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Pages: 380 |
Aug 2023 |
Functional Ingredients Overview
Functional ingredients are components or substances added to food & beverages and other consumer products that offer specific health benefits or enhance their nutritional value. These ingredients go beyond essential nutrition and are intended to provide additional physiological advantages or improve overall well-being. These are natural substances or chemically formulated compounds, often vitamins, minerals, cancer preventives, probiotics, prebiotics, fiber, omega-3 fatty acids, or compounds with beneficial health effects. Fortified with other bioactive compounds known to exist. Functional ingredients are incorporated into various products such as functional foods, dietary supplements, nutraceuticals, and functional beverages. In addition to essential nutrition, they positively affect the functioning of the body. Promotes gut health, reduces oxidative stress, supports cardiovascular health, or improves digestion. Functional ingredients play a significant role in developing products that provide consumers with added health benefits beyond essential nutrition.
Global Functional Ingredients Market Analysis
The global functional ingredients market size was $73.27 billion in 2022 and is predicted to grow with a CAGR of 8.6%, by generating a revenue of $158.90 billion by 2032.
COVID-19 Impact on Global Functional Ingredients Market
The COVID-19 pandemic had a significant impact on the functional ingredients market. There was a recognizable increment in the demand for functional ingredients known for their immune-boosting properties. Customers became more conscious of the importance of maintaining a robust immune system. They looked for fixings like vitamins, minerals, cancer prevention agents, and probiotics. However, there were challenges caused by disturbances in the supply chains. Restrictions on international trade, transportation limitations, and labor shortages impacted the sourcing and delivery of raw materials, resulting in increased prices and limited availability of some functional ingredients. The closure of food service establishments during lockdowns also affected the demand for ingredients used in that sector.
Increasing Health & Wellness Trends to Drive the Market Growth
One of the major growth drivers is the increasing mindfulness and health concerns of shoppers, which has a significant impact on the demand for functional ingredients. Consumers are increasingly seeking products that offer health benefits such as improved digestion, weight management, enhanced immunity, and overall wellness. In addition, aging population plays an important role in increasing demand for functional ingredients. Increasing disposable income is also contributing to the market growth as consumers willingly spend on quality products with health benefits. In addition, through continuous product innovation and development, manufacturers are introducing new functional ingredients to address different health needs and preferences. The functional food & beverage industry is also growing strongly and is closely linked to the functional ingredients market. Increased use of digital platforms and social media has increased consumer awareness and understanding of functional ingredients, leading to increased demand. Consumer preferences are shifting to natural, clean labels and organic products, increasing demand for natural active ingredients.
High R&D Costs to Restrain the Market Growth
Developing and testing functional ingredients can involve extensive R&D efforts, which can be expensive. High costs may limit the number of companies able to invest in innovation and product development, affecting market growth. Stringent regulations and compliance requirements, including safety standards and health claims regulations, can pose challenges for manufacturers in terms of meeting regulatory guidelines. In addition, limited consumer awareness and understanding of the benefits of functional ingredients is expected to hinder market growth. The higher price of functional ingredients compared to conventional ingredients can make consumers price-sensitive and reluctant to pay a premium for these products. Distribution challenges, such as specialized storage and handling requirements, can pose logistical difficulties, particularly for small-scale manufacturers or those operating in remote areas. Moreover, if the scientific evidence supporting the effectiveness and health benefits of functional ingredients is limited or conflicting, it can create uncertainty among consumers and regulatory bodies. Competition from conventional products that offer similar functionalities or claims, as well as sensory considerations such as taste and texture, can further impact consumer acceptance and adoption of functional ingredient-based products.
Aging Population and Preventive Healthcare to Drive Excellent Opportunities
Changing consumer preferences and market trends are expected to create several growth opportunities for key players operating in the market. The global aging population is increasing, driving the demand for active ingredients that address age-related health concerns. Ingredients with benefits such as joint health, cognitive support, and cardiovascular wellness are particularly sought. Developing functional components and products that cater to the needs of an aging population can be a profitable opportunity. Increased customer awareness of health & wellness has boosted the demand for functional food & beverages. Consumers seek products with specific health benefits, such as probiotics, omega-3 greasy acids, and cancer prevention agents. The fitness and sports nutrition market are overgrowing, creating a need for functional ingredients like protein and energy-boosting ingredients. Clean-label and natural ingredients are in high demand, and companies can capitalize on this trend by offering clean-label functional ingredients. Personalized nutrition is gaining traction, and functional ingredients can be crucial in developing customized products.
Global Functional Ingredients Market Share, by Product, 2022
The probiotics sub-segment accounted for the highest market share in 2022. Consumer awareness of the importance of gut health and its impact on overall health has increased significantly. This has created a demand for products that support digestive health with probiotics being recognized as natural solutions. Scientific research also plays an imperative part, with numerous studies demonstrating the health benefits of probiotics, including maintaining a healthy intestine microbiome, improving digestion, and strengthening the immune system. The availability of scientific evidence has made probiotics even more popular. Moreover, the flexibility of probiotics in products such as yogurts, aged nourishments, dietary supplements, and functional beverages has made probiotics available to a wide extend of buyers. With the rising demand for natural and functional foods, probiotics fit this trend perfectly and offer additional health benefits beyond essential nutrition. Effective marketing and product promotion strategies emphasizing health benefits and scientific evidence contribute to probiotics' dominance in the functional ingredients market.
Global Functional Ingredients Market Share, by Application, 2022
The food & beverages sub-segment accounted for the highest market share in 2022. The demand for functional foods & beverages is driven by rising health consciousness among consumers. Functional ingredients like probiotics, omega-3 fatty acids, and antioxidants offer specific health benefits that consumers seek, such as improved digestion and enhanced immune function. Food & beverages provide a convenient and familiar platform for incorporating functional ingredients into daily diets. The food & beverage industry's focus on innovation and product development has resulted in a wide range of functional options for different tastes and preferences. Moreover, favorable regulations and guidelines have provided manufacturers with clarity and confidence when using functional ingredients. Food and beverage companies' marketing efforts and consumer education campaigns have raised awareness about the benefits of functional ingredients, further driving their dominance in the market.
Global Functional Ingredients Market by Region, 2022
The North America functional ingredients market generated the highest revenue in 2022. North America is known for its highly advanced technology and infrastructure. The region's advanced R&D infrastructure has enabled significant technological advancements in functional ingredient production. North America is at the forefront of innovation as it is home to renowned universities, research institutes, and multinational corporations. The industry has quickly incorporated functional ingredients into a wide range of products, driving market growth. North American consumers' growing focus on health & wellness has boosted the demand for functional ingredients. Increasing awareness of the link between diet and well-being has led to a preference for products that offer additional health benefits. The region's favorable regulatory environment ensures safety, quality, and labeling standards for functional ingredients, inspiring consumer confidence and encouraging innovation.
Competitive Scenario in the Global Functional Ingredients Market
Investment and agreement are common strategies followed by major market players. Some of the leading functional ingredients market players are ADM, Ingredion Incorporate, Cargill, Incorporated, ate & Lyle, Roquette Frères, Golden Grain Group Limited, FMC Corporation, Plasma Nutrition Inc., NutriBiotic, and Omega Protein Corporation.
| Aspect | Particulars |
| Historical Market Estimations | 2020-2021 |
| Base Year for Market Estimation | 2022 |
| Forecast Timeline for Market Projection | 2023-2032 |
| Geographical Scope | North America, Europe, Asia-Pacific, and LAMEA |
| Segmentation by Product |
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| Segmentation by Application |
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| Key Companies Profiled |
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