Functional Food and Nutraceuticals Market Size (2024 – 2030)

The Global Functional Food and Nutraceuticals Market was valued at approximately USD 250 billion in 2023 and is estimated to expand at a Compound Annual Growth Rate (CAGR) of 7.5% during the forecast period of 2024-2030 to reach nearly USD 414.76 billion by 2030.

It is a variation of food and dietary additives rich in, other than basal nutrition, benefits for a better health condition. These added significant dietary supplements, fortified foods, and functional beverages help consumers who are new trendiers, adding value to their well-being. Among these consumer trends are the growing interest in health and wellness, aging population, and a rise in incidences of chronic diseases. Thus, nutraceuticals and functional foods are high in demand in North America, Europe, and Asia-Pacific, in particular, where people are able to pay a premium for healthy lifestyle-promoting products.

Key Market Insights

It contains functional beverages, such as energy drinks, fortified juices, and probiotics, which are some of the fastest-growing categories. One of the major factors that drive such demand is the consumer's need for convenience and on-the-go products associated with a health benefit.

The functional food and nutraceuticals market will hold massive potential in the Asia-Pacific region, with the fastest growth witnessed in the forecast period. This could be because of factors like growing disposable incomes, rapid rise of urbanization, and change in diet patterns of such countries.

Plant-based and natural ingredients are fast gaining traction in the market for functional foods and nutraceuticals. Consumers seek products that come from a natural source and are prepared to pay a premium price for such offers.

The need for more rigorous regulations, especially with the case of functional foods and nutraceuticals, becomes very evident as more and more governments and, in a way, regulating bodies all across the globe consider enhancing their standards on product safety and efficacy—all the same, more and more call on an increased amount of R&D investments by companies looking to operate within the law.

Global Functional Food and Nutraceuticals Market Drivers

Raising consumer awareness regarding health consciousness is driving market growth: Increased awareness of health and wellness amongst consumers drives the functional foods and nutraceuticals markets. With lifestyle-related diseases like obesity, diabetes, and cardiovascular diseases on the rise, consumers are increasingly turning toward functional foods and dietary supplements as a way of preventive healthcare. These fortified products—increased with vitamins, minerals, probiotics, and health-enhancing ingredients—are seen to provide benefits that enhance immunity, improve digestive health, and maintain general well-being. Additionally, with burgeoning medical treatment costs increasing with every new advancement, the present trend of preventive health is also being supported, making consumers much more proactive in managing health through the diet. This factor is expected to drive demand for functional foods and nutraceuticals in regions with high awareness and disposable incomes.

An aging demographic associated with demand for age-related health products is driving market growth: The aging global demographic is one of the prime drivers identified in functional foods and nutraceuticals. The aged population also falls under the high risk of suffering from a number of health-related issues like bone degeneration, related cognitive declines, and cardiovascular diseases. This has stressed and empowered the need to have such functional food and nutraceuticals very specifically devised for the age group of the elderly person. Demand for products associated with bone health, cardiovascular function, and boosting the functioning of the brain is immense from the elderly population. Besides, the necessity to stay active and healthy during old age has resulted in increased consumption of dietary supplements that address such age-related concerns. One of the factors that is expected to add to the demand for such products is the anticipated increase in life expectancy across the globe; hence, the aging population forms a key demographic for the functional food and nutraceuticals market.

Rise in Disposable Income, Changing Lifestyles is driving market growth: The rise in disposable incomes, particularly in emerging economies, had been one of the essential growing factors for the demand of functional food and nutraceutical products. With a larger number of consumers in developing countries having access to higher income, more people were able to spend their money on premium food since it offers certain benefits toward health. More important is the fact that this new consumer behavior is supported by a lifestyle change in which fitness, wellness, and balanced nutrition gain in importance. On the other hand, increasing urbanization puts emphasis on high convenience and high nutritional value foods, while their lifestyles built-in create the demand for "functional foods" easily digestible without the need for the consumer to go back home. It is little surprise, therefore, that the rise in income, coupled with shifting lifestyles, is collectively creating an ideal growth environment for the functional foods and nutraceuticals market, which continues to target these segments by coming out with a slew of innovative, health-oriented products.

Global Functional Food and Nutraceuticals Market Challenges and Restraints

Regulatory Compliance Challenges and Costs Pend Market Growth is restricting market growth: One serious challenge to the functional food and nutraceuticals market is raised by regulatory compliance. The industry has numerous rigid regulations and standards that were set by the different national and international regulatory entities to ensure the safety and efficiency of products. These regulations differ significantly between countries, so it can be complicated and, in most cases, expensive for an organization to comply. The painful process of getting approvals and certifications for new ingredients or products is very time-consuming and expensive, which may slow down the market entry of new products. On the other hand, the justification of health claims by manufacturers of functional food and nutraceuticals is under severe examination with scientific proof by governing bodies. This somehow fact increased the expenses on R&D and the need for clinical trials, thereby skyrocketing the costs for firms. It is in this regard that new guidelines and demands implemented from time to time reshaped the regulation, and following it accordingly becomes a challenge to be dealt with by the manufacturers' side.

High Cost of Functional Ingredients and Production is Limiting the Market is restricting market growth: Another very important challenge being faced by the functional foods and nutraceuticals market is the high costs incurred in obtaining and manufacturing functional ingredients. Ingredients, especially probiotics, omega-3 fatty acids, and plant extracts, are mostly used in making functional foods and nutraceuticals. These tend to be derived from expensive sources and thus processed co-moderately. The cost of such ingredients is often driven by such things as the cost of raw materials, extraction processes, and quality control mechanisms. Moreover, functional foods and nutraceuticals require a technical kind of manufacturing to get the right equipment and technology meant for stabilization and increased availability of active ingredients, thereby increasing production costs. These high costs sometimes get transferred to the consumer in the form of higher product prices, again keeping the market underdeveloped, especially in the price-sensitive regions. Continuous innovation to further meet consumer demands for natural, organic, and clean-label products increases R&D and hence production costs for manufacturers in the market.

