Global Functional Food and Beverage Market Size Likely to Surpass at a CAGR of 6.7% By 2033

As per the current market research conducted by CMI Team, the global Functional Food and Beverage Market size is expected to record a CAGR of 6.7% from 2024 to 2033. In 2024, the market size is projected to reach a valuation of USD 129.6 Billion. By 2033, the valuation is anticipated to reach USD 232.4 Billion.

Functional Food and Beverage Market: Growth Factors and Dynamics

• Rising Health Consciousness: Increasing consumer awareness about the importance of nutrition and preventive healthcare is driving the demand for functional foods and beverages. Consumers are actively seeking products that offer specific health benefits, such as improved digestion, immunity support, and weight management.

• Aging Population and Chronic Diseases: The aging population and the rise in chronic diseases like obesity, diabetes, and cardiovascular disorders are fueling the demand for functional foods and beverages. These products are perceived as proactive measures to maintain health, manage existing conditions, and reduce the risk of developing lifestyle-related diseases.

• Innovation in Product Development: Continuous innovation in product formulation and ingredient technology is driving growth in the Functional Food and Beverage Market. Manufacturers are introducing novel ingredients, fortification techniques, and delivery systems to enhance the health-promoting properties and sensory attributes of functional products, appealing to a wider consumer base.

• Expanding Retail Distribution Channels: The proliferation of retail distribution channels, including supermarkets, health food stores, e-commerce platforms, and specialty stores, is widening the accessibility and availability of functional foods and beverages. Increased shelf space and online visibility allow manufacturers to reach diverse consumer demographics and capitalize on emerging market trends.

• Regulatory Support and Labeling Standards: Supportive regulatory frameworks and standardized labeling requirements for functional foods and beverages are fostering consumer confidence and market growth. Clear labeling of health claims, ingredient lists, and nutritional information helps consumers make informed purchasing decisions and builds trust in the safety and efficacy of functional products.

• Globalization and Cultural Influences: Globalization and cultural influences are driving the adoption of functional foods and beverages worldwide. As dietary preferences evolve, manufacturers are tailoring product formulations and marketing strategies to resonate with diverse cultural norms, dietary traditions, and lifestyle preferences, tapping into new market opportunities and driving cross-cultural consumer acceptance.

• Technological Advancements and Digitalization: Technological advancements and digitalization are reshaping the Functional Food and Beverage Market landscape. Manufacturers are leveraging technologies like artificial intelligence, big data analytics, and IoT devices to optimize production processes, enhance supply chain management, and personalize consumer experiences.

Functional Food and Beverage Market: Partnership and Acquisitions

• In 2022, Foods Ingredients introduced a protein-enriched juice drink concept with the launch of Lacprodan ISO for beverage fortification. This innovative product aims to enhance nutritional value, offering consumers a convenient way to increase protein intake while enjoying refreshing beverages.

• In 2023, Hindustan Unilever Ltd (HUL) introduced Millet Horlicks in chocolate flavor in Tamil Nadu, featuring a blend of super-grains like Finger Millet, Sorghum, Foxtail Millet, and Pearl Millet. HUL claims this product to be a natural source of calcium, iron, protein, and fiber, marking a nutritious addition to their portfolio.

Report Scope

Functional Food and Beverage Market: COVID-19 Analysis

The COVID-19 pandemic has significantly impacted the Functional Food and Beverage Market, with the industry experiencing both positive and negative effects. Here are some of the key impacts:

• Shift in Consumer Preferences: COVID-19 has led to a shift in consumer preferences towards functional foods and beverages that offer immunity-boosting and health-enhancing properties. Concerns about maintaining overall health and well-being during the pandemic have increased demand for products fortified with vitamins, minerals, antioxidants, and other bioactive compounds.

• Disruption in Supply Chains: The pandemic has disrupted global supply chains, leading to challenges in sourcing raw materials, production delays, and distribution bottlenecks for functional food and beverage manufacturers. Restrictions on transportation and logistics, as well as labor shortages, have impacted the availability and accessibility of functional products in the market.

• Innovation in Product Development: Functional food and beverage companies are focusing on innovation to introduce new products tailored to emerging consumer needs and preferences post-pandemic. This includes developing immunity-boosting formulations, clean label products, and convenient on-the-go formats to meet evolving market demands.

• E-commerce Expansion: The acceleration of e-commerce adoption during the pandemic has prompted functional food and beverage companies to expand their online presence and digital marketing efforts. Investing in e-commerce platforms, direct-to-consumer channels, and digital advertising allows manufacturers to reach a wider audience and mitigate the impact of disruptions in traditional retail channels.

• Supply Chain Resilience: Functional food and beverage companies are enhancing supply chain resilience by diversifying sourcing options, building strategic partnerships with suppliers, and implementing risk management strategies. Strengthening local and regional supply chains, reducing dependency on international imports, and implementing agile production processes improve flexibility and responsiveness to market disruptions.

• Health and Wellness Messaging: Leveraging health and wellness messaging in marketing campaigns and product labeling helps functional food and beverage companies capitalize on consumer demand for products that support immune health, stress management, and overall well-being. Clear communication of product benefits, nutritional claims, and ingredient transparency enhances consumer trust and loyalty in the post-pandemic recovery phase.

In conclusion, the COVID-19 pandemic has had a mixed impact on the Functional Food and Beverage Market, with some challenges and opportunities arising from the pandemic.

List of the prominent players in the Functional Food and Beverage Market:

• Nestlé S.A.
• Danone S.A.
• PepsiCo Inc.
• The Coca-Cola Company
• Kellogg Company
• General Mills Inc.
• Abbott Laboratories
• The Kraft Heinz Company
• Yakult Honsha Co. Ltd.
• Unilever N.V.
• Meiji Holdings Co. Ltd.
• Glanbia plc
• Herbalife Nutrition Ltd.
• Ocean Spray Cranberries Inc.
• Hain Celestial Group Inc.
• Others

The Functional Food and Beverage Market is segmented as follows:

By Ingredient

• Carotenoids
• Dietary Fibers
• Fatty Acids
• Minerals
• Prebiotics & Probiotics
• Vitamins
• Others

By Product

• Bakery & Cereals
• Dairy Products
• Meat, Fish & Eggs
• Soy Products
• Fats & Oils
• Others

By Application

• Sports Nutrition
• Weight Management
• Immunity
• Digestive Health
• Clinical Nutrition
• Cardio Health
• Others

Regional Coverage:

North America

• U.S.
• Canada
• Mexico
• Rest of North America

Europe

• Germany
• France
• U.K.
• Russia
• Italy
• Spain
• Netherlands
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• New Zealand
• Australia
• South Korea
• Taiwan
• Rest of Asia Pacific

The Middle East & Africa

• Saudi Arabia
• UAE
• Egypt
• Kuwait
• South Africa
• Rest of the Middle East & Africa

Latin America

• Brazil
• Argentina
• Rest of Latin America