Functional Ingredients Market is estimated to be valued at USD 93.02 Bn in 2025 and is expected to reach USD 145.5 Bn in 2032, exhibiting a compound annual growth rate (CAGR) of 6.6% from 2025 to 2032.
Functional ingredients market is growing on the account of rising prevalence of chronic diseases and micronutrient deficiencies, the growth of the middle class in emerging countries and rising consumer demand for healthier food products. The market growth is also bolstered by a number of technological innovations, such as encapsulation technology. This process enables manufacturers to use a range of functional ingredients in their products while maintaining the quality and safety that customers expect.
|
Current Event |
Description and its Impact |
|
Regulatory Harmonization and Health Claims Evolution |
|
|
Technological Advancements and Innovation Acceleration |
|
Uncover macros and micros vetted on 75+ parameters: Get instant access to report
In terms of product, the probiotics segment is expected to lead the market with largest share in 2025, owing to the growing demand from dietary supplements and food products like yogurt sauerkraut and kefir. The strongest growth driver of probiotics is the rising consumer awareness towards gut health, personalized nutrition and immunity boosting.
For instance, in October 2025, Liscure Biosciences reached a global milestone by getting the world's first approval for a joint health probiotic as a recognized health functional ingredient. This new discovery opens up probiotics to more than just gut health; it also includes musculoskeletal health. This marks the start of a new era for functional ingredients in nutraceuticals, supplements, and fortified foods, as more and more people want personalized health solutions.
In terms of application, the food & beverages segment is expected to dominate the global market with 45% share in 2025 and this is attributed to the growing number of health-conscious consumers worldwide. Functional ingredients are widely used in dairy, bakery, infant nutrition, fortified foods and beverages. Consumers are increasingly demanding for functional everyday foods, instead of supplements alone.
For instance, in June 2025, Nexira demonstrated its newest natural functional ingredients at IFT First 2025, which is of great significance for the growing functional beverage market. Fibergum™ acacia fiber and inavea™ prebiotic acacia & baobab are two important new products that are meant to improve gut health, immunity, and overall health. These clean-label drinks show that more and more people want healthy, plant-based, and functional drinks every day.
To learn more about this report, Download Free Sample
North America is expected to dominate the global functional ingredients market and is expected to continue its dominance over the forecast period. This is attributed to the rising popularity of functional foods and the availability of varieties in restaurants and other food outlets.
For instance, in October 2025, Caldic North America has partnered with Lonza Capsugel® for exclusive distribution of branded nutrition ingredients across the region. The portfolio includes UC-II® Collagen, Super CitriMax®, 7-Keto®, Relora®, and ResistAid®, supporting joint, immune, and metabolic health. The partnership makes Caldic's functional ingredients for supplements, foods, and drinks even better. This was exhibited with new prototypes at SupplySide Global 2025.
Asia Pacific is expected to be the second leading region in the global market over the forecast owing to the booming economies of China, India, and Japan. These countries are characterized by a growing middle-class population that is spending heavily on nutritional supplements and healthy foods. This is projected to offer lucrative opportunities for the manufacturers of these ingredients in the coming years.
For instance, in November 2025, Dow released a line of "innovative beauty solutions" that use functional ingredients to improve skin, hair, and personal care products. The new products use advanced polymers and bio-based materials that are good for the environment, work well, and are good for people's health. Dow's new products have many benefits, which shows that there is a growing demand for eco-friendly, high-performance ingredients in the global beauty and personal care market.
The market for functional ingredients in the U.S. is booming in 2025 considering more people want clean-label foods and drinks that are better for them. People want products that have extra health benefits, like probiotics, fibers, plant proteins, and omega-3s, to help their immune systems, gut health, and overall health. Changes in lifestyle, a focus on preventive health, and new fortified foods and supplements are all driving growth.
For instance, in October 2025, Ashland has chosen Tilley Distribution to be the only U.S. distributor of food and drink ingredients. The partnership includes Ashland's "cellulosic hydrocolloids," such as Aqualon™ CMC, Benecel™ MC/HPMC, and Aerowhip™ HPC, which are often used to improve texture, stability, and mouthfeel. This move makes Ashland a stronger player in providing "functional ingredient solutions" for foods, drinks, and nutraceuticals in the US.
In 2025, China's functional ingredients market is booming as individuals are becoming more health-conscious, cities are getting larger and people want clean-label nutrition. More and more, people want products with probiotics, plant proteins, fibers, and herbal extracts to boost their energy, gut health, and immunity. The government's focus on health and wellness, as well as new ideas in fortified foods and supplements, speeds up market growth even more.
For instance, in December 2025, Natural Field, which is based in Hangzhou, China, released a white paper on Ashwagandha and won several awards at the 2025 Very Food Innovation Conference. Ashwagandha is becoming more popular as a functional ingredient for stress relief, energy, and immunity. It is known as a top adaptogen. These achievements show how China is becoming more important in promoting natural health and functional nutrition.
| Report Coverage | Details | ||
|---|---|---|---|
| Base Year: | 2024 | Market Size in 2025: | USD 93.02 Bn |
| Historical Data for: | 2020 To 2024 | Forecast Period: | 2025 To 2032 |
| Forecast Period 2025 to 2032 CAGR: | 6.6% | 2032 Value Projection: | USD 145.5 Bn |
| Geographies covered: |
|
||
| Segments covered: |
|
||
| Companies covered: |
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 |
||
| Growth Drivers: |
|
||
| Restraints & Challenges: |
|
||
Uncover macros and micros vetted on 75+ parameters: Get instant access to report
The probiotics market continues to grow, and food companies are looking for new ways to incorporate these microorganisms into their products. For example, using functional probiotic ingredients such as lactic acid bacteria (LAB). LAB in fermented foods naturally enrich the gut with healthy microorganisms that promote immune system function, prevent intestinal problems and restrict growth of pathogenic microorganisms. Moreover, LAB also promote the growth of indigenous beneficial microorganisms in the gut.
Increasing cases of chronic diseases, micronutrient deficiencies, growing demand for fortified foods owing to changing lifestyle and growing health awareness among consumers are some of the factors driving the market growth. Furthermore, the growing middle class in emerging economies and growth of the older population is again boosting the market for fortified foods and hence, the functional food ingredients.
The growing emphasis on the use of plant-based food products and rising investments in research & development activities by key market players are fueling the functional ingredients market growth. Moreover, shift in consumer preference towards healthy snacks and drinks is further contributing to the market growth.
A wide range of nutritional and functional food ingredients are helping to address consumer demands for better-for-you foods and drinks that offer health benefits beyond basic nutrition. Functional ingredients are also known as nutraceuticals ingredients, these ingredients can help prevent nutrient deficiencies and promote overall wellbeing.
*Definition: The use of functional ingredients in food and beverages is a growing because it promotes healthy immune and digestive system function. These specialized foods, also known as nutraceuticals, are often more nutritious than their traditional counterparts and may help to reduce the risk of certain diseases.
Share
Share
About Author
Sakshi Suryawanshi is a Research Consultant with 6 years of extensive experience in market research and consulting. She is proficient in market estimation, competitive analysis, and patent analysis. Sakshi excels in identifying market trends and evaluating competitive landscapes to provide actionable insights that drive strategic decision-making. Her expertise helps businesses navigate complex market dynamics and achieve their objectives effectively.
Missing comfort of reading report in your local language? Find your preferred language :
Transform your Strategy with Exclusive Trending Reports :
Frequently Asked Questions
Joining thousands of companies around the world committed to making the Excellent Business Solutions.
View All Our Clients
Schedule a meeting with report Author
