by The global functional food market is estimated to be valued at US$191.04 billion in 2022 and is expected to exhibit a CAGR of 6.9% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Functional foods are products that are fortified or enriched with additional nutrients or bioactive substances, offering health benefits beyond basic nutrition. These products provide advantages such as improved digestion, enhanced immune function, and prevention of chronic diseases. With increasing health consciousness and a growing focus on preventive healthcare, the demand for functional foods has been on the rise.
Market Key Trends:
Rising Demand for Probiotic Functional Foods:
Probiotics are beneficial bacteria that improve gut health and boost the immune system. There is a significant rise in consumer demand for probiotic functional foods, such as yogurt and kefir, due to their potential to promote digestive health and improve overall well-being. The growing awareness of the importance of a healthy gut microbiome is driving the market for probiotic functional foods.
The global functional food market is witnessing significant growth due to the increasing awareness and health consciousness among consumers. The demand for functional foods, particularly those fortified with probiotics, is expected to drive market growth in the coming years.
Porter’s Analysis
Threat of New Entrants:
The functional food market is expected to witness a moderate threat of new entrants. While the industry is already saturated with established players, the low barriers to entry and increasing consumer demand for functional food products may attract new entrants. However, existing brands with strong market presence and distribution networks may pose challenges for new entrants.
Bargaining Power of Buyers:
Buyers in the functional food market have moderate bargaining power. While consumers have a wide range of choices due to the availability of various brands and products, the switching costs are relatively low. Additionally, consumers are becoming more health-conscious and are willing to pay premium prices for functional food products, giving them some leverage in negotiations.
Bargaining Power of Suppliers:
Suppliers in the functional food market have relatively high bargaining power. The market heavily relies on raw materials such as fruits, vegetables, proteins, and whole grains, which are sourced from suppliers. The scarcity or increase in prices of these raw materials may affect the profitability of functional food companies. However, large companies with strong supplier relationships and diversified sourcing capabilities may have more negotiating power.
Threat of New Substitutes:
The threat of new substitutes in the functional food market is relatively low. Functional foods offer unique health benefits and cater to specific dietary requirements. Although traditional food products can be considered as substitutes to some extent, the growing awareness of health and wellness among consumers makes functional foods a preferred choice.
Competitive Rivalry:
The competitive rivalry in the functional food market is high. The industry is characterized by intense competition among both established players and new entrants. Key players are constantly investing in research and development to innovate and introduce new functional food products. Brand loyalty, extensive distribution networks, and aggressive marketing strategies further contribute to the competitive environment.
Key Takeaways
The global functional food market is expected to witness high growth, exhibiting a CAGR of 6.9% over the forecast period (2023-2030). This growth can be attributed to increasing consumer awareness of the importance of a healthy lifestyle and the rising demand for functional food products. Factors such as the growing prevalence of chronic diseases and the aging population are also driving the market’s growth.
In terms of regional analysis, North America is expected to be the fastest-growing and dominating region in the functional food market. This can be attributed to the increasing adoption of healthy eating habits, the presence of major market players, and a high disposable income among consumers.
Key players operating in the functional food market include Danone, Glanbia Plc, Hearthside Food Solutions Llc, Mars, Incorporated, Meiji Co., Ltd., Nestlé S.A., Raisio Plc, Royal Frieslandcampina N.V., Sanitarium Health Food Company, and The Kraft Heinz Company. These companies have a significant market share and are constantly launching new products and expanding their distribution networks to gain a competitive edge.
In conclusion, the functional food market is poised for substantial growth in the coming years. Factors such as increasing consumer awareness, the prevalence of chronic diseases, and the focus on healthy lifestyles are driving the demand for functional food products. Key players in the market are continuously innovating and expanding their product portfolios to capitalize on this growing demand.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
