Nutraceuticals Market by Product (Functional Foods, Functional Beverages, and Dietary Supplements), Distribution Channel (Supermarket & Hypermarket, Specialty Stores, E-commerce, and Others), and Regional Analysis (North America, Europe, Asia-Pacific, and LAMEA): Global Opportunity Analysis and Industry Forecast, 2021–2028

Global Nutraceuticals Market Analysis

The global nutraceuticals market is predicted to garner $516.5 billion in the 2021–2028 timeframe, growing from $288.5 billion in 2020, at a healthy CAGR of 7.60%.

Market Synopsis

Strategic alliances among market players, along with growing demand for dietary supplement, are expected to accelerate the growth of the nutraceuticals market.

However, there are few side effects of health supplements along with high manufacturing cost of nutraceuticals, which is a growth-restricting factor for the market.

According to the regional analysis, the Asia-Pacific nutraceuticals market is anticipated to grow during the review period with revenue of $203.5 billion and CAGR of 7.60% due to increasing population that is fitness intent.

Nutraceuticals Overview

Nutraceuticals are the products that are made up of natural ingredients that have high health benefits comparative to food with basic nutritional value. There are different types of nutraceuticals such as dietary supplements that include energy pills or bars, gummies, drinks, protein powders, functional foods, and drinks.

Impact Analysis of COVID-19 on the Global Nutraceuticals Market

Though the novel coronavirus pandemic had a devastating effect on several industries, the nutraceuticals market experienced a significant growth during this period. Most of the people across the globe started adopting food habits that provided health benefits such as boosting the immunity of the body. Moreover, nutraceuticals such as dietary supplements include omega 3 polyunsaturated fatty acids, probiotics, zinc, vitamin C, and D. Therefore, the importance of nutraceuticals has skyrocketed, thus driving the growth of the market.

In addition to this, several researchers and scientist are motivating the society to recover from the chaotic situation with their strategic plans and steps. For instance, according to a research article by Harvard College, in April 2020, poor diet and nutritional status increases the risk COVID-19. The above-stated factors show that the pandemic may have generated substantial investment opportunities in the market during the pandemic.

Increasing Prevalence of Functional Foods to Surge the Market Growth

The global nutraceuticals industry is witnessing a massive growth mainly due to increase in demand for functional foods. Food and beverage producers are continuously deploying fortification of nutritional additives such as vitamins, minerals, omega-3 fatty acids, and fibers in different food products. The main aim of the companies is to incorporate additives to increase the nutritional content of the food items, thereby driving the adoption of functional foods.

The emergence of nutraceuticals is already leading market players to innovate strategies to attract customers. For example, in February 2021, ADM (Archer-Daniels-Midland Company), American based multinational food processing company, announced that they were going to acquire U.S.-based Deerland Probiotics & Enzymes. Deerland Probiotics & Enzymes is a global provider of dietary and probiotic supplements using enzyme, prebiotic, and probiotic technology. Some of the products are for sports nutrition, digestive health, women’s health, cellular repair, and cardiovascular health. These types of acquisition and initiatives from market leaders are also predicted to drive the growth of the market.

To know more about global nutraceuticals market drivers, get in touch with our analysts here.

High Investment Cost of Nutraceuticals to Restrain the Market Growth

The set up cost of nutraceutical industry is costly compared to other industry because nutraceuticals require high research and development, which increases the investment cost of nutraceuticals company. Therefore, higher cost may create a negative impact on the growth of the market during the forecast period.

Increasing Consumer Awareness about Dietary Supplements in the Market to Create Massive Investment Opportunities

The global nutraceuticals market is growing at a very fast pace due to rising living standards of people, encouraging them to buy best quality products for their health. People across the globe are opting for food that will fulfill the dairy nutrient requirements owing to changing lifestyles along with hectic work schedules. Therefore, increasing health consciousness and living standards are major growth accelerating factors of the nutraceuticals, thereby positively affecting the market growth.

Furthermore, in November 2019, Amway, US based company, that offers nutrition, beauty, personal care, and homecare products, revealed that they invested in dietary supplement innovation center in China, amount of USD 200 billion. This investment helps in offering custom-made solutions to the company, which may further lead to lucrative market opportunities for key players in the upcoming years.

To know more about global nutraceuticals market opportunities, get in touch with our analysts here.

