Nutraceutical Ingredients Market

[617 Pages Report] The global nutraceutical ingredients market size is projected to reach USD 136.1 billion by 2029 from the 2024 valuation of USD 105.2 billion, displaying a promising Compound Annual Growth Rate (CAGR) of 5.3%. Urbanization and fast-paced living changed dietary preferences to convenient, on-the-go snacks and foods. According to the April 2024 article by the Food Institute, the "snackification" trend is getting stronger with more populations moving to urban centers, where commutes have become longer and workloads heavier, demanding quick and easy-to-consume food options to keep up with bussier daily schedules. The preference for smaller, more frequent meals over traditional large meals—roughly 67% of consumers worldwide make impulsive meal choices—further fuels this trend.

Artificial Intelligence (AI) is further revolutionizing the nutraceutical ingredients market by optimizing bioactive compound discovery and production, expediting R&D. For instance, in April 2023, ADM (US) and Brightseed (US) partnered to leverage AI for decoding gut microbiome interactions, using Brightseed's AI platform, Forager, to develop synbiotic products, underscoring AI's role in advancing probiotics and prebiotics for precision health solutions.

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Market Dynamics

Drivers: Growing demand for fortified food due to increased health consciousness among consumers

The awareness of the diet–health relationship among the current consumer has seen an increase in activities like seeking of products that will offer more than the physical offering of the product. Increasingly, fortified and enriched foods with nutraceutical ingredients such as omega-3 fatty acids, antioxidants, and prebiotics now offer targeted health benefits such as heart health, immune enhancement, and improvement of digestive health. The trend is more marked in regions like North America and Europe, where wellness and preventive healthcare are really driven home. To that end, manufacturers are including these ingredients in everything from beverages and snacks to dietary supplements.

In 2022, the company performed a survey within more than 10,000 consumers across 18 countries. The research discovered that immune support remains the top health priority globally and correspondingly showed a great deal of interest in ingredients which included vitamin blends, omega-3 fatty acids and probiotics in beverages, being taken in a science-backed state. Nutritional impact and ingredient quality remain a strong focus of the consumer, who increasingly turns to personalization solutions by age and stage of life.

Product offerings that are being demanded more include weight management, heart health, muscle recovery, energy, endurance, bone health, and beauty support, among others, all in the context of nurturing bodies for long-term health and beauty goals.

Moreover, government initiatives to support health and well-being, combined with innovation in food processing technologies, continue to propel the market. All these factors together encourage the developments of new products in the nutraceutical segment to cater to the changing preferences of health-conscious consumers around the globe. Supplier and manufacturer collaborations of food products with nutraceutical ingredients are going to increase with the increasing market, bringing forward new products in the market, and this will increase the level of competition.

Restraints: Higher costs of fortified products dissuade large-scale usage and adoption

Higher costs are a key barrier to the broadening use of nutraceutical ingredients within fortified products. Such products, enriched in essential vitamins, minerals, or bioactive compounds, entail extra processing and sourcing expenses for the ingredients involved. For that matter, most consumers are particularly in lower economic areas or price-sensitive markets, buyers of such goods cannot afford to purchase them on a continuous basis. It's also difficult for manufacturing firms to increase output and stay affordable. This is due to the complex and costly process involved in sourcing and integrating quality nutraceutical ingredients. The ingredients are normally derived from natural sources, some of which are rather acquired through specialized modes of extraction, and form a big bulk of the production cost.

Moreover, regulatory and quality compliance has associated costs that increase final product prices. It is further limiting their accessibility, in particular in developing regions with high levels of malnutrition and dietary deficiency, by locking premium pricing into the market for fortified products. On the other hand, government subsidies or incentives for fortified foods and beverages could lower cost barriers such as these, yet these have been variably introduced and maintained.

Opportunities: Nutraceuticals as alternatives for pharmaceuticals

Nutraceuticals, regarded as viable alternatives to pharmaceuticals, offer substantial prospects within the nutraceutical ingredients market. The shift is brought about by an increased consumer preference for natural and preventive healthcare remedies as opposed to synthetic drugs. Vitamins, minerals, herbal extracts, and probiotics are all considered nutraceuticals. These are perceived to be safer, with fewer side effects; this perception increases their attractiveness.

With the increased cases of chronic diseases and an aging population globally, the demand for health-promoting products is surging. For instance, the World Health Organization approximates that by the year 2030, one in every six people in the world will be 60 years or older. As such, consumers are using nutraceuticals in the management of certain ailments like cardiovascular diseases, diabetes, and gastrointestinal problems. This has further pushed huge investments in R&D for innovative ingredients like plant-based compounds and bioactive peptides, thus fueling further nutraceutical ingredients market growth.

Besides, there has been a regulatory support and acknowledgment related to health benefits derived from nutraceuticals. From the product viewpoint, the regulatory bodies like FDA and EFSA have so far been successful in setting up guidelines related to health claims, motivating more companies to develop and market nutraceutical products further. In these, the role of technological development in the extraction and formulation processes has also been quite instrumental. Methods such as microencapsulation and nanotechnology increase the bioavailability and effectiveness of nutraceutical ingredients to make them competitive with pharmaceuticals.

