eggs, soy products, fats and oils, among others. Dairy products encompass various milk-derived foods such as butter, cheese, ice cream, yogurt, and condensed or dried milk. These foods derive their functionality from ingredients such as carotenoids, dietary fibers, fatty acids, minerals, prebiotics, probiotics, vitamins, and other elements. Functional foods find applications in sports nutrition, weight management, immunity boosting, digestive health, clinical nutrition, cardiovascular health, and more.

The functional food research report is one of a series of new reports that provides functional food statistics, including functional food industry global market size, regional shares, competitors with functional food share, detailed functional food segments, market trends and opportunities, and any further data you may need to thrive in the functional food industry. This functional food research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The countries covered in the functional foods market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The functional food market consists of sales of fatty acids, carotenoids, prebiotics & probiotics, vitamins, dietary fibers, minerals, and other functional foods. Values in this market are factory gate values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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