Nutraceutical ingredients are derived from animals, plants, microbial, and synthetic sources, which add nutritional and functional benefits to food, beverages, dietary supplements, animal nutrition, and Food for Special Medical Purposes (FSMP) products. Increased demand for fortified foods in view of improved awareness about better dietary choices, an aging population, and growing chronic diseases has resulted in manufacturers investing in the production of end products, which contribute to the nutritional health of consumers.
The nutraceutical ingredients market is projected to reach USD 136,130.8 million by 2029, growing at a CAGR of 5.3% in terms of value. Increasing focus on addressing malnutrition and undernutrition in developing countries is expected to fuel the growth of the nutraceutical ingredients market during the forecast period. Growing government and private sector programs to raise public awareness of the advantages of nutraceutical ingredients are critical drivers of the increase in product demand. Market growth is restricted because of the higher costs of fortified products and regulatory compliance with nutraceutical ingredients.
Escalating consumer awareness regarding health and wellness has significantly bolstered the demand for the nutraceutical ingredients market. The prevalence of lifestyle disorders, such as obesity, diabetes, and cardiovascular issues, has propelled individuals to prioritize healthier dietary choices. As people become increasingly conscious of the link between diet and health outcomes, a growing inclination is toward functional and fortified foods that offer specific health benefits. For instance, according to Kerry Group plc’s (Ireland) 2022 survey of over 10,000 consumers across 18 countries, immune, gut, and heart health remain significant concerns for functional beverage consumers. The survey highlights a global interest in beverages that support immune function, with consumers in both developed (like the US and UK) and developing markets (such as Brazil, South Africa, the Philippines, and India) prioritizing science-backed ingredients, such as vitamin blends, omega-3 fatty acids, and probiotics. This indicates a strong demand for nutraceutical ingredients that offer specific health benefits. Consumers also show a growing interest in beverages addressing beauty and sports performance needs, reflecting a shift toward holistic wellness solutions tailored to different age groups and life stages. The findings underscore a trend toward personalized nutrition to enhance inner and outer well-being, reinforcing the market’s appetite for functional and fortified beverages rich in targeted nutritional benefits.
Additionally, the ban on Antibiotic Growth Promoters (AGPS) due to adverse health effects on animals and humans is fueling the demand for nutraceutical ingredients, such as probiotics for animals. It is expected to present growth opportunities to existing and new market entrants. The rapid economic growth in countries such as China, India, Australia, and New Zealand has led to a significant increase in the disposable incomes of livestock owners. This, in turn, is fueling the demand for nutraceutical ingredients-based food, making Asia Pacific the fastest-growing region in the world.
The widespread availability of information through various media channels, including the Internet and social media platforms, has empowered consumers to make informed decisions about their dietary habits. Scientific research highlighting the role of certain nutrients and bioactive compounds in preventing diseases and promoting overall well-being has further fueled this trend.
Changing demographics, such as an aging population and the rise of the middle class in emerging economies, have contributed to the expansion of the functional food and nutraceutical market. According to the World Health Organization (WHO), by 2030, one-sixth of the global population will be 60 or older, rising from 1 billion in 2020 to 1.40 billion. By 2050, this demographic will double to 2.10 billion, with the number of people aged 80 or older tripling to 426 million during the same period. The paradigm shift toward holistic health practices has driven the consumption of functional foods beyond mere sustenance. Consumers increasingly seek products that offer comprehensive health benefits, extending to both internal well-being and external appearance. In addition, there is a rising interest in supplements that enhance cognitive functions, such as memory, alertness, and focus. This trend is supported by an aging population and increasing awareness of mental health among younger demographics. Products targeting gut health and immune support continue to be in high demand. Consumers across all demographics are increasingly focused on supplements that promote overall wellness and digestive health. In particular, the emerging trend of “beauty from within” has catalyzed the growth of the functional food market, with individuals recognizing the intimate connection between diet and physical aesthetics.
