Asia Pacific Functional Food Ingredients Market

Asia Pacific Functional Food Ingredients Market Snapshot (2023 to 2033)

The Asia Pacific functional food ingredients market was valued at US$ 4.2 billion in 2022. By 2023, the valuation is likely to increase to US$ 4.34 billion and is further anticipated to reach a market value of US$ 8.5 billion by 2033, growing at a CAGR of 6.9% from 2023 to 2033.

Functional food ingredients have special abilities to add extra benefits to any food product, in the form of disease prevention or health promotion and are intended to provide benefits in terms of physiological effects and mitigate the risk of chronic diseases in addition to basic nutritional functions. They resemble conventional foods and can be taken as part of a regular diet.

Food manufacturers in the Asia Pacific region are constantly developing food products that include functional ingredients such as omega-3s and probiotics to meet the growing consumer demand for food products with various health benefits. The expansion of manufacturing facilities by providers to further strengthen their market presence in the Asia Pacific functional food ingredients market is one of the upcoming trends observed in the region. The functional food ingredients market is estimated to account for 9.6% of the overall food ingredients market which is inferred to be valued at US$ 43.6 billion in the year 2023.

The market for functional food ingredients is fragmented, and the major producers only possess minor market shares. This is a result of the extensive selection of functional food additives produced by various producers. But there are significant international companies in the market for functional food additives.

Several recent changes have occurred in this market.

• To exploit Renmatix's technology for transforming waste plant matter into functional food ingredients, Cargill and Renmatix have formed a joint development agreement (JDA).
• Encapsulation technology is increasingly being included in the production process of a wide range of products for both niche usage, such as in gourmet meals, and for newborn feeding due to its capacity to improve flavor and scent.
• Ginger Shots, Inc. has introduced four new organic Probiotic Wellness Shots under the Tulua brand. Each health shot contains quality cold-pressed organic juices, special combinations of beneficial nutrients, and a billion CFU of probiotics.

The demand for functional food ingredients in the Asia Pacific region is expected to rise in the coming years as a result of several factors, including increasing rates of nutritional deficiencies and chronic illnesses, the government's new fortification programs, the emergence of middle-class in emerging economies, the aging of the global population, and growing interest in health and wellness.

Strict regulations hurt the expansion of the market for functional food additives despite these promising possibilities. Businesses must compete for health claims by undertaking several clinical research and obtaining official certification, which raises the cost. High investment thus presents a challenge for emerging market players with constrained financial resources.

Asia Pacific Functional Food Ingredients Market Historical Analysis (2018 to 2022) Vs. Forecast Outlook (2023 to 2033)

The demand for functional food ingredients in the Asia Pacific reached a valuation of US$ 3.71 billion in 2018, according to a report from Future Market Insights (FMI). From 2018 to 2022, sales witnessed significant growth in the Asia Pacific functional food ingredients Market, registering a CAGR of 2.6%.

Global consumption of food supplements has rapidly increased over the years due to increased awareness among consumers regarding leading a healthier lifestyle. Minerals, vitamins, hydrocolloids, prebiotics, antioxidants, plant extracts, carotenoids, and amino acids are among the functional food Ingredients found in fortified foods. In developing markets, the health-conscious diet system is expanding rapidly, fuelling demand for food fortification. Differences in nutritional consumption across regions play a significant role in the differences in population health across countries.

Numerous factors, including rising rates of micronutrient deficiencies and chronic diseases, new government fortification programs, the rise of the middle class in emerging economies, the world's aging population, and increased interest in health and wellness, are anticipated to boost sales of fortified foods in the coming years, thereby increasing Asia Pacific functional food ingredients market demand.

What is primarily driving the Global Market for Asia Pacific Functional Food Ingredients Market?

Consumer Focus on Fortified Foods and Microbiome Ingredients

The demand for microbiome components in customized food and beverage products, like probiotics, essential oils, prebiotics, hydrocolloids, as well as postbiotics, is being driven by consumers' growing health consciousness towards convenient, wholesome foods. This feature has prompted producers of food and beverages to look for functional food additives, which has fueled the market's expansion throughout the study period.

The need for nutritious convenience food and rising fortified food consumption, among other driving factors, are expected to cause the APAC market for functional food components to expand over the projected period. Regional growth is being supported by elements including healthcare spending, the use of preventive healthcare, and consumer knowledge of the health benefits of functional foods. The market potential stems from the rising number of health-conscious consumers who are health-conscious in emerging countries throughout the course of the projected period.

Nandini Roy Choudhury

Principal Consultant

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Category-wise Insights

Which Kind of Ingredient is anticipated to Gain Traction During the Forecast Period?

An increase in Demand for Carotenoids Is Going to Drive the Market Growth

In 2022, the carotenoids segment took up 32.8% of the Asia Pacific market share. Carotenoids are naturally occurring pigments found in most plants that act as antioxidants and are found primarily in algae, plants, and photosynthetic bacteria; however, humans and animals must rely on food to obtain these compounds. The product has witnessed an increase in demand from the functional food market as it is extensively being used by manufacturers in the F&B industry.

These are widely used as natural, safe colorants in feed, food, and cosmetics. Being necessary for photosynthesis and plant growth, they are also the main source of vitamin A in the human diet. They lower the risk of a variety of chronic health problems, including heart disease, cancer, and macular degeneration. These aforementioned benefits of carotenoids are likely to create a lucrative market for the product in the forecast period.

