Functional Flour Market: Opportunities Prevalent in Emerging Markets to Facilitate Growth

Global Functional Flour Market: Snapshot

Functional flour is derived from a combination of various kinds of grain and non-grain flour or genetically modified grain, which primarily has low-gluten content than the traditional flour. Functional flour also offers numerous health benefits to consumers which are not provided by traditional flour. It is a mixture of wheat along with non-grain flour, such as soy flour, corn flour and pulse flour, among others. Improved nutrient quantity together with low-gluten content is pushing the demand for functional flour market globally.

In addition, the rising consumer spending on processed food products is fuelling sales of functional flour products. Health benefits derived from these food products are expected to be the chief driver of the global functional flour market. On the flip side, several companies are reeling under price volatility of grains and stringent food label registrations. Nevertheless, the increasing non-food application of functional flour across diverse industries is likely to bolster market opportunities in the coming years.

The global functional floor market stood at US$70.4 bn in 2016 and is expected to reach US$126.8 bn by the end of 2025. If these figures hold true, the global functional flour market will rise at a positive CAGR of 6.8% between 2017 and 2025.

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Wheat More Popular than Other Segments as a Raw Material

Based on raw material, the global functional flour market has been segmented into wheat, maize, rice, and others. Of these, wheat constituted the leading segment with a share of 40.49% in the overall market in 2016. It is further expected to remain dominant through the course of the forecast period. Maize and rise held the second- and third-leading market share, respectively in the same year. These segments are also expected to retain their positions over the forecast period.

By type, the market is classified into pre-cooked flour, specialty flour, and fortified flour. Of these, the fortified flour segment held the dominant share of 41.28% in the overall market in 2016. Over the forthcoming years, the dominance of this segment is forecast to remain intact. Likewise, in terms of product, the market can be segmented into conventional flour, genetically modified flour, and additive based flour. Of these, the lead is expected to remain with genetically modified flour through the course of the forecast period.

Asia Pacific to Emerge as Dominant Region in Coming Years

Regionally, North America, Latin America, Europe, Asia Pacific, and the Middle East and Africa are the key segments in the global functional flour market. Among these regions, North America accounted for the leading market share in 2016. The region is witnessing high demand for gluten-free products among consumers. The increasing knowledge about health-benefits derived from functional flour, coupled with the rising demand for bakery products is aiding the expansion of the functional flour market in North America.

However, Asia Pacific is expected to emerge as the dominant regional market exhibiting the leading CAGR of 7.4% between 2017 and 2024. Factors such as the rising disposable income of consumers and increasing willingness to spend on health food, especially in countries such as India, China, and Japan are facilitating the market’s expansion in the region. Besides this, emerging nations in the Middle East and Africa and Brazil are expected to showcase lucrative opportunities.

Major players in the functional flour market are Cargill Incorporated, Archer Daniels Midland Company, The Scoular Company, Associated British Foods plc, SunOpta, Inc., The Hain Celestial Group, Inc., General Mills Inc., Parrish and Heimbecker, Limited, ConAgra Foods, Inc. and ITC Limited.

Functional Flour Market: Non-food Application of Wheat Flour to Create Lucrative Opportunities for Growth

Cargill Incorporated, Archer Daniels Midland Company, The Scoular Company, Associated British Food Plc, SunOpta, Inc., and The Hain Celestial Group, Inc. are some of the leading names operating in the global functional flour market. Besides a diverse product portfolio, these companies enjoy a strong global presence. Besides these and other established players, the market also showcases the presence of many regional players. Overall it is witnessing a highly competitive business environment, finds Transparency Market Research (TMR) in a new study.

Mergers and acquisitions are common among the leading market players eyeing to expand their product portfolio as well as regional footprint. The companies operating the global functional flour market is deriving growth from the growing organic food market. While developed economies will remain at the fore, the market players are looking towards exploring greener pastures across emerging nations.

According to TMR, the global functional flour market is expected to report a CAGR of 6.8% between 2017 and 2025. At this pace, the market’s valuation will reach US$126.8 bn by the end of 2025, from US$70.4 bn in 2016. Based on type, pre-cooked flour, specialty flour, and fortified flour constitute the key market segments. Of these, fortified flour emerged dominant with a share of 41.03% in the global market in 2016 and is expected to remain at the lead through the forecast period.

Regionally, North America led the global functional flour food market in 2016. However, exhibiting the leading CAGR of 7.4% in terms of value, Asia Pacific is forecast to emerge dominant by the end of 2025.

Opportunities Prevalent in Emerging Markets to Facilitate Growth

Globally, the demand for bakery products has increased at an exponential pace. This is the prime factor aiding expansion of the functional flour market. On account of changing consumer preference, bakery products and R.T.E have become staple in many countries across North America and Europe. “If not for this, the demand for functional flour would exhibit rise on account of increasing opportunities in Asia Pacific,” said a lead TMR analyst.

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TMR has projected the Asia Pacific market to beat other regions in terms of CAGR. Factors such as escalating population, rising disposable income, and subsequent concerns towards eating healthy especially in countries such as India, Japan, and China will create lucrative opportunities for the market. Besides this, the demand for gluten-free products is on a rise worldwide. This factor has considerably facilitated the global functional flour market.

Irregularity in Output Price of Crops Pose Threat

Despite lucrative opportunities worldwide, price volatility of grains and low margins have remained key challenges for the market. In the last few years, pace of gains witnessed by the market decelerated in Europe as consumers shifted towards industrial bakery and value-added processed bakery. In addition, irregularity in the output price of crops is limiting the scope for the market’s expansion. There has also been variations in the cost of fertilizers, energy, and chemicals, which had adverse influence on the overall market.

Nevertheless, with the increasing non-food application of functional flour will equipoise aforementioned challenges. “Wheat flour proteins exhibit thermoplastic, viscoelastic, and adhesive properties, which make them suitable for use in pressure-sensitive medical bandages,” observed the TMR report’s author. Other uses of wheat flour are cosmetics, edible films, and biodegradable resins. Such novel applications are expected to fuel growth opportunities for the market in the forthcoming years.

This review is based on a TMR report, titled “Functional Flour Market (Raw Materials - Wheat, Maize, and Rice; Type - Pre-Cooked Flour, Specialty Flour, and Fortified Flour; Product Type - Conventional Flour, Additive-based Flour, and Genetically Modified Flour; Application - Bakery Products, Noodles & Pasta and Non-food Applications) - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2017 - 2025.”

The report segments the global functional flour market as:

Global Functional Flour Market: By Raw Materials

• Wheat
• Maize
• Rice
• Others

Global Functional Flour Market: By Type

• Pre-Cooked Flour
• Specialty Flour
• Fortified Flour

Global Functional Flour Market: By Product Type

• Conventional Flour
• Additive-Based Flour
• Genetically Modified Flour

Global Functional Flour Market: By Application

• Bakery Products
• Noodles & Pasta
• Non-Food Application
• Others