The global functional foods market size is projected to reach USD 275.77 billion by 2025, according to a new report by Grand View Research, Inc. It is anticipated to expand at a CAGR of 7.9% during the forecast period. Increasing demand for nutritional and fortifying food additives is one of the major growth drivers. Functional ingredients such as probiotics and omega-3 fatty acids are extensively consumed through yogurt and fish oils to reduce the instances and risks associated with cardiovascular diseases while improving the quality of intestinal microflora. The increasing trend of consuming these products is expected to sustain throughout the forecast period, thereby favoring market growth.
Another important factor augmenting the demand is the rising consumer awareness regarding gut health. This is in reaction to reported cases of death owing to intestinal inflammation among other bowel disorders. Consumption of probiotics helps fight bad bacteria in such cases while aiding immunity in humans, thereby enhancing the gut health. Among the various products available in the market, probiotic yogurts are the most widely consumed products with proven digestive health claims. However, the functional food industry also has its share of challenges. Among various challenges, issues associated with product availability coupled with claims regarding insufficient nutrients derived from various functional food types has been hindering growth of the functional foods market.
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Asia Pacific emerged as the largest market in 2018 owing to a considerable rise in disposable income of consumers. The industry is also strengthened by the support offered by government bodies in various countries in this region. In this regard, to combat concerns associated with malnutrition, various government bodies have been increasingly focusing on food fortification. This development has also been influencing consumer behavior, thereby driving the regional demand for functional food products.
Further key findings from the report suggest:
- In terms of ingredient, vitamins emerged as the largest segment in 2018, registering a revenue of USD 36.16 billion. The segment is expected to expand at a CAGR of 7.7% over the forecast period
- In terms of product, soy is expected to register the fastest CAGR over the forecast period. Growing popularity of dairy products such as milk drinks, spreads, and yogurts across the globe has contributed significantly to the growth of this segment
- In terms of application, cardio health emerged as the largest segment in 2018 and is expected to maintain its pole position over the forecast period. High prevalence of cardiovascular diseases and reported cases of deaths pertaining to the same have increased the application of functional food products in this segment
- Asia Pacific is expected to witness the fastest growth over the forecast period. Led by countries such as China, India, and Japan, the functional foods market is driven by various government initiatives to promote healthy lifestyle
- The market represents a highly competitive landscape with a sizable number of players sharing the market space. The key players have been focusing on global expansion while strengthening their positon in domestic markets
- The key market participants include BASF SE; Cargill; General Mills Inc.; Coca-Cola Co.; Standard Functional Foods Group Inc.; GFR Pharma; and KFSU among others.