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The functional food ingredients market size is estimated to grow at a CAGR of 7.38% between 2023 and 2028. The market size is forecast to increase by USD 53.14 billion. The growth of the market depends on several factors, including the increased demand for functional food ingredients from probiotics segment, the rising health awareness, and the rise in demand for new varieties of functional foods.
The report offers extensive research analysis on the Functional Food Ingredients Market, with a categorization based on Product, including the probiotics and prebiotics, proteins and amino acid, dietary fibers, vitamins and minerals, and others. It further segments the market by Application, encompassing food and beverages, pharmaceuticals, and others. Additionally, the report provides Geographical segmentation, covering APAC, Europe, North America, the Middle East and Africa, and South America. Market size, historical data (2018-2022), and future projections are presented in terms of value (in USD billion) for all the mentioned segments.
The global functional food ingredients market refers to the industry that deals with the production, distribution, and marketing of ingredients that are used in functional food products. Functional foods are defined as those that provide additional health benefits beyond basic nutrition, such as improving heart health, enhancing digestion, boosting immunity, and managing weight. Functional food ingredients can include a wide range of substances, such as vitamins, minerals, probiotics, prebiotics, omega-3 fatty acids, antioxidants, fibers, proteins, and plant-based extracts. These ingredients are added to various food and beverage products to enhance their nutritional value and health-promoting properties.
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One of the key factors driving the functional food ingredients market growth is the increased demand for functional food ingredients from the probiotics segment. There is growing traction for the probiotics segment of the global functional food ingredients market as consumers prefer a more balanced diet that can not only take care of their appetite but also offer nutritional benefits. In addition, probiotics are microorganisms that provide immunity, nutritional benefits, and vitamin K, which is an essential nutrient for blood clotting.
Moreover, yogurt, kefir, sauerkraut, tempeh, kimchi, a few varieties of cheese, buttermilk, and fermented soybeans are among the probiotic products in high demand. Furthermore, Lactobacillus, Bifidobacterium, and Enterococcus are mainly used in food products such as dairy products, dietary supplements, drugs, medical foods, and feed additives. Therefore, the increased demand for probiotic products will significantly drive the growth of the global functional food ingredients market during the forecast period.
A key factor shaping the functional food ingredients market growth is the increased use of natural ingredients and botanicals in functional beverages. There is an increase in the launch of functional drinks containing natural ingredients in the global functional food ingredients market. In addition, several players in the market are experimenting with unique ingredients and are introducing numerous assortments of natural functional drinks.
For instance, Scheckter's Organic Energy is a 100% organic energy drink. In addition, it contains organic Brazilian guarana, organic raw Brazilian coffee seed, ginkgo Biloba, organic pomegranate juice, organic ginseng, organic elderberry, organic lemon juice, organic raw fair trade sugar, and natural spring water. Hence, such product launches are positively impacting the market which in turn drives the market growth during the forecast period.
The high cost of functional foods is one of the key challenges hindering the functional food ingredients market growth. The high cost of functional foods will negatively impact the growth of the global functional food ingredients market. Even though the sales of functional food products are anticipated to grow at a brisk rate, economic factors have severely impacted the growth of the functional foods market.
Moreover, the high prices of nutraceuticals and medical foods will limit the adoption of functional foods globally. In addition, functional foods are expensive owing to their distribution cost, storage cost, and transportation parameters. Furthermore, the complex extraction process adds to the cost. Hence, such factors are hindering the market growth during the forecast period.
The probiotics and prebiotics segment is estimated to witness significant growth during the forecast period. The probiotics segment comprises live microorganisms, such as Lactobacillus, Bifidobacterium, and Enterococcus, which are found extensively in yogurt, buttermilk, Greek yogurt, and other fermented dairy products. However, prebiotics are non-digestible fibers that provide nourishment for probiotic bacteria in the body and promote their growth.
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The probiotics and prebiotics segment was the largest segment and was valued at USD 30.63 billion in 2018. Moreover, the increased demand for probiotics owing to their health benefits is expected to propel the growth of the probiotics and prebiotics segment in the global functional food ingredients market. In addition, increased innovation in functional foods, dietary supplements, and beverages segments is propelled by the growth in consumer awareness about the role of microorganisms in promoting health. For instance, Pineapple Paradise is the new flavor that Wildwonder, the first sparkling prebiotic + probiotic beverage for gut health, launched in June 2023. Hence, such factors are fuelling the growth of this segment which in turn will drive the market growth during the forecast period.
Based on the application, the segment is classified into food and beverage, pharmaceuticals, and others. The food and beverage segment is the largest segment of the global functional food ingredients. Factors such as the rising health consciousness among people have increased the demand for nutrient-rich food items, therefore leading to an increase in demand for products with high nutrition. In addition, sportspersons and athletes prefer protein-rich diets to improve muscle movements and enhance their performance. Moreover, food supplements are concentrated sources of nutrients. Furthermore, the main purpose of food supplements is to complement the normal diet. Hence, such factors are fuelling the growth of this segment which in turn will drive the market growth during the forecast period.
APAC is estimated to contribute 37% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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Some of the main factors that are contributing to the growth of the functional food ingredients market in APAC include the presence of many functional food ingredients and food additives manufacturers in this region. In addition, China, Japan, India, and South Korea are the key revenue-generating countries in APAC. Moreover, changing lifestyle and growing disposable income has increased the demand for a healthy diet, and the increasing preference for packaged food products will propel the demand for functional food ingredients. In addition, rising health awareness, growing demand for probiotics, and the increasing use of nutritious food supplements containing vitamins and minerals will augment market growth. Hence, such factors are driving the market growth in APAC during the forecast period.
Companies are implementing various strategies by analyzing factors such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product or service launches, to enhance their presence in the market.
Ajinomoto Co. Inc: The company offers functional food ingredients applications such as Soups, Beverages, Bakery, Dairy, and others.
The report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
Functional Food Ingredients Market Scope |
|
Report Coverage |
Details |
Page number |
187 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 7.38% |
Market Growth 2024-2028 |
USD 53.14 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
6.94 |
Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
Performing market contribution |
APAC at 37% |
Key countries |
US, China, India, Germany, and the UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Ajinomoto Co. Inc., AMCO Proteins, Archer Daniels Midland Co., Arla Foods amba, Associated British Foods Plc, BASF SE, Bio Botanica Inc., Cargill Inc., Chr Hansen Holding AS, Cooperatie Koninklijke Cosun UA, Givaudan SA, Ingredion Inc., International Flavors and Fragrances Inc., Kemin Industries Inc., Kerry Group Plc, Koninklijke DSM NV, Omega Protein Corp., Sudzucker AG, Symrise AG, and Tate and Lyle PLC |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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