Published Date : 16 May 2023
The global functional food market revenue is growing at USD 326.58 billion in 2023 and is expected to touch around USD 597.1 billion by 2032, poised to grow at a remarkable CAGR of 6.93% during the forecast period 2023 to 2032.
Functional foods contribute to well-being by offering additional nutritious value in existing ingredients. The rising number of health-conscious consumers and increasing demand for value-added gourmet food products globally drive the emerging growth of the functional food market. Functional foods are widely used in promoting health benefits and disease prevention. Functional foods are beneficial for reducing body fat, balancing liver health, maintaining good cholesterol, enhancing urination function, and maintaining eye and tooth health. Majorly functional foods are used in weight management.
On the other hand, the sports industry has started utilizing functional food to provide athletes with proper nutrition. Functional foods loaded with antioxidants offer many physiological benefits to the human body. Recently, the food industry has shown a lot of admiration due to the development of effective functional foods. Functional foods are available in the global market in the form of cereal, edible oils, dairy products and bakery products. Dairy products are highly affordable, thus acquiring the market's largest revenue share. Whereas increasing globalization and business trade have helped functional grains and edible oils reach across the globe from the point of origin. The global functional food market is anticipated to grow during the forecast period owing to the increased research activities in the nutrition science field worldwide.
Functional Food Market Report Scope:
|Report Coverage||USD 326.58 Billion|
|Projected Forecast Revenue in 2032||USD 597.1 Billion|
|Growth Rate from 2023 to 2032||CAGR of 6.93%|
|Largest Market||Asia Pacific|
|Forecast Period||2023 to 2032|
|Regions Covered||North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa|
Asia Pacific is the largest market for functional foods, and the region is anticipated to maintain growth during the forecast period. The existing wide range of food categories boosts the demand for functional foods. China and India are the most significant contributors to the growth of the functional food market of Asia Pacific. Southeast Asian countries such as Indonesia, Singapore and the Philippines are expected to witness a significant increase during the forecast period. The increasing population, rising importance of health products and expanding nutrition industry are key factors to fuel the market growth in Asia Pacific. The increased sale of health beverages, fortified milk and edible oils is supporting the functional food market in the region. Meiji Co, Teijin and Cargill India are leading players in the functional food market of Asia Pacific.
According to the Botanical Survey of India, more than eight thousand (8,000) species of medicinal plants are available in different parts of India. The availability of a wide variety of medicinal plants in India is boosting the discovery of advanced functional foods in the country. Major key players in the Indian functional food market focus on researching and developing new products to expand their business. For instance, in November 2022, a functional food startup, 'You Again', introduced a new raw wildflower honey blended with various herbs. This product aids the digestive system and completes the brand's mission to expand the business by associating ancient nutrition with modern lifestyles. The functional food market in South Korea is booming, which adds value to the overall revenue share of the market in Asia Pacific. According to the South Korean Ministry of Food & Drug Safety, probiotics and ginseng are driving the growth of the need for functional foods in the country. Consumers' rising interest in intestinal health has boosted the demand for probiotics based functional foods in South Korea.
A growing number of health concerns is expected to boost the demand for functional foods in North America. The large consumption of fast-food products has caused risks of numerous health problems for the population. The increasing prevalence of obesity is constantly driving customers to choose functional foods for well-being. Along with this, improved living standards and the rapidly evolving food industry propel the market's growth in North America. Moreover, the North American population is focused on consuming probiotics in their daily diet in order to improve digestive health. Increased demand for probiotics in the region provides multiple opportunities to innovate functional foods that aid digestive system-related issues. North America is fragmented with various major key players that are involved in the research, production and distribution of functional foods. General Mills Inc., Tyson Foods Inc., The Coco-Cola Company, Celsius Holding Inc. And Hearthside Food Solutions LLC are headquartered in North America that contribute to the growth of the functional food market in the region.
The rising production of functional probiotic cookies, dip bars, frozen food products and nutritional bars in European countries is boosting the growth of the functional food market in Europe. Europe is the fastest-growing region in the global functional food market. Changing consumer behaviour toward functional food and beverages in economically developed European countries (Germany, Italy, the UK and Denmark) is providing new opportunities for developing new functional food products. The presence of major key players such as Danone S.A., Nestle S.A., Arla Foods Amba and Raisio PLC has brought ample development in the European market.
Increasing utilization of functional food in weight management
Sedentary lifestyles and increased fast food consumption are raising the risk of obesity in younger people. Functional foods reduce appetite and enhance metabolism, and such foods can direct weight management by reducing obesity. Functional foods are preferred during the obesity reduction phase as they fulfil nutritional needs. The increasing number of fitness and nutrition centres across the globe has raised the demand for functional foods that aid weight loss or muscle gain. This factor is also considered to boost the growth of the functional food market in the upcoming years.
Lack of consumer acceptance of functional food
However, functional foods are proven safe by food safety standards, lack of consumer acceptance of functional food hinders the growth of the global functional food market. Most functional foods are expensive and tasteless, and these factors limit the consumption of functional foods for most people. Lack of awareness about the benefits of functional foods in underdeveloped countries and rural areas has restricted the expansion of functional food products. Moreover, unknown ingredients used in the production of functional foods affect the consumption of products. Additionally, value-added, expensive and gourmet foods are difficult to find everywhere. All these factors collectively act as restraining factors for the market's growth.
Availability of functional foods on e-commerce platforms
The availability of functional food products on e-commerce websites worldwide provides potential opportunities for retail sellers. E-commerce websites provide an enhanced shopping experience for consumers by offering a more comprehensive range of products, comparisons between various brands, offers, and product reviews. Many functional food suppliers are involved in the e-commerce business to diversify their sales and broaden the range of services. Booming e-commerce platforms and rising spending on online shopping in urban areas are projected to provide lucrative opportunities for functional food suppliers, retailers and manufacturers to grow businesses.
Stringent policies for regulatory approvals of functional food products
Receiving regulatory approval for new functional foods in the market is the biggest roadblock for many companies. Before entering the market, the functional foods are tested under food safety standards. Moreover, every country has different regulations for imported functional foods, and additional food safety standards affect the sale of imported functional foods. Due to the stringent government policies associated with the regulatory process, many companies seek partners or form ventures with other companies to expand their product portfolio.
Major Key Players:
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