Functional Ingredients Market by Type (Vitamins, Proteins and Amino Acid, Probiotics), Source (Natural), and Application (Food and Beverage [Dairy Products, Bakery & Confectionery, Energy Drinks], Pharmaceuticals, Animal Nutrition) - Global Forecast to 2030

The Functional Ingredients Market is projected to reach $186.75 billion by 2030, at a CAGR of 7.6% during the forecast period of 2024–2030. The growth of this market is driven by the rising demand for functional ingredients in the food and beverage sector, growing health and wellness trends, increasing demand for healthy and nutrition-rich diets, rising incidences of chronic diseases, and increasing demand for compound feed. However, the stringent government regulations and guidelines and high prices of functional ingredients are expected to hamper the growth of this market to some extent. Moreover, the rising vendor investment in the functional food ingredients and beverage industry is further expected to provide growth opportunities for the stakeholders operating in this market. Additionally, the growing demand for natural, organic, and clean-label ingredients is a major trend in the global functional food ingredients market.

Key Players

The report offers a competitive analysis based on an extensive assessment of the leading players’ product portfolios, geographic presence, and key growth strategies they adopted in the last 3–4 years. Some of the key players operating in the global functional ingredients market are Archer-Daniels-Midland Company (U.S.), Arla Foods amba (Denmark), BASF SE (Germany), Chr. Hansen Holding A/S (Denmark), Cargill, Incorporated (U.S.), International Flavors & Fragrances Inc. (U.S.), Ingredion Incorporated (U.S.), Kerry Group plc (Ireland), Koninklijke DSM N.V. (Netherlands), Glanbia plc. (Ireland), Roquette Frères S.A.(France), and Tate & Lyle Plc (U.K.).

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Rising Demand for Functional Food Ingredients in the Food and Beverage Sector Fuels the Growth of the Global Functional Ingredients Market

Consumers are becoming increasingly concerned about their health and paying more attention to their lifestyles and dietary habits. The global demand for healthy and nutrition-rich diets is rising with the growing world population. According to the Population Reference Bureau (PRB), the world population is expected to reach 9.8 billion by 2050, increasing by 22% from around 8.0 billion in 2022.

In recent years, consumer awareness regarding health, nutrition-rich diets, calorie reduction, and food safety has grown globally, which is expected to transform the food and beverage sector and boost the growth of the fortified food market. Functional food and beverages are highly nutritious and have potential health benefits besides basic nutritional values. These are designed to promote the health of the general population. Nowadays, every other food is processed to make it healthy for increased marketability as per changed consumer demands. The rapid shift from nutritional supplements to transparent ingredients in food has boosted the market growth of functional ingredients.

Furthermore, the need for sports and performance drinks is increasing rapidly as they help enhance performance and endurance and allow athletes to exercise vigorously. Moreover, the rising athlete population and sports players in developing countries are major factors that would propel the market growth during the forecast period. For instance, according to the National Collegiate Athletic Association (NCAA), the number of NCAA athletes is increasing rapidly. In 2021–2022, approximately 520,000 students participated in NCAA championships sports, an increase of more than 25,000 since 2017–2018.

Moreover, consumers increasingly spend on value-added food categories to maintain healthier lifestyles, boosting the sales of fortified foods and beverages. Increasing awareness among people regarding strengthening their immunity to prevent risks of infections has compelled them to maintain healthy lifestyles and adopt proper dietary habits. Thus, all these factors are expected to drive the growth of this market across the globe.

Key Findings in the Functional Ingredients Market Study:

In 2024, the Vitamins Segment to Dominate the Functional Ingredients Market

Based on type, the functional ingredients market is segmented into vitamins, proteins and amino acids, minerals, probiotics, prebiotics, botanical extracts, omega-3 & 6 fatty acids, fibers & specialty carbohydrates, and other functional ingredients. In 2024, the vitamins segment is expected to account for the largest share of the functional ingredients market. The large share of this segment is mainly attributed to the increasing demand for vitamins for fortification of food and beverages, animal feed, healthcare, and personal care products, the growing aging population, and the increasing prevalence of vitamin deficiencies. Moreover, the rising consumer awareness regarding the importance of maintaining a healthy lifestyle and the benefits of incorporating vitamins into their daily routines have also contributed to the growth of this segment. Furthermore, the expansion of the e-commerce sector and the ease of availability of vitamin-based supplements and products are further supporting the growth of this market across the globe.