Market Opportunities                     

The market for functional food and nutraceuticals has enormous potential for growth, primarily from the changing consumer focus toward better health and well-being. One of the most promising areas of opportunity is the development of personalized nutrition products. An indication of increased demand is shown through the awareness by consumers of their specific health demands, which is driving the market toward customized food and supplements. With the application of genetic testing and genetic data analytics, the development of personalized nutritional plans can be made for specific dietary requirements, health conditions, and the types of living of individuals. This is likely to drive market innovation toward more customized products that help people reach their health goals, like weight management, digestive health, or immune support. Another opportunity area appears to develop with the emerging functional food and nutraceuticals market in developing countries. Minh observed a hike in demand in the parts of Asia and Latin America amid high rates of urbanization, growing incomes, and flourishing healthy lifestyle culture. Companies effectively able to tap these markets by offering functional foods and supplements, which are not only affordable but also accessible, are going to be set for high growth. This plant-based and natural ingredients trend is going to rise in the upcoming years. As the consumer today is becoming more concerned about clean labeling with natural and organic ingredients, the companies that offer quality and plant-based functional food and supplements to the market are the ones that will make the most of this opportunity.

FUNCTIONAL FOOD AND NUTRACEUTICALS MARKET REPORT COVERAGE:

Functional Food and Nutraceuticals Market Segmentation - By Product

• Functional Foods

• Functional Beverages

• Dietary Supplements

• Personal Care Nutraceuticals

Growing consumer preference for convenient on-the-go health solutions increases sales for the Functional Beverages segment. Functional beverages, including fortified juices, energy drinks, and probiotic drinks to name but a few, have been hugely demanded by all health-seeking consumers who are up to getting quick and easy health solutions. The segment is expected to remain ahead, with more introduction of newer flavors and formulations.

Functional Food and Nutraceuticals Market Segmentation - By Application

• Cardiovascular Health

• Digestive Health

• Immunity Enhancement

• Weight Management

• Others

Cardiovascular Health is the largest segment in the Functional Food and Nutraceuticals Market. The increase in the prevalence of heart-related diseases, for many reasons, the prime being unhealthy diet habits, sedentary lifestyle, and the increase in stress levels, has translated into the rise in demand for cardiovascular health-related products. Consumers are moving more and more towards functional foods and supplements because these foods can contribute to the management of cholesterol levels, reduce blood pressure, and thus increase heart health.

Functional Food and Nutraceuticals Market Segmentation - By Region

• North America

• Asia-Pacific

• Europe

• South America

• Middle East and Africa

The region of North America rules the Functional Food and Nutraceuticals Market. This is also owing to quite a few factors, such as a maximum degree of consumer health and well-being awareness, well-stabilized healthcare infrastructure, and key market players holding major stakes. The consumers of the region are adopting functional foods and nutraceuticals in their diet to prevent chronic diseases and for overall health. On the other hand, the existing regulatory environment in North America is supportive of development and commercialization of products, which drives growth for innovative products.

COVID-19 Impact Analysis on the Functional Food and Nutraceuticals Market

The COVID-19 crisis has significantly influenced the Functional Food and Nutraceuticals Market, wherein consumer demand for foods that have immune-boosting and overall good-health-enhancing product qualities has been on the rise. The concern of keeping the immune system of customers fit has risen on an appreciably large scale due to the health crisis worldwide, and the sales of functional foods and dietary supplements purporting to boost immunity have increased. There was, therefore, an increased demand for probiotics, vitamins, and minerals as people sought to reduce the health risks associated with the pandemics. Moreover, the shift towards e-commerce as both a source of information and a purchase/transaction system has been advanced rapidly by the use of these media by both producers and consumers of functional foods and nutraceuticals. Though the supply chain was hugely disturbed in the initial period, the market is back to the new normal rather quickly. Currently, manufacturers are gearing up to maintain availability of products at the stores and meeting growing demand by the consumers for health-based products. This is likely to boost during the post-pandemic era, due to the continuously rising thrust of consumers for preventive healthcare and wellness.

Latest Trends/Developments

The Functional Food and Nutraceuticals Market is witnessing several significant trends and developments. One prominent trend is the globally rising demand for plant-based and natural ingredients. Manufacturers have started including natural, organic, and non-GMO ingredients in their products as an increased number of consumers will look for clean-label products. A present trend is easily recognized within the functional beverages and dietary supplements category, for it is there where consumers wish a product, which corresponds to their ethical and environmental values. Personalized nutrition is also catching up with the trend. Development is now possible for the creation of personalized nutrition products that cater to the individual health needs and preferences with technology and data analytics advancement. This trend drives the innovation in the companies present in the market, and investments are made in R&D to derive formulations for "tailored" functional foods and supplements. Moreover, the integration of digital health products such as wearables and apps enables the users to keep a record of their health and necessitates a diet plan stringently, and hence, drives the market demand for functional food and nutraceuticals.

Key Players

1. Nestlé S.A.

2. Archer Daniels Midland Company

3. Danone S.A.

4. PepsiCo Inc.

5. General Mills, Inc.

6. BASF SE

7. Herbalife Nutrition Ltd.

8. Amway Corporation

9. DSM Nutritional Products

10. Glanbia PLC