Functional Food Ingredients Market to Grow by USD 53.14 Billion (2024-2028), Driven by Rising Demand from Probiotics, with Market Evolution Powered by AI - Technavio

NEW YORK, Nov. 18, 2024 /PRNewswire/ -- Report on how AI is driving market transformation - The global functional food ingredients market size is estimated to grow by USD 53.14 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of almost 7.38%  during the forecast period. Increased demand for functional food ingredients from probiotics segment is driving market growth, with a trend towards increasing demand for food containing omega-3 fatty acids. However, high cost of functional foods  poses a challenge.Key market players include Ajinomoto Co. Inc., AMCO Proteins, Archer Daniels Midland Co., Arla Foods amba, Associated British Foods Plc, BASF SE, Bio Botanica Inc., Cargill Inc., Chr Hansen Holding AS, Cooperatie Koninklijke Cosun UA, Givaudan SA, Ingredion Inc., International Flavors and Fragrances Inc., Kemin Industries Inc., Kerry Group Plc, Koninklijke DSM NV, Omega Protein Corp., Sudzucker AG, Symrise AG, and Tate and Lyle PLC.

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Market Driver

Functional food ingredients market is witnessing significant growth due to increasing consumer awareness about health and wellness. Key trends in this market include the use of prebiotics and probiotics for gut health and immune system support. Nutrigenomics is another trending area, focusing on how foods interact with genes to prevent chronic diseases like cardiovascular disease, obesity, Alzheimer's disease, and diabetes. Technological advancements such as high-hydrostatic pressure, ultrasound-assisted extraction, microwave-assisted extraction, pulsed electric field, radio-frequency drying, supercritical fluids, and others are used to extract nutrients from various sources. Carotenoids, fiber, minerals, vitamins, flavonoids, and other antioxidants are in high demand for their antioxidant and anti-inflammatory properties. Prevalence of chronic diseases and micronutrient deficiencies, especially in the middle class, is driving government fortification programs. Probiotic strains, minerals, fiber, vitamins, and amino acids are used in various food applications including energy drinks, proteins in sports drinks, creatine, and branch-chained amino acids. Health-conscious consumers prefer clean labels, organic food, and plant-based products. International food regulations and legislative regulations play a crucial role in the market. Probiotic ingredients, microorganisms, and probiotic supplements are popular in the pharmaceutical segment. Personalization and precision medicine based on genetic makeup and lifestyle are emerging trends. Functional food ingredients find applications in various food categories like sauces, soups, gravies, frozen desserts, baked goods, fat replacers, low-fat products, and fat-free products. Calorie content reduction and nutritional value improvement are key focus areas. Technological conditions and legislative regulations are important factors influencing the market. 

The functional food ingredients market is experiencing significant growth due to the increasing demand for omega-3 fatty acids. These essential nutrients are primarily sourced from fish oils and fish scales, but consumers often dislike the unpleasant smell and taste associated with them. To address this issue, manufacturers are exploring alternative sources such as algae, krill (zooplankton), and genetically modified (GM) plants. Omega-3 fatty acids, particularly eicosatetraenoic acid and docosahexaenoic acid, have been approved by the US FDA for consumption from these sources. The global demand for omega-3-based products is on the rise due to their health benefits, including prevention of diseases like arrhythmias, thrombosis, high blood pressure, and inflammation. This increasing demand and the identification of new sources are expected to fuel the growth of the functional food ingredients market during the forecast period. 

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 Market Challenges

• Functional food ingredients market is witnessing significant growth due to increasing consumer awareness towards health and wellness. Prebiotics and probiotics are key areas of focus, addressing chronic diseases like obesity, diabetes, and Alzheimer's disease. Nutrigenomics is another emerging trend, customizing food to individual genetic makeup. Technological advancements, such as high-hydrostatic pressure, ultrasound-assisted extraction, and pulsed electric field, are improving the extraction and stability of functional ingredients. Key functional ingredients include carotenoids (beta-carotene, lutein, zeaxanthin), minerals, fiber, vitamins, flavonoids (quercetin, kaempferol, catechins, anthocyanidins), antioxidants, and anti-inflammatory compounds. Probiotic strains are gaining popularity in yogurt, kefir, and supplements, addressing allergies and gut health. Challenges include legislative regulations, clean labels, and organic food preferences. The market is expanding into areas like energy drinks, sports drinks, proteins, and dietary supplements, catering to health-conscious consumers. The animal feed industry and pharmaceutical segment are also potential markets. Technological advancements continue to drive innovation, reducing calorie content, improving nutritional value, and enhancing texture and stability. International food regulations, middle class growth, and government fortification programs are creating opportunities. Functional food ingredients address various health concerns, from cancer risk reduction to cognitive function improvement, making them essential components of a balanced diet.
• The global functional food ingredients market faces a significant challenge due to the high cost of functional foods. Despite projected growth in sales, economic factors have impeded market expansion. Functional foods, including nutraceuticals and medical foods, are priced significantly higher than conventional alternatives. Distribution, storage, transportation, and complex extraction processes contribute to these elevated costs. Functional foods are typically priced 30% to 500% more than comparable conventional foods, which may limit their adoption worldwide. Consequently, the high cost of functional foods is expected to negatively impact the growth of the global functional food ingredients market throughout the forecast period.