However, the probiotics segment is projected to register the highest CAGR during the forecast period of 2024–2030 owing to the growing awareness about the health benefits of probiotics beyond digestive health, changing lifestyle and eating habits, and growing use of probiotics in animal feed. Additionally, rising health concerns such as digestive disorders and diarrhea, the growing aging population, and advancements in technology that have led to the development of innovative probiotic products are expected to further support the high growth of this market across the globe during the forecast period.

In 2024, the Naturally-sourced Functional Ingredients Segment to Dominate the Overall Functional Ingredients Market

Based on source, the global functional ingredients market is segmented into natural-sourced functional ingredients and synthetic-sourced functional ingredients. In 2024, the natural-sourced functional ingredients segment is expected to account for the larger share of the global functional ingredients market. The large market share of this segment is attributed to the increased consumer preferences for health-conscious and sustainable products and their concern about possible health risks and side effects associated with artificial food and synthetic chemicals.

 Moreover, due to the rising imposition of stringent regulations and guidelines from regulatory bodies regarding the use of synthetic-sourced functional ingredients, this natural-sourced functional ingredients segment is further slated to register the highest CAGR during the forecast period.

In 2024, the Food Segment to Dominate the Overall Functional Ingredients Market

Based on application, the global functional ingredients market is segmented into food and beverages, pharmaceuticals, animal nutrition, and other applications. In 2024, the food and beverage segment is expected to account for the largest share of the global functional ingredients market. The large market share of this segment is mainly attributed to the growing demand for nutritional and fortifying food products and increasing consumer preferences for foods and beverages with functional ingredients to lower the risk of specific health concerns, such as obesity, weight loss, diabetes, and cardiovascular diseases. Moreover, based on type, the global functional ingredients market for food is further segmented into dairy products, bakery and confectionery, snacks, infant food, and other food applications; and for beverage is into energy drinks, sports drinks, fortified juices, dairy-based beverages, and other beverages.

North America: The Dominating Regional Market for Functional Ingredients

Based on geography, the functional ingredients market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. In 2024, North America is expected to account for the largest share of the global functional ingredients market, followed by Asia-Pacific, Europe, Latin America, and the Middle East & Africa. The large share of this market is primarily attributed to increased awareness of the health benefits of functional ingredients, the well-established food and beverage industry, the presence of a large number of established food and beverage players, growing demand for clean-label foods, and advancements in nutrition and food technology. In addition, the growing trend of personalized nutrition and the rising prevalence of chronic diseases in the region is further expected to drive the demand for functional ingredients in North America during the forecast period.

However, the market in Asia-Pacific is slated to register the highest CAGR during the forecast period of 2024–2030 owing to the rapidly growing population, increasing awareness about the health benefits of functional ingredients, rapidly growing urbanization, and changing dietary preferences towards healthier and functional food products, rising disposable incomes, growing health concerns like diabetes and obesity, and the rising health and wellness trends in the region. Further, the growing demand for compound feed for animal nutrition is expected to support the growth of this market in the region during the forecast period.

Scope of the Report:

Functional Ingredients Market Assessment, by Type

• Vitamins
• Protein and Amino Acids
• Minerals
• Probiotics
• Prebiotics
• Botanical Extracts
• Omega-3 & 6 Fatty Acids
• Fibers & Specialty Carbohydrates
• Other Functional Ingredients

Functional Ingredients Market Assessment, by Source

• Natural-sourced Functional Ingredients
• Synthetic-sourced Functional Ingredients

Functional Ingredients Market Assessment, by Application

• Food and Beverages
• Food
  • Dairy Products
  • Bakery & Confectionery
  • Snacks
  • Infant Food
  • Other Food Applications
• Beverage
  • Energy Drinks
  • Sports Drinks
  • Fortified Juices
  • Dairy-based Beverages
  • Other Beverages
• Pharmaceuticals
• Animal Nutrition
• Other Applications

Functional Ingredients Market Assessment, by Geography

• North America
  • U.S.
  • Canada
• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Rest of Asia-Pacific
• Europe
  • Germany
  • France
  • U.K.
  • Italy
  • Spain
  • Rest of Europe
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Rest of Latin America
• Middle East and Africa

Key Questions Answered in the Report: