Global Functional Food and Beverage Market 2024–2033

Reports Description

As per the current market research conducted by CMI Team, the global Functional Food and Beverage Market 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.

The functional food and beverage market comprises products fortified with bioactive compounds, nutrients, or ingredients that offer additional health benefits beyond basic nutrition. These products are formulated to address specific health concerns, such as digestive health, heart health, weight management, and immune support, among others.

Functional foods and beverages often contain vitamins, minerals, probiotics, antioxidants, and herbal extracts, targeting consumers seeking preventive healthcare solutions and wellness-oriented lifestyles. The market is driven by increasing health consciousness, aging populations, technological advancements in food science, and regulatory support for health claims, reflecting a growing demand for products that promote overall well-being and vitality.

Functional Food and Beverage Market – Significant Growth Factors

The Functional Food and Beverage Market presents significant growth opportunities due to several factors:

• Health Consciousness: Increasing awareness about the role of nutrition in overall health drives demand for functional foods and beverages as consumers seek products that offer specific health benefits and address dietary concerns.

• Aging Population: With aging populations globally, there is a growing demand for functional products that support healthy aging, improve cognitive function, and address age-related health issues.

• Innovation in Product Development: Continuous innovation in ingredients, formulations, and delivery systems drives the development of new functional food and beverage products, expanding market opportunities and meeting evolving consumer preferences.

• Regulatory Support: Supportive regulatory frameworks and health claims regulations provide manufacturers with opportunities to market their products based on scientifically validated health benefits, enhancing consumer trust and confidence.

• Expansion into Emerging Markets: Growing disposable incomes, urbanization, and changing lifestyles in emerging markets present opportunities for functional food and beverage companies to expand their presence and tap into new consumer demographics.

• Personalized Nutrition: The trend towards personalized nutrition offers opportunities for companies to develop tailored functional products that meet individual health needs and preferences, leveraging technologies like genetic testing and digital health platforms.

Functional Food and Beverage Market – Mergers and Acquisitions

The Functional Food and Beverage Market has seen several mergers and acquisitions in recent years, with companies seeking to expand their market presence and leverage synergies to improve their product offerings and profitability. Some notable examples of mergers and acquisitions in the Functional Food and Beverage Market include:

• In 2023, Nestlé, the Swiss food giant, introduced two new vegan chocolate chips under its Toll House brand. These dairy-free chips cater to the increasing demand for plant-based products, offering consumers a vegan-friendly option for baking and snacking.

• In 2023, Cocos Organic unveiled new products, including the UK’s inaugural Organic Coconut Milk Yog Tubes and a Light Organic Natural Yoghurt. The dairy-free Yog Tubes, suitable for kids over six months, are gluten-free, nut-free, and refined sugar-free. Their Cocos Organic range boasts organic, all-natural ingredients, with no dairy, lactose, gluten, or soya.

• In 2021, Amway Corp. invested USD 15 million in its Michigan manufacturing facility to redesign a 90,000-square-foot plant for producing sugar-free XS Energy Drinks. This expansion aims to meet global demand, supplying XS Energy Drinks exclusively to the U.S., Latin America, and Canada markets.

These mergers and acquisitions helped companies expand their product offerings, improve their market presence, and capitalize on growth opportunities in the Functional Food and Beverage Market. The trend is expected to continue as companies seek to gain a competitive edge in the market.

COMPARATIVE ANALYSIS OF THE RELATED MARKET

Functional Food and Beverage Market – Significant Threats

The Functional Food and Beverage Market faces several significant threats that could impact its growth and profitability in the future. Some of these threats include:

• Regulatory Challenges: Stringent regulations governing health claims, labeling requirements, and ingredient approvals can pose challenges for manufacturers, leading to delays in product launches, increased compliance costs, and limitations on marketing claims.

• Misinformation and Consumer Skepticism: Misinformation about the efficacy and safety of functional ingredients, as well as consumer skepticism towards health claims, can undermine trust in functional food and beverage products, impacting consumer acceptance and market growth.

• Competition from Traditional Foods: Traditional foods and beverages that naturally contain health-promoting nutrients or functional properties may compete with fortified or enhanced products, especially if consumers perceive them as more natural or wholesome alternatives.

• Supply Chain Disruptions: Disruptions in the supply chain, such as raw material shortages, transportation delays, or production disruptions, can impact the availability and affordability of functional food and beverage products, leading to market volatility and price fluctuations.

• Market Saturation and Fragmentation: The increasing number of functional food and beverage products in the market can lead to saturation and fragmentation, making it challenging for companies to differentiate their offerings, capture consumer attention, and maintain market share amidst intense competition.

