The
vendor landscape of the market for functional food ingredients is a
consolidated one. Three companies, Associated British Foods PLC,
Cargill, Inc., and BASF SE are dominating the market, according to a
report published by Transparency Market Research. These three
companies collectively account for the 52.8% of the total market
share of functional food ingredients market in 2015. There are other
local players as well in various regions worldwide who have fierce
competition with these key players.
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The
report by Transparency Market Research observed the consolidated
nature of the global functional food ingredients market owing to the
aggressive and effective marketing strategies adopted by the leading
players. Acquisitions and merger with local players is also another
contributing factor towards the consolidated nature of the said
market.
The
revenue of the global functional food ingredients market was valued
at US$20.35 bn in 2016 and the market is expected to reach US$32.40
bn towards the end of the forecast period of 2016-2024. The market is
anticipated to expand at a CAGR of 6.0 % during the forecast period.
Developing
Economies to Emerge as the Most Promising Markets
North
America accounts for dominant share in the market, with the market in
Europe occupying the next spot. Countries such as India, Brazil, and
China are of high-value to the players in the global functional food
ingredients industry. Intense economic growth of the region along
with the ever-expanding working class population, who now has more
disposable income to spend, have made the region a lucrative market
for the industry. Furthermore, relaxed rules and regulations in the
Latin American and Asia Pacific countries would further bolster the
growth of the global
functional food ingredients market. The region of Asia
Pacific and Latin America would, thus, continue to be immensely
important for the manufacturers of functional food.
It
is also forecasted that the demand for functional food is to surpass
the demand for functional beverage. Despite ease of manufacturing and
consumption, functional foods are gaining popularity owing to their
health benefits. The segment of probiotics is anticipated to be the
leading one as more and more manufacturing companies are
incorporating probiotic bacteria in various products. Most of the
dairy products such as yoghurt are being incorporated with probiotic
bacteria.
Growing
Health Awareness to Fuel Growth
The
most important factor contributing towards the growth of the global
functional food ingredients market is the advantages of functional
foods over conventional diets and regular food products. According to
the report, research carried out in the recent past has revealed the
effectiveness of functional foods. Amidst increasing concern and
awareness for personal health, consumers are gradually shifting their
preferences towards healthy foods of high-value nutrition from junk
and convenience food. More consumers are now seen stocking up healthy
functional foods of high-nutritive value.
However,
stringent regulations and strict scrutiny concerning the food
industry continue to pose a challenge for the overall expansion of
the global functional food ingredients market. Various regulatory
bodies such as Food and Drug Administration, United Nations’ Food
and Agriculture Organization are continuously monitoring the use of
chemicals in food. These factors pressurize manufacturers to get
approvals for the distribution and production thereby delaying the
whole process.
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