23 January 2020
Visiongain’s study is intended for anyone requiring commercial analyses for the functional foods market and leading companies. You will find data, trends and predictions.
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Global Market Overview
The new report from business intelligence provider Visiongain offers an updated outlook for the global functional foods market and growing "superfood" trend. Visiongain assesses that the functional foods market will generate revenues of $84.8bn in 2020.
Driving Factors in the Global Market
Rise in geriatric population is expected to boost the demand for functional food.
Increasing age lowers the food intake and weakens the digestion hence functional food would be a better choice for old aged people as a mode of nutrition. For instance, according to the data published by United Nation in 2019, it estimated that globally around 982 million people are of age 60 or above, which comprise around 14% of the global population. The geriatric population (60 Years or above) is growing the rate of about 3% per year. Currently, Europe has the largest ratio of population aged 60 or over (around 25%). Furthermore, it was estimated that the number of older persons in the world is projected to be 1.4 billion in 2030 and 2.1 billion in 2050 and could rise to 3.1 billion in 2100. Change in dietary patterns with increased intake of energy dense foods and lack of physical activity has compelled the consumers to opt of functional foods. Moreover, growing health awareness among the consumers will further boost the growth of this industry.
Rise in disposable income and a greater awareness of functional products and ingredients, growth of the functional foods market in emerging countries is set to outpace that in developed countries.
The growth of the population in China, India, Brazil and other developing countries, as well as an increasing middle class will largely contribute in the development of the health & wellness industry in regional markets, which consequently will trigger for the growth of the functional foods market. The regions of Asia-Pacific and South America offer good opportunities for the manufacturers of functional foods. In order to stay abreast in the market, companies need to innovate and appeal to the most recent consumer trends. "Superfoods" is one of these trends that will gain momentum during the forecast period.
Market Growth Restraining Factors
Supporting evidence-based health claims have become more challenging as regulators seek science behind claim specifications. For example, the FDA has published two guidance papers "Distinguishing Liquid Dietary Supplements from Beverages" and "Considerations Regarding Substances Added to Foods, Including Beverages and Dietary Supplements". Both guidance papers aim to provide clarity on the labelling, packaging, composition, serving, size, recommended daily intake and the directions of use of supplements. The quality of functional foods continues to be of critical importance. For example, China has captured approximately 90% of the Vitamin C market in the US, and Chinese food safety has always been a concern. Moreover, the production areas of vitamins are one of the most polluted areas in China.
A Fast Growth of The Functional Flours Market
A growing demand for functional bakery drives the growth of the functional flours market, which is set to rise at a rate of 8.0% CAGR in the next five to ten years. By some predictions, the global functional flours market will exceed the value of $800bn already in five years. A dynamic and fast-growing functional flours market largely benefits from a growing popularity of the health & wellness trend, as well as an increasing demand for processed foods. Currently, many ingredient suppliers are developing new formulations such as specialty flours, seeded mixes, flours from non-wheat grains, lower salt and sugar formulations and other products that appeal to the latest consumer trends.
Dairy is the largest submarket in the functional foods market
Dairy is the largest submarket in the functional foods market, accounting for a 33.1% share in 2019 According to Visiongain estimations, this segment will be worth $26.07bn in 2019 and it will grow at a rate of 8.4% CAGR in the first half of the forecast period. The segment is largely driven by innovations in yoghurts and new product launches. One of the major advantages of the dairy submarket is that consumers are already aware of the positive effects of dairy for their health. Traditionally, dairy has been the leading segment of the global functional foods market because functional ingredients are easily incorporated in many dairy products. Besides, dairy products allow manufacturers to conceal taste off-notes if those appear after the fortification. The Visiongain forecast shows that in 2025, the submarket of functional dairy will be worth $41.8bn and it will grow to $64.01bn by 2030 with a CAGR of 8.6%.
Functional yoghurts are one of the fastest growing categories within the functional dairy submarket
Functional yoghurts are one of the fastest growing categories within the functional dairy submarket, because they appeal to growing demand for natural, tasty and convenient foods. However, being a good source of protein and calcium, dairy products are poor in iron. This has allowed manufacturers to produce iron-enriched yoghurts in order to help consumers with iron deficiency problems and tap the unmet needs of the market Currently, dairy products have the largest share in the probiotics food market, which is beneficial for the development of the segment. Although US consumers are still adopting these products, the segment is expected to grow at a significant rate during the forecast period. Large-scale acceptance of probiotic yoghurts is expected to drive the market growth. Probiotics are live microorganisms, which confer a health benefit on the host when administered in adequate amounts. To be effective, the microorganisms must be alive and present in high numbers.
Notes for Editors
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Some of the key factors propelling the market include the increasing vitamin deficiencies, growing awareness regarding the health benefits of vitamin supplements, and rise in disposable income in developing countries of the region.