Functional Food and Beverages Market Forecasts to 2030 - Global Analysis By Type, By Ingredient, Application, Distribution Channel and By Geography

According to Stratistics MRC, the Global Functional Food and Beverages Market is accounted for $358.74 billion in 2023 and is expected to reach $768.62 billion by 2030 growing at a CAGR of 11.5% during the forecast period. Foods and drinks that have been enhanced with particular nutrients or ingredients to offer additional health benefits are referred to as functional foods and beverages. These products are often created to address particular health concerns, support specific bodily functions, or improve the quality of life. Functional foods and beverages can include a wide range of items, such as probiotic yogurt for gut health and fortified cereals with added vitamins and minerals.

According to the Food and Agriculture Organization (FAO), in 2050, the global demand for food, particularly nutrient-rich, will be twice as compared to 2013.

Market Dynamics:

Driver:

Increasing demand for nutrition-rich and healthy diets

The increasing demand for healthy and nutrition-rich diets is a significant driver in the functional food and beverages market. As consumers become more health-conscious, they seek products that not only provide basic sustenance but also offer specific health benefits. This demand is fueled by a growing awareness of the link between diet and overall well-being, including disease prevention and improved vitality. Moreover, functional foods and beverages, enriched with vitamins, minerals, antioxidants, and beneficial ingredients like probiotics or omega-3 fatty acids, cater to these consumer preferences, aligning with a broader trend towards proactive health management and preventive nutrition.

Restraint:

High Product costs

High product costs are expected to limit the functional food and beverages market. The development, formulation, and production of functional products often require specialized ingredients and processes, making them more expensive than standard foods and beverages. Consumers may be hesitant to invest in these higher-priced items, leading to potential market limitations. Additionally, the price barrier can hinder the market's accessibility for some demographic groups, impacting their ability to incorporate health-focused products into their diets.

Opportunity:

New product developments and innovation to support growth

With an ever-evolving understanding of health and nutrition, there is room for creating novel, science-backed products that address specific health concerns and cater to changing consumer preferences. The demand for innovative ingredients, formulations, and delivery methods, such as personalized nutrition and functional superfoods, continues to grow. Furthermore, companies that invest in research and development, along with creative marketing, can tap into this opportunity by offering unique and appealing functional products, meeting the increasing consumer appetite for better health through dietary choices, and thus driving market expansion.

Threat:

High regulation standards

Stringent regulatory requirements pose a significant threat to the functional food and beverages market. The complex and evolving nature of health claims, labeling, and safety standards can create hurdles for manufacturers seeking to launch new products. Compliance with these regulations is time-consuming and costly, potentially stifling innovation and product development. It may also lead to consumer skepticism regarding product claims and efficacy. In addition, navigating these requirements demands a substantial investment in research, testing, and legal expertise, which can deter smaller players and limit market access, ultimately hampering the industry's growth and competitiveness.

COVID-19 Impact:

The functional food and beverage market was greatly impacted by the COVID-19 pandemic. It increased consumer awareness of health and wellness, which fueled demand for goods boosting defense mechanisms, general health, and wellbeing. Products that function and contain antioxidants and vitamins to strengthen the immune system have grown in popularity. In addition, there was a brief decline in demand for foods and drinks with functional ingredients that promote physical fitness. In spite of these challenges, the sector showed resiliency by adapting to shifting consumer preferences and market dynamics.

The health and wellness segment is expected to be the largest during the forecast period

In the anticipated timeframe, it is anticipated that the health and wellness segment will hold the largest market share. This dominance is mainly driven by consumers' growing attention to their health, preventive medicine, and pursuit of a balanced diet. Functional foods and beverages that are enhanced with necessary nutrients, antioxidants, and healthy ingredients fit in perfectly with this trend. As a result of these factors, this segment is expanding, signaling a significant shift towards dietary choices that are focused on health.

The functional beverages segment is expected to have the highest CAGR during the forecast period

The functional beverages segment is poised to experience the highest growth rate in the functional food and beverages market during the forecast period. This surge is driven by shifting consumer preferences towards convenient and health-conscious drink options. Functional beverages offer a wide range of benefits, from hydration to specific health improvements such as enhanced energy, weight management, and mental well-being. Additionally, the market has seen innovations in product formulations, flavors, and packaging, making these beverages increasingly appealing. In addition, the convenience and portability of functional drinks align well with modern lifestyles, contributing to their projected prominence in the market's growth trajectory.

