Functional Food Ingredients Market Insights, Forecast to 2026

The global functional food ingredients market is estimated to be valued at USD 98.9 billion in 2021. It is projected to reach USD 137.1 billion by 2026, recording a CAGR of 6.8% during the forecast period. The usage of functional food ingredients in the manufacturing of functional food & beverage products is expected to provide nutritive health benefits, prevent/resist chronic diseases, or act as energy boosters. The addition of functional food ingredients aids in the provision of nutritive benefits, over and above the basic nutritive capacities of traditional food products. The rising health awareness among the global population has had a major influence on the demand for functional food ingredients. The global market is witnessing the development of a wide range of applications of functional food ingredients, such as fortifying food & beverage products. The key players in this market indulge in substantial investments in new technology and product development to provide high-quality and cost-effective solutions to customers.

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The North American region dominates the market in 2020. This dominance is driven by the prevalence of chronic diseases due to hectic lifestyles and increasing awareness among consumers regarding the health benefits of functional foods. In addition, the region has the highest prevalence of obesity. The functional food ingredients industry focuses on investing more in research programs with an aim to introduce new ingredients to address the diversified demands from potential customers in the region. The key market players in the North American functional food ingredients industry include Cargill, Incorporated (US), Archer Daniels Midland Company (US), and DuPont (US). These industry players have their R&D centers where they develop a wide range of functional food ingredients for the food & beverage industry. Cargill invested USD 146 million to expand its protein production facility in Nashville, Tennessee, US.

Key players in this market include Cargill, Incorporated (US), BASF SE (Germany), Archer Daniels Midland Company (US), DuPont (US), Arla Foods (Denmark), Kerry Group (Ireland), Ajinomoto Co., Inc. (Japan), Koninklijke DSM N.V. (Netherlands), Ingredion Incorporated (US), and Tate & Lyle PLC (UK). Some of the other players include Chr. Hansen Holding A/S (Denmark), Kemin Industries, Inc. (US), BENEO (Germany), Royal Cosun (Netherland), Roquette Frères (France), Soylent (US), A&B Ingredients (US), Golden Grain Group Limited (China), Sugarlogix (US), and Stratum Nutrition (US).

The global demand for fortified food is expanding at a robust pace. Functional food ingredients such as vitamins, minerals, antioxidants, hydrocolloids, prebiotics, amino acids, plant extracts, and carotenoids are the key ingredients of fortified food. The health-conscious population is rapidly expanding in emerging markets, which will drive the demand for the fortification of food. The nutritional consumption differences across regions contribute greatly to the apparent differences in the health of populations across the countries. Various factors such as increasing instances of chronic diseases and micronutrient deficiencies, growth of the middle class in emerging economies, new government fortification programs, growth of the world’s older population in regions such as Europe, and growing interest in health and wellness, owing to COVID-19, is expected to drive the sales of fortified foods, further driving the demand for functional food ingredients.

The introduction of new technologies such as encapsulation, nanoencapsulation, and bio-encapsulation drives technological innovations in the functional food ingredients industry. Encapsulation technology helps in enhancing the taste of many food products. For instance, omega-3 fatty acids are associated with bad odor. The taste and fragrance of these ingredients are enhanced with the use of encapsulation technology. The recent advancements in liposome technology are being used in the manufacturing of several ingredients such as probiotics and other functional food ingredients, offering numerous health benefits. Thus, this has increased technological innovations for niche applications such as gourmet food and infant.

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A majority of functional food ingredients are sourced naturally. The increasing consumer awareness about the health benefits associated with ingredients sourced from natural sources is driving the natural segment. Functional food ingredients are currently being sourced from both natural and synthetic means. Although the cost of producing synthetic ingredients is much lower than natural ingredients, growing consumer demand for natural ingredients due to growing awareness about the health benefits associated with ingredients sourced from natural sources is driving growth in the natural segment over the synthetic segment. The natural food ingredients market has managed to remain relatively stable despite the economic downturn and is expected to increase in the future. North America and Europe continue to be the mainstay markets for natural functional food ingredients. Plant protein is also gaining an increasing level of importance due to its lower environmental impact by reducing energy consumption, emissions, land use, and water consumption; it also offers better input conversion efficiency.

The global functional food ingredients market is estimated to be valued at USD 98.9 billion in 2021. It is projected to reach USD 137.1 billion by 2026, recording a CAGR of 6.8% during the forecast period. The usage of functional food ingredients in the manufacturing of functional food & beverage products is expected to provide…

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