Functional Food Ingredients Market to Grow by USD 53.14 Billion from 2024-2028, Rising Probiotic Demand Boosts Market, Report on How AI Is Driving Market Transformation - Technavio

NEW YORK, Feb. 4, 2025 /PRNewswire/ -- Report with the AI impact on market trends - 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 acid. 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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Functional Food Ingredients Market Scope
Report Coverage	Details
Base year	2023
Historic period	2018 - 2022
Forecast period	2024-2028
Growth momentum & CAGR	Accelerate at a CAGR of 7.38%
Market growth 2024-2028	USD 53.14 billion
Market structure	Fragmented
YoY growth 2022-2023 (%)	6.94
Regional analysis	APAC, North America, Europe, Middle East and Africa, and South America
Performing market contribution	APAC at 37%
Key countries	US, China, India, Germany, and UK
Key companies profiled	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

Market Driver

Functional food ingredients market is witnessing significant growth due to increasing consumer awareness towards 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 the relationship between genes and nutrition in preventing 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 various others are used for extracting bioactive compounds from plants. Carotenoids, minerals, fiber, vitamins, flavonoids, and other antioxidants are popular functional ingredients. Prevalence of chronic diseases and micronutrient deficiencies, especially in the middle class, is driving government fortification programs. Probiotic strains, international food regulations, and legislative regulations are important considerations for probiotic ingredients in functional foods. Proteins, amino acids, and fiber are key ingredients in energy drinks, sports drinks, and dietary supplements. Plant-based proteins, probiotic supplements, and microorganisms are gaining popularity due to health-conscious consumers' preferences. Allergies, clean labels, organic food, and plant-based products are other market trends. Technology plays a crucial role in improving nutritional value, stability, and texture of various food products like sauces, soups, gravies, frozen desserts, and baked goods. Low-fat and fat-free products, calorie content reduction, and personalization are other significant market drivers. The pharmaceutical segment is also utilizing functional food ingredients for cancer risk reduction and cognitive function improvement. 

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 their unpleasant smell and taste limit their consumer appeal. To address this challenge, manufacturers are exploring alternative sources such as algae, krill (zooplankton), and genetically modified (GM) plants. The global demand for omega-3-based products is escalating due to their health benefits in preventing diseases like arrhythmias, thrombosis, high blood pressure, and inflammation. The US Food and Drug Administration (FDA) has approved the consumption of eicosatetraenoic acid and docosahexaenoic acid omega-3 fatty acids derived from these sources. Consequently, the rising consumer preference for omega-3 fatty acids and the identification of alternative sources are anticipated to fuel the growth of the global functional food ingredients market during the forecast period. 

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 Market Challenges

•         Functional food ingredients market is experiencing significant growth due to increasing consumer awareness towards health and wellness. Key challenges include the use of prebiotics and probiotics for gut health and immune system support. Nutrigenomics is a rising trend in functional foods, addressing 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, and supercritical fluids are used for extracting valuable compounds like carotenoids, fiber, minerals, vitamins, flavonoids, and antioxidants. International food regulations and legislative conditions impact the market, with probiotic strains and clean labels being key considerations. Middle class consumers are driving demand for fortified food, functional beverages like energy drinks, proteins, and amino acids in sports drinks, and dietary supplements. The animal feed industry also utilizes functional ingredients for improving nutritional value. Functional food ingredients offer benefits such as cancer risk reduction, cognitive function improvement, and texture and stability improvement in various food applications like sauces, soups, gravies, frozen desserts, baked goods, and low-fat or calorie-reduced products. Personalization and precision medicine are emerging trends, with consumers seeking products tailored to their genetic makeup and lifestyle. Omega-3 and vitamin D supplements are popular choices for health-conscious consumers. Probiotic ingredients, microorganisms, and plant-based proteins are also gaining popularity. E-commerce platforms facilitate easy access to these functional ingredients and products.

•         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 30% to 500% higher than their conventional counterparts. This is primarily due to the increased distribution, storage, and transportation costs, as well as the complex extraction processes involved in producing these ingredients. As a result, the high cost of functional foods may hinder the growth of the global functional food ingredients market during the forecast period.