Category-Wise Insights:

By Ingredient

• Carotenoids: Carotenoids are natural pigments found in plants and algae, known for their antioxidant properties and potential health benefits, such as eye health and immune support. Trends include the incorporation of carotenoid-rich ingredients like beta-carotene, lutein, and lycopene in functional beverages, snacks, and supplements, catering to consumer demand for natural colorants and antioxidants.

• Dietary Fibers: Dietary fibers are indigestible carbohydrates that promote digestive health, regulate blood sugar levels, and support weight management. Trends include the use of soluble and insoluble fibers from sources like oats, chicory root, and psyllium husk in functional foods and beverages, addressing consumer demand for products that promote satiety, gut health, and overall well-being.

• Fatty Acids: Fatty acids, including omega-3 and omega-6 fatty acids, are essential fats with various health benefits, such as heart health, brain function, and inflammation regulation. Trends include fortifying foods and beverages with sources of omega-3 fatty acids like fish oil, flaxseed oil, and algae oil, as well as incorporating plant-based sources like chia seeds and walnuts to meet consumer demand for functional products supporting cardiovascular health and cognitive function.

• Minerals: Minerals are essential nutrients involved in various physiological functions, such as bone health, muscle contraction, and nerve transmission. Trends include fortifying functional foods and beverages with minerals like calcium, magnesium, zinc, and iron, addressing consumer concerns about nutrient deficiencies and supporting overall health and well-being.

• Prebiotics & Probiotics: Prebiotics and probiotics are beneficial bacteria and fibers that support gut health, digestion, and immune function. Trends include incorporating prebiotic fibers like inulin, chicory root, and resistant starch, as well as probiotic strains like Lactobacillus and Bifidobacterium, into functional foods and beverages like yogurt, kefir, and fermented drinks, meeting consumer demand for products promoting digestive wellness and immune support.

• Vitamins: Vitamins are essential micronutrients that play vital roles in various bodily functions, including metabolism, immunity, and cellular repair. Trends include fortifying functional foods and beverages with vitamins like vitamin C, vitamin D, vitamin E, and B vitamins, addressing consumer concerns about nutrient deficiencies and supporting overall health, immunity, and vitality.

• Others: This category encompasses other functional ingredients, such as antioxidants, phytonutrients, amino acids, and adaptogens, which offer additional health benefits beyond basic nutrition. Trends include incorporating superfood ingredients like matcha, turmeric, spirulina, and collagen peptides into functional foods and beverages, catering to consumer demand for products that promote vitality, longevity, and holistic wellness.

By Product

• Bakery & Cereals: Functional bakery and cereal products are fortified with vitamins, minerals, fibers, and other nutrients to offer health benefits such as improved digestion, heart health, and energy levels. Trends include the incorporation of ancient grains, gluten-free options, and innovative formulations with probiotics and omega-3 fatty acids to meet consumer demand for healthier baked goods and breakfast cereals.

• Dairy Products: Functional dairy products, including milk, yogurt, and cheese, are enriched with probiotics, calcium, vitamin D, and protein to support digestive health, bone health, and immunity. Trends include the development of lactose-free options, plant-based alternatives, and flavored varieties with added functional ingredients like collagen and antioxidants to cater to diverse consumer preferences.

• Meat, Fish & Eggs: Functional meat, fish, and egg products are enhanced with omega-3 fatty acids, vitamins, and minerals to promote heart health, muscle growth, and overall well-being. Trends include the demand for lean protein sources, organic and sustainably sourced options, and fortified products with added nutrients like iron and vitamin B12 to address specific dietary needs.

• Soy Products: Functional soy products, such as tofu, tempeh, and soy milk, are rich in protein, fiber, and phytoestrogens, offering benefits for heart health, bone health, and hormonal balance. Trends include the development of non-GMO and organic options, flavored varieties, and fortified products with added vitamins, calcium, and plant sterols to enhance nutritional value and appeal to health-conscious consumers.

• Fats & Oils: Functional fats and oils are fortified with omega-3 fatty acids, antioxidants, and plant sterols to promote heart health, reduce inflammation, and support cognitive function. Trends include the demand for healthy cooking oils like olive oil and avocado oil, omega-3 enriched products, and plant-based alternatives to traditional animal fats, reflecting consumer preferences for healthier dietary fats.

• Others: This category encompasses a wide range of functional food and beverage products, including snacks, beverages, and supplements fortified with various nutrients and bioactive compounds to offer specific health benefits. Trends include the rise of functional beverages like kombucha and probiotic drinks, functional snacks with added protein and fiber, and personalized nutrition solutions tailored to individual health needs and lifestyles.

By Application

• Sports Nutrition: Sports nutrition products provide athletes and active individuals with nutrients to optimize performance, support muscle recovery, and enhance endurance. Trends include the use of protein-rich formulations, plant-based alternatives, and personalized nutrition solutions tailored to individual training goals.