Source: Research Dive Analysis

The functional foods sub-segment is predicted to have a dominating as well as fastest growing market share in the global market. The sub-segment is expected to register a revenue of $225.4 billion during the forecast period. Functional food industry is driving at very fast pace owing to trends of technologies such as nanoencapsulation and bio-encapsulation along with innovations in the functional food ingredients industry. Moreover, key players operating in the market are adopting strategic collaborations to offer best type of functional food products to customers. For instance, in May 2021, Cargill, US based privately held global food corporation, announced that they launched a new probiotic product named EpiCor, a dried yeast that is fermented clinically and beneficially provides immune system support and modulate the gut microbiota. These factors and strategic alliances by key companies may bolster the growth of the sub-segment during the forecast period. 

Source: Research Dive Analysis

The supermarket & hypermarket sub-segment of the global nutraceuticals market is projected to have the fastest growth as well as a dominant share and surpass $233.5 billion by 2028, with an increase from $123.6 billion in 2020. This growth in the market can be attributed to rising number of people preferring supermarket & hypermarket owing to freedom of selection and other facilities. Furthermore, at supermarkets, buyers can get quality goods at affordable and lower prices. All such elements may increase the demand for supermarket & hypermarket sub-segment and further surge the market growth.

Source: Research Dive Analysis

The Market for Nutraceuticals in Asia-Pacific to be the Most Dominant

The Asia-Pacific nutraceuticals market is dominating the market by registering a revenue of $203.5 billion by 2028, growing at a CAGR of 7.60%. The growth shall be a result of increasing health concerned consumers that will motivate functional beverages makers to adopt strategies to manufacture healthy functional beverages with associated health benefits. Moreover, growing population of young adults and athletes is one of the factors propelling the growth of the nutraceuticals market in the Asia-Pacific region. Thus, key players operating in nutraceuticals market are opting for various strategies to hold a leading position in the market. For example, in 2020, PepsiCo, the world's largest bottler of Pepsi-Cola beverages, announced that they have launched a new functional beverage, known as Driftwell that helps in de-stressing and relaxation. This type of advancements in the market may increase the growth of the sector during the forecast period. Such factors showcase that the demand for nutraceuticals exponentially in the upcoming years.

The Market for Nutraceuticals in North America to be the Fastest Growing

The North America nutraceuticals market accounted $81.7 billion in 2020, growing at fastest rate and projected to register a revenue of $160.6 billion by 2028. The fastest growth of the North America nutraceuticals market is driven by the factors such as increasing working population and earning sources in the region. Moreover, the strong presence of leading nutraceuticals providers and manufacturers is fueling the market growth across the globe.

Competitive Scenario in the Global Nutraceuticals Market

Product launches and mergers & acquisitions are common strategies followed by major market players.

Source: Research Dive Analysis

Some of the leading nutraceuticals market players are Amway Corporation, Archer Daniels Midland Company, DuPont de Nemours, Inc., BASF SE, Cargill, Inc., Danone, General Mills Inc., Koninklijke DSM N.V., Nestle S.A., and PepsiCo, Inc.

Porter’s Five Forces Analysis for the Global Nutraceuticals Market:

• Bargaining Power of Suppliers: The service suppliers of nutraceuticals market are high in number and are larger and more globalized. So, there will be less threat from the suppliers.
  Thus, the bargaining power of suppliers is low. 
• Bargaining Power of Buyers: Buyers demand for innovative products in nutraceuticals that can offer high health benefits. This has increased the pressure on the nutraceuticals providers to offer the best product in a cost-effective way. Thus, many suppliers are offering best yet cost–effective nutraceuticals. This gives the buyers the option to freely choose product that best fits their preference.
  Thus, the bargaining power of the buyers is high. 
• Threat of New Entrants: Companies entering the nutraceuticals market are adopting various innovations such as developing nutraceuticals that can increase the immunity to fight against the viruses.
  Thus, the threat of the new entrants is moderate.
• Threat of Substitutes: There are different types of nutraceuticals available for various health benefits,
  thus, the threat of substitutes is low.
• Competitive Rivalry in the Market: The competitive rivalry among industry leaders is rather intense, especially between the global players including Amway Corporation and Archer Daniels Midland Company. These companies are launching their value-added services in the international market and strengthening the footprint worldwide.
  Therefore, competitive rivalry in the market is high.