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Segment Overview 

This functional food ingredients market report extensively covers market segmentation by  

• 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
• Source
• Natural
• Synthetic
• Hybrid Or Blended
• Form
• Powders
• Liquid
• Capsules/Tablets
• Others

1.1 Probiotics and prebiotics-  The probiotics and prebiotics segment dominates the global functional food ingredients market in 2023. Probiotics, live microorganisms like Lactobacillus, Bifidobacterium, and Enterococcus, are commonly found in fermented dairy products such as yogurt, buttermilk, and Greek yogurt. Prebiotics, non-digestible fibers, provide nourishment for probiotic bacteria and promote their growth. The rising demand for probiotics due to their health benefits fuels the growth of this segment. Innovation in functional foods, dietary supplements, and beverages continues, driven by consumer awareness of microorganisms' role in health. For instance, Wildwonder launched Pineapple Paradise, a new organic, vegan, and caffeine-free sparkling prebiotic + probiotic beverage, in June 2023. Prebiotics, present in fruits and vegetables, offer advantages such as reducing cancer risk and enhancing calcium and magnesium absorption. Their textural and gelling properties also improve food quality. The health benefits of consuming prebiotics and probiotics underpin the expansion of the probiotics and prebiotics segment in the global functional food ingredients market.

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Research Analysis

The Functional Food Ingredients Market is witnessing significant growth due to the increasing awareness of chronic diseases and micronutrient deficiencies. Technological advancements in the extraction of functional ingredients, such as High-hydrostatic pressure, Ultrasound-assisted extraction, Microwave-assisted extraction, and Pulsed electric field, are revolutionizing the industry. Supercritical fluids, including carbon dioxide, are also gaining popularity for their ability to extract sensitive compounds like Carotenoids (Beta-carotene, Lutein, Zeaxanthin) and Flavonoids (Quercetin, Kaempferol, Catechins, Anthocyanidins) with minimal degradation. Fortified food products are increasingly being adopted by the middle class as a means of preventing chronic diseases and ensuring adequate nutrient intake. Regulatory bodies, both domestic and international, are implementing legislative regulations to ensure the safety and efficacy of functional food ingredients. Minerals, Fiber, Vitamins, Probiotic strains, Conjugated linolenic acid, and other functional ingredients are in high demand for their health benefits. Government fortification programs are also contributing to the market growth by making functional foods more accessible to the masses.

Market Research Overview

The Functional Food Ingredients market is a dynamic and growing industry, driven by the increasing consumer awareness and demand for healthier food options. Functional foods, also known as nutraceuticals, contain bioactive components that provide health benefits beyond basic nutrition. Prebiotics and probiotics are key functional food ingredients, with prebiotics acting as food for probiotics, promoting gut health and the immune system. Other important ingredients include nutrigenomics, which studies the interaction between food and genes, and various nutrients like carotenoids, minerals, fiber, vitamins, flavonoids, and amino acids. Technological advancements in extraction methods, such as high-hydrostatic pressure, ultrasound-assisted extraction, microwave-assisted extraction, pulsed electric field, radio-frequency drying, and supercritical fluids, enable the efficient production of functional food ingredients. Functional food ingredients are used in various applications, including fortified food, beverages, dietary supplements, animal feed, and pharmaceuticals. Chronic diseases, obesity, Alzheimer's disease, diabetes, and cancer are some of the health conditions addressed by functional food ingredients. The market is influenced by various factors, including legislative regulations, technological conditions, and international food regulations. Health-conscious consumers, clean labels, organic food, plant-based products, and e-commerce platforms are some of the key trends driving the market. Functional food ingredients are used in various food applications, such as sauces, soups, gravies, frozen desserts, baked goods, fat replacers, low-fat products, and fat-free products, to improve calorie content reduction, nutritional value, texture, and stability. Functional food ingredients are also used in energy drinks, sports drinks, and probiotic supplements, as well as in the production of yogurt and kefir. Allergies and personalization are also important considerations in the functional food ingredients market, with an increasing focus on precision medicine and genetic makeup, as well as lifestyle factors. Omega-3 supplements and vitamin D supplements are popular functional food ingredients used for cancer risk reduction, cognitive function improvement, and heart health.

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
• Source
• Natural
• Synthetic
• Hybrid Or Blended
• Form
• Powders
• Liquid
• Capsules/Tablets
• Others

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

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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