Which Application segment of the Market will boost the Growth?

Increased Application of Functional Food Ingredients in Beverages to Boost Product Sales

In 2022, the application of these functional food ingredients in the food and beverage sector acquired 27.2% of the Asia Pacific market share. Minerals, vitamins, and proteins are some of the functional food ingredients that are extensively used in the production of beverages specifically energy drinks. This is because multiple manufacturers in the beverage industry are developing drinks for special purposes such as health and medical benefits like improving immunity, heart health, boost energy to mention a few.

Suppliers are focusing on broadening their offerings in the sports beverage segment by introducing new ingredients that better meet the functional expectations of the consumers and enhance nutritional benefits. In the long run, these strategies adopted by manufacturers in the beverage industry are likely to positively fuel the sales of functional food ingredients.

Region-wise Analysis

What is the Functional Food Ingredients Market Scenario in China?

Rising Cases of Chronic Diseases to Bolster Market Growth

In 2022, the China functional food ingredients market acquired 45.7% of the Asia Pacific market. China dominates the functional food ingredient market in the Asia Pacific region due to the ubiquity of chronic diseases as a result of the hectic lifestyle of the consumers in the country, in addition to increased awareness regarding the benefits of functional food ingredients.

The food consumption patterns in China have shifted significantly as living standards have improved, exposing more consumers to a broader range of consumer products, particularly functional ingredients products. The food industry's demand for emulsifiers has increased because of the popularity of convenience foods, making China the largest market in the Asia Pacific for functional food ingredients products.

The functional food ingredient industry in China is currently focusing on higher investments in research and development programs to introduce new ingredients to meet the diversified demand from consumers. These aforementioned factors are likely to positively impact the market in China and witness sales growth over the forecast period with a 7.4% CAGR.

What will be the Outlook of the Japan Functional Food Ingredients Market?

Japan Functional Food Ingredients Market to Show Growth

In 2022, over 22% of the Asia Pacific market share was accounted by the functional food ingredients market in Japan. In recent years, Japanese manufacturers in the functional food ingredient market have been trying to make their products more nutritious, following the ongoing high-protein trend in the food and beverage industry.

Consumer awareness in the country regarding anti-aging, weight management, and other health issues by consuming naturally-sourced protein is enabling many producers to offer protein-fortified products with health benefits in the market. This trend has been an extensive driver for the growth of functional food ingredients in Japan with a 6.2% CAGR from 2023 to 2033.

Market Competition

The key players in this market include:

• Archer Daniels Midland Company
• BASF SE
• Cargill, Incorporated
• Arla Foods Ingredients Group P/S
• E. I. DuPont De Nemours and Company
• Kerry Group PLC
• Corbion N.V
• Tate & Lyle PLC
• AkzoNobel N.V.
• Jungbunzlauer Suisse AG
• Ingredion Inc.
• Koninklijke DSM N.V.
• Asia Pacific Specialty Ingredients (M) Sdn. Bhd. (GSI)
• Supreem Pharmaceuticals Mysore Pvt. Ltd.
• Bio Actives Japan Corporation
• FENCHEM BIOTEK LTD.

The functional food ingredients market is fragmented, and the key manufacturers hold small shares in the market. This is due to the wide range of functional food ingredients manufactured by separate manufacturers. However, prominent players in the functional food ingredients market have a notable global presence.

Some of the key developments in the Asia Pacific functional food ingredients market are:

• In November 2021, ADM acquired Deerland Probiotics & Enzymes to meet the increasing demand from consumers for functional food ingredients.
• In 2022, ADM, an expert in sustainable nutrition for humans and livestock, and New Culture, a business that produces dairy products without using any animals, have joined together to develop and market alternative dairy products more quickly. The collaboration demonstrates both businesses' steadfast dedication to making food production more sustainable in the future. The collaboration will allow for the joint creation of goods, utilizing New Culture's discoveries in innovative ingredients and dairy alternatives. With the aid of ADM's vast array of product development resources and skills, the businesses will seek to accelerate New Culture's food service and consumer products.
• In 2023, BASF began construction on two additional research and development (R&D) buildings in Shanghai as part of the campus' expansion. The firm has put a total of €280 million into its Innovation Campus Shanghai, boosting its cAsia Pacificity for innovation and better serving its clients in China and Asia since 2012.
• BASF finished an investment in a vitamin A plant extension in Ludwigshafen, Germany, in 2021 to increase vitamin A supplies, and is scheduled to expand its global-scale vitamin A formulation facility for animal nutrition, with a start-up date of mid-2023.
• The manufacturing cAsia Pacificity of BASF's Ludwigshafen feed enzymes facility was increased in January 2022, which will help clients in the animal nutrition sector achieve their expansion goals.

Report Scope

Key Segments Profiled in the Asia Pacific Functional Food Ingredients Market

By Ingredient Type:

• Vitamins
• Minerals
• Prebiotic & Dietary Fibers
• Probiotics
• Carotenoids
• Proteins
• Omega-3 Fatty Acids

By Application:

• Beverages
• Dairy and Dairy-based Products
• Bakery and Confectionary

By Country:

• China
• India
• Japan
• ASEAN
• Australia and New Zealand
• South Korea