by The global Functional Ingredients Market is estimated to be valued at US$76.79 Billion in 2022 and is expected to exhibit a CAGR of 6.6% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Functional ingredients are substances that provide health benefits beyond basic nutrition, offering physiological health benefits and aiding in the prevention and treatment of chronic diseases. These ingredients are commonly used in various applications including food and beverages, dietary supplements, personal care, and pharmaceuticals. With the growing consumer awareness towards health and wellness, there is a rising demand for functional ingredients in the market. Consumers are increasingly looking for products that can provide additional health benefits, such as boosting immunity, improving gut health, and supporting overall well-being.
Market key trends:
The key trend in the functional ingredients market is the growing popularity of plant-based functional ingredients. With the increasing adoption of vegetarian and vegan diets, there is a rising demand for plant-based ingredients that offer similar health benefits as animal-based ingredients. Plant-based functional ingredients provide a sustainable and environmentally friendly alternative, making them highly sought after by consumers. These ingredients are rich in antioxidants, vitamins, minerals, and other bioactive compounds that promote good health. Companies in the functional ingredients market are capitalizing on this trend by developing innovative plant-based products that cater to the evolving consumer preferences for natural and clean label ingredients.
Porter’s Analysis
Threat of new entrants: The functional ingredients market is highly attractive, leading to a moderate threat of new entrants. This is primarily due to the high barriers to entry such as stringent regulatory requirements, high investment costs, and the need for extensive research and development capabilities. However, the market’s growth potential and increasing consumer demand might attract new players to enter the market.
Bargaining power of buyers: The bargaining power of buyers in the functional ingredients market is moderate. Buyers have the ability to switch suppliers easily due to the availability of various alternatives. However, the high quality and effectiveness of functional ingredients make it difficult for buyers to find suitable substitutes. Therefore, buyers may not have significant bargaining power when it comes to negotiating prices.
Bargaining power of suppliers: Suppliers in the functional ingredients market hold significant bargaining power. This is mainly because the market consists of a few large suppliers who dominate the industry. Additionally, suppliers have the advantage of providing specialized and unique ingredients, making it difficult for buyers to switch suppliers easily. As a result, suppliers have the ability to dictate prices and terms of agreements.
Threat of new substitutes: The threat of new substitutes in the functional ingredients market is relatively low. Functional ingredients offer unique functional properties, such as enhanced nutrition, improved taste and texture, and health benefits, which are difficult to replicate. Moreover, the high consumer demand for functional ingredients indicates a limited potential for substitution.
Competitive rivalry: The competitive rivalry in the functional ingredients market is high. The market is dominated by key players such as Archer Daniels Midland Company, Cargill Incorporated, and Koninklijke DSM N.V. These companies are constantly innovating and investing in research and development to maintain their competitive edge. Additionally, the market is highly fragmented, with numerous small and medium-sized players competing for market share.
Key Takeaways
The global functional ingredients market is expected to witness high growth, exhibiting a CAGR of 6.6% over the forecast period of 2023-2030. The increasing consumer awareness regarding health and wellness, coupled with the growing demand for clean label products, is driving the market’s growth. Moreover, the rise in disposable income and changing dietary preferences are also contributing to the market’s expansion.
In terms of regional analysis, North America is expected to be the fastest-growing and dominating region in the functional ingredients market. The region is witnessing a significant demand for functional ingredients due to the increasing health consciousness and the presence of key market players. Additionally, the rising prevalence of chronic diseases and the growing aging population are further fueling the market’s growth in North America.
Key players operating in the functional ingredients market include Archer Daniels Midland Company, Cargill Incorporated, E. I. du Pont de Nemours and Company, Ingredion Incorporated, Koninklijke DSM N.V., Tate & Lyle plc, FMC Corporation, and Omega Protein Corporation. These key players are focusing on product innovation, partnerships, and acquisitions to strengthen their market position and expand their product portfolios. They are also investing in research and development activities to develop functional ingredients with enhanced functionality and nutritional value.
In conclusion, the global functional ingredients market is poised to experience significant growth in the coming years. The increasing consumer demand for healthier and functional food products, coupled with the efforts of key players to develop innovative ingredients, will be the key driving factors for the market’s expansion. The dominance of key players and the high barriers to entry make the market highly competitive. Therefore, companies need to focus on continuous innovation and strategic alliances to maintain their market position.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. With an MBA in E-commerce, she has an expertise in SEO-optimized content that resonates with industry professionals.
