Functional Food Industry Overview
|Study Period:||2016 -2027|
|Fastest Growing Market:||Asia Pacific|
*Disclaimer: Major Players sorted in no particular order
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Functional Food Market Analysis
The Functional Food Market was valued at USD 180,843.73 million in the current year, and it is projected to register a CAGR of 2.71% over the next five years.
Functional foods offer specific health benefits that are beyond the regular daily intake of nutrients, such as improved bone health, cholesterol management, improved heart health, and other benefits associated with eye health and vision. The increasing demand for nutritional and fortifying food additives is anticipated to drive market growth. Food manufacturers are deploying the fortification of nutritional additives, such as omega-3 fatty acids, fiber, vitamins, and minerals, in their product offerings. The intention of incorporating the aforementioned additives in the food industry is to increase the nutritional content of food items.
Functional food in sports nutrition has emerged as the largest segment due to the increasing commercialization of sports nutrients and the availability of a wide product range, including creatine and whey protein-based functional food. In January 2021, Danone North America launched a new plant-based protein beverage aimed at athletes. Silk Ultra is a multi-serve, dairy-free beverage with 20 grams of soy protein per serving, designed for muscle maintenance and repair. The drink is enriched with calcium and vitamins A, D, B2, and B12 and comes in three flavors: creamy chocolate, unsweet, and original, which, according to the company, includes 2.5 times the protein of typical dairy milk.
Functional Food Industry Segments
Functional foods can be considered whole, fortified, enriched, or enhanced foods that provide health benefits beyond the provision of essential nutrients (e.g., vitamins and minerals) when consumed at efficacious levels as part of a varied diet on a regular basis. The functional food market is segmented by product type, distribution channel, and geography. On the basis of product type, the market is segmented into bakery products, breakfast cereals, snack/functional bars, dairy products, baby food, and other product types. Snack/functional bars have been further sub-segmented into sports bars, energy bars, and protein bars. Similarly, dairy products have been further sub-segmented into yogurt and other functional dairy products. By distribution channel, the market is segmented into supermarkets and hypermarkets, specialist retailers, convenience stores, online retail, and other distribution channels. Based on geography, the report offers a detailed analysis of the regions, including North America, South America, Europe, Asia-Pacific, the Middle East, and Africa. For each segment, the market sizing and forecasts have been done based on value (in USD Million).
|Other Product Types|
|Other Distribution Channels|
Functional Food Market Trends
This section covers the major market trends shaping the Functional Food Market according to our research experts:
Increasing Consumption of Nutrient-enriched Food
The growing population and changes in food fashion among people are the major drivers for the market. Consumers are inclined toward foods containing functional ingredients to reduce the risk of certain health conditions, such as obesity, weight management, diabetes, and cardiovascular diseases. The hectic lifestyles and increasing stress have contributed to the increasing prevalence of such health disorders. Moreover, in general, people tend to consume big meals three to four times a day. This has created a negative impact on people’s health. The growing awareness and shift in eating habits have led to a trend of eating multiple smaller meals during the day.
These factors have given a boost to healthy foods and the replacement of meals with nutritional biscuits, snacks, and energy or protein bars. Also, the growing trend of on-the-go snacking is becoming extremely popular among children, owing to their need for regular meals, while adults prefer them due to their active hectic lifestyles. In addition, healthy snacking options, like energy bars, form affordable and convenient solutions for people and help keep their weight checked and regulated. In July 2021, Clif Bar & Company introduced nut butter-filled Energy Bars into the Australian market via its exclusive distributor Unique Health Products. These bars were launched in three flavors, namely, Peanut Butter, Chocolate Peanut Butter, and Chocolate Hazelnut Butter, and have been certified organic, containing 12% nut and pea protein, and free from artificial flavors and synthetic preservatives.
Individuals are more concerned about their health and willing to pay extra for food specifically beneficial to their health. Protein is becoming a priority for consumers around the world as it is considered “anti-fat” and “anti-sugar” and a high source of instant energy. Thus, consumers are increasingly seeking protein ingredients in food products, which is expected to positively impact the growth of the functional food market
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Asia-Pacific Dominates the Market
Asia-Pacific is the major market for functional food products. Increasing consumer interest, and a better understanding of the immunity-enhancing property of proper diet and food habits, are some of the key factors driving the growth of vitamin-fortified and mineral-enriched food and beverage product sales. Moreover, in countries such as Japan and China, manufacturers are becoming more creative with dairy packaging, ingredients, and flavors, introducing fortified variants easily, thus boosting the functional food market. Yogurt, owing to its multifunctional attributes, holds great prominence among consumers.
