Functional Food Ingredients Market Report 2025

The functional food ingredients market size has grown strongly in recent years. It will grow from $120.27 billion in 2024 to $130.79 billion in 2025 at a compound annual growth rate (CAGR) of 8.7%. The growth in the historic period can be attributed to increasing health consciousness, rising incidence of lifestyle-related diseases, consumer demand for natural and clean label products, research and development in nutraceuticals, collaboration between food and pharmaceutical industries.

The functional food ingredients market size is expected to see rapid growth in the next few years. It will grow to $194.54 billion in 2029 at a compound annual growth rate (CAGR) of 10.4%. The growth in the forecast period can be attributed to personalized nutrition and customization, integration of functional ingredients in conventional foods, focus on mental and cognitive health, expansion of the senior population, e-commerce and direct-to-consumer trends. Major trends in the forecast period include advancements in food biotechnology, advancements in food science and technology, rising demand for plant-based ingredients, focus on gut health ingredients, emergence of adaptogens.

The functional food ingredients market is anticipated to grow owing to the rising demand for fortified food and beverage products. Fortified foods, which lack natural nutrients, have additional nutrients incorporated to enhance nutrition and provide health benefits. The consumption of fortified food and beverage products is on the rise due to increasing health consciousness, a surge in disease occurrences, and growing disposable income. A report by Common Thread Collective indicates significant global sales growth in the food and beverage sector, reaching $506 billion in 2022 and expected to reach $857 billion by 2025. The increased demand for fortified food and beverage products is a key driver for the growth of the functional food ingredients market.

The rising demand for dairy products is anticipated to drive the growth of the functional food ingredients market in the future. Dairy products are food items made from the milk of mammals, primarily cows, but also including goats, sheep, and other mammals. Functional food ingredients in dairy products provide benefits such as nutritional enhancement, digestive health, bone health, weight management, blood sugar regulation, flavor enhancement, and lactose-free alternatives. For example, in February 2023, the International Dairy Foods Association, a U.S.-based trade organization representing the dairy sector, reported that U.S. dairy exports reached a record high of $9.51 billion in 2022, exceeding the previous record of $7.61 billion set in 2021. Consequently, the increasing demand for dairy products is fueling the growth of the functional food ingredients market.

Leading companies in the functional food ingredients market are concentrating on creating clean label functional food ingredients. Clean label functional food ingredients are naturally sourced components that offer health benefits while being minimally processed and made from recognizable, straightforward ingredients that consumers can easily comprehend. For example, in February 2024, Ingredion Incorporated, a U.S.-based ingredient solutions provider specializing in a range of sweeteners, starches, and nutritional ingredients, launched NOVATION® Indulge 2940, the first functional native corn starch that delivers unique gelling and film-forming properties while meeting clean label standards. This innovative starch is particularly well-suited for dairy products and alternative cheese applications, enhancing texture and mouthfeel without compromising the consumer preference for familiar ingredients. This development addresses the challenges of creating clean label products and supports sustainability initiatives by improving functionality in applications like vegan pizza cheese and coated fried foods. Ultimately, it allows brands to provide both quality and alignment with health-conscious trends.

Major companies are focusing on innovative products such as probiotic starter cultures to drive revenues. Probiotic starter cultures typically contain various yeast strains and lactic acid bacteria (LAB) that aid in fermentation and produce metabolites enhancing the end product's quality attributes. For example, in September 2023, Royal DSM N.V., a Netherlands-based science-based company, launched delvo fresh pioneer. These cultures exhibit remarkably stable pH for up to 60 days in cold storage, making them suitable for high-value recipes such as mild, reduced-sugar yogurts and smooth, creamy yogurts.

In September 2023, Barentz, a food company based in the Netherlands, acquired Unijaya for an undisclosed amount. This acquisition is intended to bolster Barentz's presence in the Asian market by improving its product portfolio and distribution capabilities, especially in the functional food ingredients sector. Unijaya, based in Indonesia, specializes in the distribution of active pharmaceutical ingredients and functional food ingredients.

Major companies operating in the functional food ingredients market include Cargill Incorporated, Nestle, Archer Daniels Midland Company, BASF SE, Arla Foods amba, Koninklijke DSM NV, Ajinomoto, Kerry Group, Ingredion Incorporated, Glanbia plc, DuPont Nutrition & Biosciences, FMC Corporation, Roquette Frères, Royal Cosun, Ashland, Tate & Lyle PLC, Corbion N.V., Brevel, Chr. Hansen Holding A/S, Kemin Industries Inc., Naturex, Beneo, The Every Company, Nuritas, Foodchem International Corporation, Global Specialty Ingredients (GSI), A&B Ingredients, Shiru Inc., Sophie's Bionutrients Pte. Ltd., Clean Food Group, Paragon Pure, Canomiks.

North America was the largest region in the functional food ingredients market in 2024. Europe was the second-largest market in the functional food ingredients market. The regions covered in the functional food ingredients market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the functional food ingredients market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Functional food ingredients are bioactive compounds or substances employed in the production of functional food products, offering health benefits. Some of these ingredients may include supplements or other additives.

The primary types of functional food ingredients encompass probiotics and prebiotics, carotenoids, dietary fibers, fatty acids, vitamins, minerals, and others. Carotenoids, fat-soluble pigments found in fruits, flowers, plants, algae, and bacteria, serve as antioxidants for human health, guarding against disorders such as heart disease, cancer, and degenerative eye diseases. These ingredients, available from natural or synthetic sources, are utilized in various products such as beverages, dairy items, infant food, bakery and confectionery, among others.

The functional food ingredients market research report is one of a series of new reports that provides functional food ingredients market statistics, including functional food ingredients industry global market size, regional shares, competitors with a functional food ingredients market share, detailed functional food ingredients market segments, market trends and opportunities, and any further data you may need to thrive in the functional food ingredients industry. This functional food ingredients market 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 main types of functional food ingredients are probiotics and prebiotics, carotenoids, dietary fibers fatty acids, vitamins, minerals, and others. Carotenoids are fat-soluble pigments found generally in fruits, flowers, plants, algae, and photosynthetic bacteria. They are also found in some non-photosynthetic bacteria, molds, and yeasts. Carotenoids act as a type of antioxidant for humans and are important for human health. It protects the human body against serious disorders such as heart disease, cancer, and degenerative eye disease. The different sources include natural, synthetic and are used in beverages, dairy products, infant food, bakery and confectionery, others.

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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