Functional Food Ingredients Market Expected to Reach US$32.40 bn by 2024

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.