Functional foods, also called nutraceuticals, support healthy and active lifestyles by providing nutrient supplementation, disease prevention and growth. Consumer demand for all types of nutraceuticals has increased significantly over the past decade and competition within the market segment has increased accordingly.
Manufacturers are constantly reevaluating their functional food offerings to align with shifting consumer demand.
Here, we’ll take a look at successful examples of nutraceuticals, the rise of nutraceuticals overseas and address the future of functional foods.
Nutraceuticals and Functional Foods, Defined
Both terms are used to describe consumer products that are readily available and usually derived from natural sources.
What Are Nutraceuticals?
Nutraceuticals are any substance that is a food or part of a food and provides medical or health benefits, including the prevention and treatment of diseases.
Subcategories of nutraceuticals include:
- Herbal supplements
- Dietary fiber
- Vitamins
- Phytonutrients
- Prebiotics
- Probiotics
- Protein supplements
- And others
There are several nutraceutical definitions and categorizations, largely because the FDA doesn’t regulate the term. The FDA does not regulate nutraceuticals or dietary supplements for consumer use unless the product contains a new dietary ingredient that isn’t already on the market.
What Are Functional Foods?
Functional foods are consumer products with added vitamins, minerals or other supplemental ingredient to make them more nutritious. The most familiar examples are fortified foods, such as juices, grains, cereal, milk and milk alternatives or finished foods.
Nutraceuticals and Functional Foods: Benefits, Concerns and Challenges
There’s substantial evidence this product category has improved health standards globally over the past four decades.
The Benefits
The benefits have been felt at the individual level and in large populations.
Functional foods have many success stories in preventing disease. After Jordanian health officials discovered endemic anemia in children, government-subsidized iron-fortified wheat flour cut anemia rates in half. Since their introduction in the 1980s, functional foods have helped reduce the number of nutrient deficiencies in both developed and developing countries, notably related to vitamin A.
The Concerns and Challenges
The lack of regulation has led to persistent consumer concerns about many nutraceuticals and dietary supplements. Without regulatory analysis, manufacturers and distributors are responsible for putting safe, ethical products in the marketplace. Manufacturers rely on high-quality assurance, storage and formulation standards, while distributors work closely with suppliers to ensure the raw input materials are exactly as claimed.
A related concern is the heterogenous nature of nutraceutical testing. Without standardized industry testing, even lab-reported results can be misleading or inaccurate. These studies form the basis of product claims; poorly conducted tests lead to substandard products.
The Global Nutraceuticals Market’s Steady Rise
For manufacturers, those are challenges worthy of solving. The global nutraceuticals market reached a $291.3 billion valuation in 2022 with a forecasted CAGR of 9.4% through 2030. Global growth is expected to outpace the US’s 7.4% rate of growth over the same period.
The primary growth factor internationally is the steady increase in household income in developing economies such as India, China and Eastern Europe.
Domestic growth is driven primarily by consumers prioritizing their own health regimens to mitigate risk and potentially prevent lifestyle maladies like cardiovascular disease and obesity. North American market growth may be slowing, but it still holds the largest revenue share of any global region at 35.5%.
Trust Your Gut
The fastest-growing product segment is the probiotics category. As much as 26% of total nutraceutical sales were attributable to products marketing probiotics in various forms, including pills, yogurts and drinks. Quality and affordable probiotics and prebiotic ingredients are essential to meeting this steady increase in demand.
What’s Next?
The nutraceutical market remains a bright spot in many manufacturer portfolios. As nutraceutical products and functional foods gain an increased share of the American shopping cart, many are considered inelastic purchases despite price pressure. The success of the market has its risks. As more suppliers enter the market, distributors and manufacturers must increase quality control efforts to ensure a safe product reaches consumers.
Your Trusted Nutraceuticals Partner
Our rigorous sourcing standards and proprietary testing capabilities allow us to add an additional layer of assurance for our customers.
Learn more about our nutraceutical and functional food ingredient catalog and related value-added services. Contact a Tilley representative today to get started!