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Segment Overview 

This functional food ingredients market report extensively covers market segmentation by  

1. Product 
• 1.1 Probiotics and prebiotics
• 1.2 Proteins and amino acid
• 1.3 Dietary fibers
• 1.4 Vitamins and minerals
• 1.5 Others
2. Application 
• 2.1 Food and beverages
• 2.2 Pharmaceuticals
• 2.3 Others
3. Geography 
• 3.1 APAC
• 3.2 North America
• 3.3 Europe
• 3.4 Middle East and Africa
• 3.5 South America

1.1 Probiotics and prebiotics-  The probiotics and prebiotics segment is the largest product category in the global functional food ingredients market in 2023. Probiotics, such as Lactobacillus, Bifidobacterium, and Enterococcus, are live microorganisms found in fermented dairy products like yogurt, buttermilk, and Greek yogurt. Prebiotics are non-digestible fibers that nourish probiotic bacteria and promote their growth. The increasing consumer awareness about health benefits of probiotics is driving market growth. For instance, Wildwonder, a new prebiotic + probiotic beverage, was launched in June 2023. This light-carbonated drink, available at Sprouts and online, has five grams of prebiotic fiber, one billion live probiotic organisms, and only six grams of sugar. Probiotics also reduce the risk of diarrhea and colon cancer, while prebiotics offer benefits like calcium and magnesium absorption and improved food quality. Both have significant advantages, making the probiotics and prebiotics segment a key growth area in the functional food ingredients market.

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Research Analysis

The Functional Food Ingredients Market encompasses various processing technologies like High-hydrostatic pressure, Ultrasound-assisted extraction, Microwave-assisted extraction, Pulsed electric field, and Radio-frequency drying, which are used to extract and preserve nutrients and functional compounds from natural sources. These ingredients include Carotenoids such as Beta-carotene, Lutein, and Zeaxanthin, as well as Flavonoids like Quercetin, Kaempferol, Catechins, and Anthocyanidins. Fortified foods have gained popularity due to the rising incidence of Chronic diseases and Micronutrient deficiencies. Technological conditions and Legislative regulations play a significant role in market growth. Supercritical fluids and Probiotic strains are other key components of this market. Middle class consumers and Government fortification programs are major drivers. Minerals, Fiber, Vitamins, and Conjugated linolenic acid are other essential functional food ingredients. International food regulations ensure safety and quality standards are met.

Market Research Overview

The Functional Food Ingredients Market encompasses various bioactive components such as Prebiotics and Probiotics, Carotenoids, Vitamins, Minerals, Fiber, and Flavonoids, among others. These ingredients cater to the growing demand for food and beverages that offer health benefits beyond basic nutrition. Chronic diseases like cardiovascular disease, obesity, Alzheimer's disease, and diabetes are driving market growth. Technological advancements in extraction methods, including high-hydrostatic pressure, ultrasound-assisted extraction, microwave-assisted extraction, pulsed electric field, radio-frequency drying, and supercritical fluids, are enhancing the production of functional food ingredients. Nutrigenomics and legislative regulations are key factors influencing market trends. Probiotic strains, antioxidants, anti-inflammatory, and fiber are popular functional ingredients. The market includes various applications such as fortified food, beverages, dietary supplements, animal feed, and pharmaceuticals. Health-conscious consumers, clean labels, and personalization are key market drivers. Functional food ingredients are used in various food categories, including energy drinks, sports drinks, yogurt, kefir, sauces, soups, gravies, frozen desserts, baked goods, and low-fat or calorie-reduced products. Functional food ingredients are also used as texturizing, binding, and thickening agents. The market is expected to grow due to the increasing prevalence of chronic diseases, micronutrient deficiencies, and the middle class's growing demand for healthier food options. Government fortification programs and international food regulations are also impacting market growth. Probiotic ingredients, plant-based proteins, and microorganisms are emerging trends in the market. The market is also influenced by the increasing popularity of e-commerce platforms and the growing demand for organic food and plant-based products. Functional food ingredients offer various health benefits, including cancer risk reduction, cognitive function improvement, and immune system support. Omega-3 supplements and vitamin D supplements are popular functional ingredients in the pharmaceutical segment. The market is expected to grow due to the increasing focus on personalization and precision medicine, as well as the genetic makeup and lifestyle factors. The animal feed industry is also a significant market for functional food ingredients due to the growing demand for animal health and productivity.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Product
• Probiotics And Prebiotics
• Proteins And Amino Acid
• Dietary Fibers
• Vitamins And Minerals
• Others
• Application
• Food And Beverages
• Pharmaceuticals
• Others
• Geography
• APAC
• North America
• Europe
• Middle East And Africa
• South America

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

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