• Weight Management: Weight management products help individuals achieve and maintain a healthy weight through calorie control, appetite suppression, and metabolism support. Trends include the use of low-calorie substitutes, meal replacement shakes, and natural appetite suppressants.

• Immunity: Immunity-boosting products contain vitamins, minerals, antioxidants, and herbal extracts to support the body’s natural defense mechanisms against infections and illnesses. Trends include the incorporation of immune-boosting ingredients like vitamin C, zinc, elderberry, and medicinal mushrooms into functional foods and beverages.

• Digestive Health: Digestive health products contain probiotics, prebiotics, fibers, and digestive enzymes to promote gut health, improve digestion, and alleviate gastrointestinal issues. Trends include the development of gut-friendly foods, fermented products, and digestive health supplements targeting consumers seeking digestive comfort and overall well-being.

• Clinical Nutrition: Clinical nutrition products are formulated to meet specific dietary requirements for individuals with medical conditions, nutritional deficiencies, or special dietary needs. Trends include the development of medical foods, nutritional supplements, and therapeutic diets prescribed by healthcare professionals to manage chronic diseases and support optimal health outcomes.

• Cardio Health: Cardiovascular health products contain ingredients like omega-3 fatty acids, plant sterols, and antioxidants to support heart health, lower cholesterol levels, and reduce the risk of cardiovascular diseases. Trends include the use of heart-healthy oils, functional beverages, and cholesterol-lowering supplements targeting consumers concerned about cardiovascular wellness.

• Others: This category includes functional food and beverage products addressing various health concerns, such as bone health, brain health, joint health, skin health, and mood support. Trends include the incorporation of targeted nutrients, botanical extracts, and bioactive compounds into products designed to promote specific health benefits and enhance overall well-being.

Report Scope

Functional Food and Beverage Market – Regional Analysis

The Functional Food and Beverage Market is segmented into various regions, including North America, Europe, Asia-Pacific, and LAMEA. Here is a brief overview of each region:

• North America: In North America, the trend in the Functional Food and Beverage Market includes a focus on clean label products, with consumers demanding transparency in ingredients and manufacturing processes. Additionally, there’s a growing interest in plant-based alternatives and sustainable packaging solutions, driven by environmentally conscious consumers. Functional beverages infused with adaptogens and CBD are gaining popularity, catering to consumers seeking stress relief and relaxation.

• Europe: In Europe, the trend in the Functional Food and Beverage Market revolves around personalized nutrition, with companies offering customized products and services tailored to individual health needs and preferences. There’s a strong emphasis on traditional and natural ingredients, with consumers favoring products with minimal processing and artificial additives. Functional dairy products, such as probiotic yogurts and kefir, remain popular, while functional snacks and convenience foods are gaining traction.

• Asia-Pacific: In the Asia-Pacific region, functional food and beverage trends are influenced by cultural traditions and holistic approaches to health and wellness. Traditional ingredients like turmeric, ginger, and green tea are widely used in functional products, reflecting their perceived health benefits. Functional drinks, such as herbal teas and fermented beverages, are popular in countries like Japan and South Korea. There’s also a growing interest in beauty-enhancing functional foods, catering to consumers seeking radiant skin and anti-aging benefits.

• LAMEA (Latin America, Middle East, and Africa): In the LAMEA region, the Functional Food and Beverage Market is characterized by a focus on functional ingredients sourced from local botanicals and superfoods. Functional beverages like yerba mate and açai-based drinks are popular in South America, while date-based products are prevalent in the Middle East. With increasing urbanization and changing lifestyles, there’s a rising demand for convenient functional snacks and on-the-go nutrition solutions across the region.

Competitive Landscape – Functional Food and Beverage Market

The Functional Food and Beverage Market is highly competitive, with a large number of manufacturers operating globally. Some of the key players in the market include:

• 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

These companies operate in the market through various strategies such as product innovation, mergers and acquisitions, and partnerships.

Emerging players in the Functional Food and Beverage Market, such as Beyond Meat, Impossible Foods, and Oatly, are adopting innovation to enter the market. They focus on plant-based alternatives, sustainable production methods, and disruptive marketing strategies to appeal to health-conscious consumers seeking environmentally friendly and ethical food options. Key players dominating the market include Nestlé, Danone, PepsiCo, and The Coca-Cola Company.

These industry giants leverage extensive distribution networks, brand recognition, and substantial R&D investments to maintain market dominance. They continuously innovate by introducing new products, acquiring innovative startups, and expanding into emerging markets, solidifying their leadership positions in the global Functional Food and Beverage Market.

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