Nutraceutical ingredients are bioactive compounds that provide health benefits beyond basic nutrition. They are used in dietary supplements, fortified/functional foods, and beverages to enhance health, prevent chronic diseases, and support overall wellness. This study also considers animal nutrition applications in the nutraceutical ingredients market. The nutraceutical ingredients market is driven by several key factors. Increasing awareness about health and wellness is leading consumers to seek preventive healthcare options. The current trend toward personalized nutrition drives innovation in the nutraceutical ingredients market. Companies invest in research and development to create new products and technologies to deliver personalized health solutions. Consumers increasingly favor natural, organic, and clean-label products, driving the market demand for plant-based proteins, plant extracts, and other naturally derived nutraceutical ingredients. These factors collectively contribute to the robust growth and dynamism of the nutraceutical ingredients market.
DEVELOPMENTS IN RETAIL INDUSTRY
The retail food industry has grown significantly globally over the past few years. The growth in the Asian market is attributed to foreign direct investment, domestic conglomerates, and government investments. According to the India Brand Equity Foundation (IBEF), the Indian retail industry is one of the fastest growing in the world. It states that the Indian retail market is expected to reach USD 1.10 trillion by 2027 and USD 2 trillion by 2032. The relationship between the retail, food processing, and logistics sectors has witnessed significant growth, facilitating the easy availability of a wide range of products to rural towns.
The development of retail channels in supermarkets, hypermarkets, and convenience stores has encouraged the growth of the nutraceutical ingredients market. These large food chains are the primary outlets for fortified/functional food products due to increased on-the-go consumption. With this, supermarkets can also capture their share in the nutraceutical ingredients market. This trend ist projected to drive the growth of the nutraceutical ingredients market.
The nutraceutical ingredients market is experiencing strong growth due to increasing consumer awareness and demand for health and wellness products worldwide. Key industry trends show a shift towards natural and plant-based ingredients driven by consumer preferences for clean-label products and sustainable sourcing practices. This trend is especially noticeable in developed markets, such as North America and Europe, where consumers prioritize products that are perceived to offer health benefits without synthetic additives. Manufacturers are responding by investing in research and development to create new formulations using botanical extracts, vitamins, and minerals that cater to these preferences.
The growing demand for plant-based and clean-label products is a significant trend in the nutraceutical ingredients market. The World Health Organization (WHO) reported in 2021 that plant-based diets can help prevent and treat various non-communicable diseases, including heart disease, diabetes, and certain cancers. This has led to increased consumer interest in plant-derived nutraceutical ingredients such as phytochemicals, omega-3 fatty acids from algae, and plant proteins. For instance, the Plant-Based Foods Association noted that the US retail sales of plant-based foods grew 27% in 2020, reaching USD 7 billion.
The nutraceutical ingredients market in India is expected to experience rapid growth, with projections indicating a substantial increase in valuation to USD 18 billion by 2025. This growth is driven by heightened consumer awareness of health and wellness, particularly due to the impact of the COVID-19 pandemic, which has emphasized the importance of preventive healthcare measures. According to data from the Ministry of Food Processing Industries (MOFPI), it is anticipated that the Indian nutraceutical market will capture at least a 3.5% share of the global nutraceutical market by 2023, reflecting significant expansion opportunities within the sector. This growth trajectory highlights India’s emerging role as a key player in the global nutraceutical industry, boosted by increasing demand for dietary supplements, functional foods, and fortified beverages to enhance overall health and well-being.
The need for enhanced efficacy, bioavailability, and consumer demand for innovative health solutions drives technological evolution in the nutraceutical sector. For example, microencapsulation technology is revolutionizing the industry by improving active ingredient stability and controlled release. This technology protects sensitive nutrients, such as probiotics and omega-3 fatty acids, ensuring they remain effective until consumed. As a result, products become more potent and reliable, meeting the growing consumer expectation for high- quality, health-enhancing supplements. Advances like this illustrate how technology is essential for addressing challenges and advancing the capabilities of nutraceutical products.