A large section of the Chinese population is lactose intolerant. Hence, consumers find plant-based yogurt a relatively better option due to its fermented nature, making it easily digestible. For instance, in May 2021, the Chinese plant-based snacking company, Marvelous Foods, launched Yeyo Coconut yogurt on the e-commerce platform, Tmall. Yeyo is plant-based coconut yogurt that has zero added sugar, artificial flavors, and sweeteners. The initial launch featured three SKUs, and the range includes a ‘pure’ sugar-free flavor, plus two yogurt-granola cups that have seasonal fruit and nut granola topping for flavor and nutrition.
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Functional Food Market Competitor Analysis
The functional food market is competitive, with many domestic and multinational players competing for market share. Companies focus on new product launches with healthier ingredients/organic claims and acquisitions, mergers, partnerships, and expansions as their key marketing strategies. Some of the major players in the market studied are Danone SA, Nestlé S.A., PepsiCo Inc., Kellogg's Company, and Abbott Laboratories. Key players are now focusing on social media platforms and online distribution channels for their products online marketing and branding to attract more customers. To attain a larger share of the market studied, manufacturers are revitalizing their product portfolios targeting health-conscious consumers.
Functional Food Market Top Players
The Kellogg's Company
*Disclaimer: Major Players sorted in no particular order
Functional Food Market Recent Developments
- In July 2022, Laird Superfood entered the fortified snack category with the launch of its new plant-based protein bar. The protein bar is made from peas, hemp seeds, pumpkin seeds, dietary fibers, and all the essential amino acids.
- In March 2022, Danone launched the new drinkable yogurt Activa+ to promote better health and immunity. The yogurt contains vitamins C, D, and zinc to help maintain the immune system. The yogurt is available in three different flavors i.e. strawberry, raspberry, and peach.
- In March 2022, Cliff Bar Company launched Cliff Thins Snack Bar in the United States. Cliff Bar Thins area is crispy, crunchy, and made for everyday snacking. The snack bars are available in three different flavors i.e., Chocolate Chip, Chocolate Peanut Brownie, and White Chocolate Macadamia Nut flavor.
Functional Food Market Report - Table of Contents
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Drivers
4.2 Market Restraints
4.3 Porter's Five Forces Analysis
4.3.1 Bargaining Power of Suppliers
4.3.2 Bargaining Power of Consumers
4.3.3 Threat of New Entrants
4.3.4 Threat of Substitutes
4.3.5 Intensity of Competitive Rivalry
5. MARKET SEGMENTATION
5.1 Product Type
5.1.1 Bakery Products
5.1.2 Breakfast Cereals
5.1.3 Snack/Functional Bars
188.8.131.52 Sports Bars
184.108.40.206 Energy Bars
220.127.116.11 Protein Bars
5.1.4 Dairy Products
18.104.22.168 Other Functional Dairy Products
5.1.5 Baby Food
5.1.6 Other Product Types
5.2 Distribution Channel
5.2.2 Specialist Retailers
5.2.3 Convenience Stores
5.2.4 Online Retail
5.2.5 Other Distribution Channels
5.3.1 North America
22.214.171.124 United States
126.96.36.199 Rest of North America
188.8.131.52 United Kingdom
184.108.40.206 Rest of Europe
220.127.116.11 Rest of Asia-Pacific
5.3.4 South America
18.104.22.168 Rest of South America
5.3.5 Middle East & Africa
22.214.171.124 South Africa
126.96.36.199 United Arab Emirates
188.8.131.52 Rest of Middle East & Africa
6. COMPETITIVE LANDSCAPE
*List Not Exhaustive
6.1 Most Adopted Strategies
6.2 Market Share Analysis
6.3 Company Profiles
6.3.1 Lotus Bakeries
6.3.2 Nestlé S.A.
6.3.3 Hearthside Food Solutions LLC
6.3.4 Valio Eesti AS
6.3.5 The Kellogg's Company
6.3.6 Abbott Laboratories
6.3.7 PepsiCo Inc.
6.3.8 Danone SA
6.3.9 Clif Bar & Company
6.3.10 General Mills
6.3.11 Laird Superfoods
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
Functional Food Market Research FAQs
What is the study period of this market?
The Global Functional Food Market market is studied from 2016 - 2027.
What is the growth rate of Global Functional Food Market ?
The Global Functional Food Market is growing at a CAGR of 2.71% over the next 5 years.
Which region has highest growth rate in Global Functional Food Market ?
Asia Pacific is growing at the highest CAGR over 2021- 2026.
Which region has largest share in Global Functional Food Market ?
Asia-Pacific holds highest share in 2021.
Who are the key players in Global Functional Food Market ?
Danone SA, Abbott Laboratories, PepsiCo Inc., The Kellogg's Company, Nestlé S.A. are the major companies operating in Global Functional Food Market .
Global Functional Food Industry Reports
In-depth industry statistics and market share insights of the Global Functional Food Market sector for 2020, 2021, and 2022. The Global Functional Food Market research report provides a comprehensive outlook of the market size and an industry growth forecast for 2023 to 2028. Available to download is a free sample file of the Global Functional Food Market report PDF.