The global functional food ingredients market size 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. Functional food ingredients deliver additional or enhanced benefits over and above their basic nutritional value. Some functional foods are generated around a particular functional ingredient, such as probiotics, prebiotics, or plant stanols and sterols. Other functional foods or drinks can be foods fortified with a nutrient that would not usually be present to any great extent.
Key players in this market include Cargill, Incorporated (US), BASF SE (Germany), Archer Daniels Midland Company (US), DuPont (US), and Arla Foods (Denmark).
Probiotics dominated the market in 2020. Probiotics provide numerous health benefits beyond providing basic nutritional value. In recent times, there has been increased interest in the use of probiotics in food applications. The selection of new probiotic strains and the development of new applications have gained much importance. The use of probiotics has been known to provide many health benefits to humans. They are intended to assist the body’s naturally occurring gut microbiota. Some of them are used to prevent diarrhea caused by antibiotics or as part of the treatment of antibiotic-related dysbiosis. Antigenotoxicity, antimutagenicity, and anticarcinogenicity are important potential functional properties of probiotics. According to the Department of Medical Nutrition, Karolinska Institute (Sweden), the consumption of fermented dairy products is associated with a lower prevalence of colon cancer, which suggests that probiotics can decrease the risk of cancer by inhibition of carcinogens and procarcinogens, inhibition of bacteria capable of converting procarcinogens to carcinogens.
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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.
North American consumers are becoming increasingly health-conscious and have started to pay close attention to the labels of food products. This has led to a heightened awareness toward the food ingredients that they consume; these factors have been fueling the market growth for functional food ingredients. The North American region holds potential for the consumption of functional food ingredients and is expected to play an important role in the global market. 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. According to CRN 2019 data, over three-quarters of all US adults take dietary supplements; 58% take multivitamins; 31%, vitamin D; 28%, vitamin C; 21%, protein; 20%, calcium; 20%, B complex; 16%, omega-3s; 15%, green tea; 14%, magnesium; 13%, probiotics; 13%, iron; 12%, turmeric; and 12%, vitamin E. 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.