Global Functional Food Ingredients Market Size, Share, and Trends Analysis Report – Industry Overview and Forecast to 2031

Functional Food Ingredients Market Analysis

The functional food ingredients market is growing as demand rises for health-promoting foods that support immunity, digestion, and mental well-being. Recent advancements include microencapsulation technology, which preserves ingredient potency and allows for slow-release delivery. This method is especially valuable for probiotics, enzymes, and omega-3 fatty acids, as it enhances ingredient stability and bioavailability. Another key advancement is precision fermentation, used to develop plant-based and bioengineered proteins with high nutritional value and tailored amino acid profiles.

Manufacturers are also utilizing AI-driven data analytics to customize functional ingredient formulations based on consumer health trends and preferences. This approach has enhanced market reach, as producers can create personalized health supplements and fortified foods, meeting the needs of diverse demographics. The rising health consciousness among consumers, coupled with increasing clinical studies supporting ingredient efficacy, has driven market expansion. Functional food ingredients have become essential in products aimed at preventing chronic diseases, improving mental health, and boosting immunity, making the market poised for sustained growth globally.

Functional Food Ingredients Market Size

The global functional food ingredients market size was valued at USD 112.36 billion in 2023 and is projected to reach USD 188.76 billion by 2031, with a CAGR of 6.70% during the forecast period of 2024 to 2031. In addition to the insights on market scenarios such as market value, growth rate, segmentation, geographical coverage, and major players, the market reports curated by the Data Bridge Market Research also include in-depth expert analysis, pricing analysis, brand share analysis, consumer survey, demography analysis, supply chain analysis, value chain analysis, raw material/consumables overview, vendor selection criteria, PESTLE Analysis, Porter Analysis, and regulatory framework.

Functional Food Ingredients Market Trends

“Rising Demand for Plant-Based Ingredients”

A key trend driving the functional food ingredients market is the increasing consumer preference for plant-based ingredients, reflecting the shift towards sustainable, healthy lifestyles. This trend is especially strong in urban areas where demand for natural, organic products is high. Ingredients such as pea protein, chia seeds, and spirulina are commonly used due to their high nutritional value and adaptability across various food products. For instance, in September 2020, ADM launched a new line of functional protein solutions, including Arcon T finished pea proteins and Prolite MeatTEX and MeatXT wheat proteins. These innovative products are designed to improve the texture and mouthfeel of meat alternatives, making them more appealing to consumers. By enhancing flavor and texture, ADM aims to break down barriers to adoption, facilitating the growth of the meat substitute market.

Report Scope and Functional Food Ingredients Market Segmentation

Functional Food Ingredients Market Definition

Functional food ingredients are components added to food products that provide health benefits beyond basic nutrition. These ingredients, such as probiotics, prebiotics, vitamins, minerals, and omega-3 fatty acids, support specific bodily functions and contribute to overall well-being. For instance, probiotics promote gut health, while omega-3s are known for their anti-inflammatory properties. The rising consumer interest in health and wellness has led to an increased demand for functional food ingredients in products such as fortified cereals, dairy alternatives, and beverages. This trend reflects a shift toward preventive healthcare, with consumers seeking foods that enhance their health and prevent disease.

Functional Food Ingredients Market Dynamics

Drivers

• Increasing Vegan and Plant-Based Diets

The rising trend in vegan and plant-based diets is significantly driving the functional food ingredients market. With more consumers opting for plant-based nutrition, demand has surged for ingredients such as pea protein, chickpea flour, and flaxseed, as well as algae-sourced omega-3, providing alternatives to animal-derived products. This shift is particularly notable in regions such as North America and Europe, where consumers are increasingly seeking sustainable and cruelty-free options. For instance, in the protein category, brands such as Beyond Meat use pea protein to cater to the plant-based audience. This demand promotes market growth as brands continually innovate to offer healthier, vegan-friendly functional ingredients.

• Increasing Demand for Natural and Clean Label Products

The functional food ingredients market is driven by rising demand for natural, clean-label products. Consumers are increasingly scrutinizing ingredient lists, favoring foods with plant-based proteins, fibers, and organic compounds over artificial additives. For instance, in May 2021, Cargill introduced EpiCor, a novel probiotic product derived from dried yeast fermentate. Clinically validated through dietary enhancement trials, EpiCor is designed to balance gut microbiota and support immune system health. This launch underscores Cargill’s commitment to innovation in functional foods, providing consumers with scientifically backed products that promote overall well-being. EpiCor aims to enhance digestive health while fostering a healthier lifestyle.

Opportunities

• Technological Advancements in Extraction

Innovations in extraction technology are opening substantial opportunities in the functional food ingredients market by enabling more efficient, sustainable, and cost-effective ingredient production. Advanced techniques such as supercritical CO₂ extraction, enzymatic hydrolysis, and ultrasonic extraction allow manufacturers to derive functional ingredients with higher purity and yield, appealing to consumers focused on quality and natural sources. For instance, in October 2022, Teijin Limited established the Teijin Meguro Institute Co., Ltd. to enhance its capabilities in developing and manufacturing probiotics aimed at functional food applications. This initiative is designed to advance research in probiotics, enabling the company to offer high-quality functional food ingredients. The focus on probiotics aligns with growing consumer interest in gut health, providing innovative solutions for health-conscious consumers seeking dietary enhancements.

• Rise of Functional Beverages

The growth of functional beverages, including fortified juices, herbal teas, and enhanced waters, presents significant market opportunities. Consumers increasingly seek drinks that provide health benefits beyond hydration, driving demand for specialized ingredients such as adaptogens, vitamins, and minerals. For instance, in April 2022, At the Vitafoods Europe event in Geneva, Bioberica announced the launch of new ingredients targeting the digestive health and skin and beauty sectors. This strategic expansion aims to diversify their product portfolio and meet rising consumer demand for health-focused ingredients. Among their innovations, the company showcased Collavant n2, a native type II collagen ingredient designed for joint health, highlighting its potential in functional food applications.

Restraints/Challenges

• High Production Costs

High production costs pose a significant challenge for the functional food ingredients market. Sourcing high-quality ingredients, which are essential for product efficacy and consumer appeal, often incurs substantial expenses. These increased costs can translate into higher retail prices, making products less accessible to price-sensitive consumers. As a result, this restricts market reach and limits the potential customer base. Moreover, the elevated prices can drive consumers towards more affordable alternatives, particularly traditional food products that do not carry added health claims. This price sensitivity can hinder overall market growth, as a substantial segment of consumers may choose not to invest in functional food products.    

• Competition from Traditional Foods

Competition from traditional foods poses a significant challenge to the functional food ingredients market. Many consumers prefer familiar products that do not carry health claims, as these options often seem more trustworthy and established. Traditional foods, such as whole grains, fruits, and vegetables, are widely recognized for their inherent health benefits without the added marketing of functional ingredients. This familiarity creates a strong consumer preference, making it difficult for functional foods to penetrate the market effectively. In addition, the perception that traditional foods are healthier can lead to reluctance in trying new functional products, further hindering market growth and limiting the potential consumer base.

This market report provides details of new recent developments, trade regulations, import-export analysis, production analysis, value chain optimization, market share, impact of domestic and localized market players, analyses opportunities in terms of emerging revenue pockets, changes in market regulations, strategic market growth analysis, market size, category market growths, application niches and dominance, product approvals, product launches, geographic expansions, technological innovations in the market. To gain more info on the market contact Data Bridge Market Research for an Analyst Brief, our team will help you take an informed market decision to achieve market growth.

Impact and Current Market Scenario of Raw Material Shortage and Shipping Delays

Data Bridge Market Research offers a high-level analysis of the market and delivers information by keeping in account the impact and current market environment of raw material shortage and shipping delays. This translates into assessing strategic possibilities, creating effective action plans, and assisting businesses in making important decisions.

Apart from the standard report, we also offer in-depth analysis of the procurement level from forecasted shipping delays, distributor mapping by region, commodity analysis, production analysis, price mapping trends, sourcing, category performance analysis, supply chain risk management solutions, advanced benchmarking, and other services for procurement and strategic support.

Expected Impact of Economic Slowdown on the Pricing and Availability of Products

When economic activity slows, industries begin to suffer. The forecasted effects of the economic downturn on the pricing and accessibility of the products are taken into account in the market insight reports and intelligence services provided by DBMR. With this, our clients can typically keep one step ahead of their competitors, project their sales and revenue, and estimate their profit and loss expenditures.

Functional Food Ingredients Market Scope

The market is segmented on the basis of type, source, health benefits and application. The growth amongst these segments will help you analyze meagre growth segments in the industries and provide the users with a valuable market overview and market insights to help them make strategic decisions for identifying core market applications.

Type

• Probiotics
• Prebiotics
• Proteins and Amino Acids
• Phytochemical and Plant Extracts
• Omega-3 Fatty Acids
• Carotenoids
• Fibres and Specialty Carbohydrates
• Vitamins and Minerals

Source

• Natural
• Synthetic Source

Application

• Food
• Beverages

 Health Benefit

• Gut Health
• Heart Health
• Bone Health
• Immunity
• Nutritive Health
• Weight Management

Functional Food Ingredients Market Regional Analysis

The market is analysed and market size insights and trends are provided by country, type, source, health benefits and application as referenced above.

The countries covered in the market report are U.S., Canada, Mexico in North America, Germany, Sweden, Poland, Denmark, Italy, U.K., France, Spain, Netherland, Belgium, Switzerland, Turkey, Russia, Rest of Europe in Europe, Japan, China, India, South Korea, New Zealand, Vietnam, Australia, Singapore, Malaysia, Thailand, Indonesia, Philippines, Rest of Asia-Pacific (APAC) in Asia-Pacific (APAC), Brazil, Argentina, Rest of South America as a part of South America, U.A.E, Saudi Arabia, Oman, Qatar, Kuwait, South Africa, Rest of Middle East and Africa (MEA) as a part of Middle East and Africa (MEA)

North America is expected to dominate the functional food ingredients market, driven by increasing consumer demand for healthy convenience foods amidst busy lifestyles. This trend is expected to continue during the forecast period as more consumers seek nutritious options that fit their hectic routines.

Europe is expected to show significant growth in the functional food ingredients market, driven by the rising prevalence of heart diseases and obesity. Consumers are increasingly seeking products that promote health and wellness, leading to a surge in demand for innovative functional food ingredients.

The country section of the report also provides individual market impacting factors and changes in regulation in the market domestically that impacts the current and future trends of the market. Data points such as down-stream and upstream value chain analysis, technical trends and porter's five forces analysis, case studies are some of the pointers used to forecast the market scenario for individual countries. Also, the presence and availability of global brands and their challenges faced due to large or scarce competition from local and domestic brands, impact of domestic tariffs and trade routes are considered while providing forecast analysis of the country data.

Functional Food Ingredients Market Share

The market competitive landscape provides details by competitor. Details included are company overview, company financials, revenue generated, market potential, investment in research and development, new market initiatives, global presence, production sites and facilities, production capacities, company strengths and weaknesses, product launch, product width and breadth, application dominance. The above data points provided are only related to the companies' focus related to market.

Functional Food Ingredients Market Leaders Operating in the Market Are:

• BASF SE (Germany)
• ADM (U.S.)
• DuPont (U.S.)
• Arla Foods amba (Denmark)
• Kerry Group (Ireland)
• AJINOMOTO CO., INC. (Japan)
• DSM (Netherlands)
• Ingredion (U.S.)
• Tate & Lyle (U.K.)
• BENEO (Germany)
• Kemin Industries, Inc. (U.S.)
• Roquette Frères (France)
• Soylent (U.S.)
• A&B Ingredients (U.S.)
• Golden Grain Group Limited (Australia)
• Zimitech, Inc. (U.S.)
• Stratum Nutrition (U.S.)
• Ashland Inc. (U.S.)
• Coöperatie Koninklijke Cosun U.A. (Netherlands)
• Associated British Foods plc (U.K.)
• Amway (U.S.)
• Nestlé (Switzerland)
• DMH Ingredients (U.S.)

Latest Developments in Functional Food Ingredients Market

• In October 2022, Teijin Limited established the Teijin Meguro Institute Co., Ltd. to enhance its capabilities in developing and manufacturing probiotics aimed at functional food applications. This initiative is designed to advance research in probiotics, enabling the company to offer high-quality functional food ingredients. The focus on probiotics aligns with growing consumer interest in gut health, providing innovative solutions for health-conscious consumers seeking dietary enhancements
• In April 2022, At the Vitafoods Europe event in Geneva, Bioberica announced the launch of new ingredients targeting the digestive health and skin and beauty sectors. This strategic expansion aims to diversify their product portfolio and meet rising consumer demand for health-focused ingredients. Among their innovations, the company showcased Collavant n2, a native type II collagen ingredient designed for joint health, highlighting its potential in functional food applications
• In July 2021, Kerry Group, a leading Irish food company, confirmed its acquisition of Biosearch Life for USD 150 million. This strategic move enables Kerry to broaden its healthy ingredient offerings, particularly in probiotics and omega-3 fatty acids. By integrating Biosearch Life’s expertise and products, Kerry aims to enhance its competitive edge in the growing market for health-focused ingredients, catering to the increasing consumer demand for wellness solutions
• In February 2021, in a significant investment collaboration, Cargill and Manna Tree invested in Evolve BioSystems, Inc. This partnership aims to advance the commercialization of cutting-edge probiotics that address deficiencies in the infant gut microbiome. By focusing on infant health, the collaboration seeks to create specialized probiotic solutions that can enhance the development of newborns, reinforcing the importance of gut health from an early age
• In February 2020, Grupo Arcor and Ingredion Incorporated announced a joint venture to bolster their manufacturing capabilities and expand their geographic reach in Argentina, Chile, and Uruguay. This collaboration aims to enhance their offerings in the food and beverage sector, allowing both companies to leverage each other's strengths. By combining resources, they intend to innovate and provide high-quality food ingredients that meet diverse consumer needs in the region

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