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Functional food ingredients market expected to reach $125.65 billion by 2025

young woman with glasses smiling
2 min read
AUTHOR: Fiona Holland
Woman drinking drink made with functional food ingredients

The international market for functional food ingredients is predicted to grow at a compound annual growth rate of 9.9% from 2020 to 2021, getting to $125.65 billion at a CAGR of 7.8% by 2025, a new report from the Business Research Company has revealed.

Post-pandemic recovery is behind this forecasted growth, with companies now starting to resume their work and adjust to the new normal.

The increasing demand for fortified food and drinks is also said to be behind the growth in the market. More people are reported to be consuming fortified goods due to an increase in consumer’s concern for their health, a rise in consumers’ disposable income, and higher levels of disease.

Functional food ingredients are sold by a mixture of big companies, small enterprises, and partnerships. They are usually added to foods in the manufacturing process. The most common functional food ingredients usually consist of vitamins, minerals, probiotics, prebiotics, dietary fibres, fatty acids, and carotenoids.

The biggest companies operating in the market according to the report are: Cargill, BASF, Archer Daniels Midland, DuPont Nutrition & Biosciences, Arla Foods, Kerry Group, Ajinomoto, DSM, Ingredion Incorporated, Tate & Lyle, Roquette Frères, Nestlé, Fuerst Day Lawson, Ashland, A&B Ingredients, and Royal Cosu.

A growing trend that is noted is how big companies are forming collaborations and partnerships, which is allowing for further developments to be made in functional food ingredients.

Kerry Group’s acquisition of the Spanish biotech organisation Biosearch Life, a producer of Omega-3, probiotics and botanical extracts, is predicted to allow Kerry Group to increase its portfolio of healthy ingredients.

Cargill’s partnership with Renmatix, a company making plant-based ingredients from plant materials is also mentioned. They signed a joint development agreement to help them find new ways to make functional food ingredients using under-used plant materials.

The region with the biggest functional food ingredients market in 2020 was North America, while Europe came in at second place. Other regions analysed in the report include Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, and Africa.


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