Region with largest share:

The North American region is expected to witness the largest market share owing to growing numbers of consumers concerned about their health choosing foods that are high in nutritive and functional ingredients. The region's food market is expanding as a result of consumers' growing emphasis on maintaining good physical, mental, and overall health through a balanced diet. Additionally, the presence of major food corporations in the area, including Tyson Foods, General Mills, and others, who are actively pursuing their potential in the functional food and beverage space, can further support regional market growth in the upcoming years.

Region with highest CAGR:

The functional food and beverages market in Asia Pacific is expanding rapidly due to the region's diverse cultures and populations, which have led to a wide variety of culinary traditions and dietary preferences. In recent years, there has been a notable shift towards Western-style diets, convenience foods, and increased consumption of processed and functional foods. Demand for healthy and natural products has surged, driving growth in segments like organic foods and plant-based alternatives. Moreover, the burgeoning middle-class population and urbanization are reshaping food retail and distribution, which is propelling market growth.

Key players in the market:

Some of the key players in Functional Food and Beverages market: Arla Foods, Celsius Holding, Inc., Danone S.A., Fonterra Co-operative Group Limited, General Mills Inc., Glanbia Plc, Hearthside Food Solutions LLC, Kraft Heinz Company, Nestle S.A, PepsiCo Inc., Red Bull GmbH, Suntory Holdings Ltd, The Bountiful Company, The Coca-Cola Company, The Hain Celestial Group, Tyson Foods Inc. and Universal Nutrition.

Key Developments:

In May 2023, Kirin Holdings has partnered with Kellogg Japan to introduce a new addition to Kellogg's All-Bran portfolio, as it aims to support immune system health. According to Kirin, the new product can be enjoyed as a daily meal. In addition, the company highlights that this is the first 'meal'-type product containing L. lactis strain Plasma as a functional food, as opposed to a snack or side dish.

In May 2023, Functional frozen food manufacturer Blender Bites Ltd. is launching a line of frozen coffee-based beverages. The brand's 1-Step Frappes are designed to offer a nutritious and convenient beverage option for health-conscious consumers. Formulated from organic, dairy-free, gluten-free and functional ingredients, like collagen and lion's mane, each serving of the blended iced coffee includes 90 mg of caffeine and a combination of 12 vitamins and minerals.

In February 2023, Biotechnology company Kyowa Hakko USA and sparkling beverage company Centr debuted Centr Enhanced, a sparkling water that features a blend of nootropic and adaptogenic ingredients. The launch of Centr Enhanced marks the first time Centr is stepping outside of the CBD-related category. Centr Enhanced sparkling water includes Kyowa Hakko's Cognizin citicoline, which is a nutrient that supports "comprehensive brain health," according to the company. The product claims to elevate mood, to reduce stress, and to improve focus, mental clarity, memory and energy.

Types Covered:

• Functional Foods
• Functional Beverages

Ingredients Covered:

• Carotenoids
• Amino Acids
• Dietary Fibers
• Electrolytes
• Fatty Acids
• Minerals
• Probiotics
• Other Ingredients

Applications Covered:

• Health & Wellness
• Cardio Health
• Clinical Nutrition
• Digestive Health
• Immunity
• Sports Nutrition
• Weight Management
• Other Applications

Distribution Channels Covered:

• Supermarkets and Hypermarkets
• Convenience Stores
• E-commerce
• Other Distribution Channels

Regions Covered:

• North America
  • US
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • Italy
  • France
  • Spain
  • Rest of Europe
• Asia Pacific
  • Japan
  • China
  • India
  • Australia
  • New Zealand
  • South Korea
  • Rest of Asia Pacific
• South America
  • Argentina
  • Brazil
  • Chile
  • Rest of South America
• Middle East & Africa
  • Saudi Arabia
  • UAE
  • Qatar
  • South Africa
  • Rest of Middle East & Africa

What our report offers:

• Market share assessments for the regional and country-level segments
• Strategic recommendations for the new entrants
• Covers Market data for the years 2021, 2022, 2023, 2026, and 2030
• Market Trends (Drivers, Constraints, Opportunities, Threats, Challenges, Investment Opportunities, and recommendations)
• Strategic recommendations in key business segments based on the market estimations
• Competitive landscaping mapping the key common trends
• Company profiling with detailed strategies, financials, and recent developments
• Supply chain trends mapping the latest technological advancements

Free Customization Offerings:

All the customers of this report will be entitled to receive one of the following free customization options:

• Company Profiling
  • Comprehensive profiling of additional market players (up to 3)
  • SWOT Analysis of key players (up to 3)
• Regional Segmentation
  • Market estimations, Forecasts and CAGR of any prominent country as per the client's interest (Note: Depends on feasibility check)
• Competitive Benchmarking
  • Benchmarking of key players based on product portfolio, geographical presence, and strategic alliances