The global functional ingredients market involves the use of ingredients that provide additional health or nutrition benefits beyond its basic nutritional value when consumed. Some key functional ingredients include vitamins, minerals, prebiotics, proteins, and plant extracts. These ingredients are added to food products such as beverages, bakery items, dairy products, and confectioneries. The growing health-consciousness among consumers is driving the demand for functional food and beverages products. Manufacturers are focusing on developing innovative products containing functional ingredients that aid in immune health, digestion, heart health, brain health, anti-aging, weight management, and others.
The global functional ingredients market is estimated to be valued at US$ 94.31 million in 2024 and is expected to exhibit a CAGR of 5.3% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
The Functional Ingredients Market is Expected to be Flourished by Growing Demand for Healthy and Nutritious Food Products
Two key drivers for the growth of the functional ingredients market include the growing demand for healthy and nutritious food products and the expanding food and beverage industry. The rising health consciousness among consumers has increased the demand for functional food and beverages. Manufacturers are introducing various product ranges containing functional ingredients that provide additional health benefits. This growing demand for functional foods and beverages is expected to boost the market for functional ingredients over the forecast period. In addition, the expanding food and beverage industry worldwide has increased the application of functional ingredients in various product categories. Key manufacturers are focusing on fortifying their products with functional ingredients to offer supplementary health advantages to consumers.
Segment Analysis
The global functional ingredients market is dominated by the functional food and beverages segment which accounts for over 50% of the market share. The growing health and wellness trend has led to increased demand for functional food and beverages products enriched with ingredients that provide additional health benefits. Functional dairy products, fortified fruit juices, enriched bottled water, and sports and energy drinks make up the bulk of the functional beverages segment. The bakery and confectionery segment is another major sub-segment due to increasing consumer preference for snacks with added health benefits.
PEST Analysis
Political: The functional ingredients market is positively impacted by supportive regulations and guidelines issued by regulatory bodies encouraging addition of nutrients and fortification of staple food products. However, stringent labeling and approval norms for new ingredients delay product launches.
Economic: Rising income levels and growing health awareness are driving demand for high-value functional food and beverages products. The COVID-19 pandemic has further boosted sales of immunity-boosting products. However, high R&D costs involved in developing innovative ingredients pose challenges.
Social: Changing lifestyles, busy schedules, and increasing prevalence of lifestyle diseases are driving the need for food products that promote wellness. Growing health consciousness and focus on preventive healthcare among consumers also drive the adoption of fortified and enriched food and beverages.
Technological: Advancements in microencapsulation, nanoencapsulation, and customized release technologies help improve the stability, bioavailability, and functionality of active ingredients. This enables development of innovative delivery systems for nutrients and supplements.
Key Takeaways
The Global Functional Ingredients Market Size was valued at US$ 94.31 Mn in 2024 and is expected to grow at a CAGR of 5.3% during the forecast period.
North America currently dominates the market owing to high health awareness and large health supplement consumption in the US and Canada. Europe is also a major market for functional ingredients driven by supportive F&B industry regulations. Regulations push food producers to fortify staples like milk, cereals and juices.
Key players operating in the functional ingredients market are Alkremes Plc., Teva Pharmaceutical Industries Ltd., Glenmark Pharmaceuticals, Titan Pharmaceuticals, Inc., Pfizer, Inc., GlaxoSmithKline plc., Johnson & Johnson, Perrigo Company plc., Cipla Limited, Hikma Pharmaceuticals Plc., Dr. Reddy€TMs Laboratories Limited, Indivior Inc., and Mylan N.V.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it