Challenges: Combating counterfeiting and adulteration in the nutraceutical industry

Fraud and counterfeiting are very serious issues for nutraceuticals and affect market integrity and consumer confidence. Nutraceuticals have enjoyed heightened interest of late due to added health claims associated with their use, but without the tight regulative controls in force for pharmaceuticals. The lack of regulation makes the products highly prone to adulteration, counterfeiting, and diversion through complex global supply chains.

Adulteration normally involves substitution or dilution of active ingredients with a view to deceiving the customer about a product's efficacy. Several studies have found worrying levels of mislabeling, including cases in which botanicals contained cheaper substitutes or undisclosed additives, thus compromising safety and effectiveness. For instance, according to an article by Food Fraud Advisors published in 2020, a survey in the USA found that 53% of raw botanical plant parts and powders contained plant material that did not match the label. The same article noted reports of cranberry extracts adulterated with grape seed extracts and other supplements spiked with undisclosed pharmaceuticals like steroids or stimulants.

Counterfeiting aggravates the problem by creating counterfeit products that look like the originals, typically containing inferior or no active ingredients at all. Such products not only dupe consumers but also erode the goodwill and profit of genuine businesses. With growing demand for supplements that are health-enhancing, comes the challenge that originates from guaranteeing product authenticity in order to maintain customer confidence in the industry. Controls through stricter regulation and more sophisticated anti-counterfeit technologies are necessary to protect the nutraceutical marketplace from such wide-ranging and damaging fraud.

Market Ecosystem

Proteins, By Type, Accounted for the Highest Nutraceutical Ingredients Market Share 

Proteins are important for human health in that they provide for muscle-building purposes, repair of tissues, the production of enzymes, and in the immune system. With such a high nutritional value, they are incorporated into all kinds of products: food and beverages, dietary supplements, or animal feed. According to an article by Glanbia PLC, Ireland, in December 2021, soy and dairy headed global fortification volumes. This is because they are cost-effective and available, making them nutritionally complete. From sports nutrition to infant formulas, versatility underpins soy and dairy's market leadership. Furthermore, plant-based proteins such as pea and wheat further pursue the demand for non-GMO and allergen-free options.

Consumer trends continue to amplify the demand for protein-enriched products. Flexitarianism and preference towards plant-based alternatives in North America and Europe increases the demand for plant proteins within mainstream markets. Such proteins easily attract the attention of health-conscious consumers who are after sustainability, ethics, and diversity in diet. They also find a niche in specialized nutrition products like sports nutrition and baby formulas, where proteins from dairy have a good value attached, since they are fast in absorption and build up muscularly. This segment is further supported by developments in protein fortification technologies that help manufacturers cater to different consumer needs for functional foods and customized nutrition solutions.

Dry, By Form, Accounted for the Highest Nutraceutical Ingredients Market Share And is the Fastest-Growing Market

Compared with liquids, dry forms have more significant advantages in stability and shelf-life. This stability is particularly relevant to the preservation of potency and efficacy of certain sensitive bioactive ingredients, including vitamins, minerals, and botanical extracts commonly used in nutraceutical products. Moreover, dry ingredients are also convenient to manipulate, transport, and store; hence, there are unlikely to raise any logistical complexities or costs along a supply chain. Manufacturers looking to maximise operational efficiency and reduce waste will find them especially appealing because of this.

Furthermore, dry ingredients segment finds broad applicability in a number of formats, from capsules to tablets and powdered beverages, thereby meeting these diverse ranges of consumers' preferences and consumption habits. Also, the dry segment easily caters to the growing consumer preference towards convenience and ease of use in dietary supplements and functional foods. For instance, powders and dry granules can be mixed into beverages, baked goods, and other food products without altering the texture or taste thereof to any large degree, thereby maintaining consumer acceptance.

Asia Pacific is the Fastest-Growing Market for Nutraceutical Ingredients Among the Regions

Growing health consciousness and higher disposable incomes in countries like China, India, and Japan have raised demand for functional foods and dietary supplements. Additionally, changing lifestyle due to rapid urbanization is promoting preventive measures in healthcare, which in turn increases demand for the nutraceutical ingredients market.

The growing cost of a nutritious diet exacerbates the malnutrition problem, according to an FAO article titled "Asia and the Pacific Regional Overview of Food Security and Nutrition 2023 - Statistics and Trends." According to data from the UN and FAO, the average purchasing power parity (PPP) increase in the cost of a healthy diet in the region was 5.3%, meaning that 232.8 million people could not afford it. The highest rate of undernourishment in the Asia Pacific region is found in Southern Asia, where 313.6 million people, or over 809 million people, experience moderate to severe food insecurity. This region accounts for 85 percent of all undernourished people in the region.

Top Nutraceutical Ingredients Companies

The nutraceutical ingredients manufacturers in this market include Cargill, Incorporated (US), ADM (US), International Flavors & Fragrances Inc. (US), BASF SE (Germany), Arla Foods amba (Denmark), Associated British Foods plc (UK), dsm-firmenich (Switzerland), Ingredion (US), Tate & Lyle (UK), Ajinomoto Co., Inc. (Japan), and Chr. Hansen A/S (Denmark).

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Scope of the Report

This research report categorizes the nutraceutical ingredients market, based on type, application, form, function (qualitative), and region.

Target Audience

• Nutraceutical ingredients Manufacturers
• Food, Beverages, Dietary Supplement, Food for Special Medical Purposes, and Animal Nutrition Manufacturers
• Government and regulatory bodies involved in policy-making and regulation related to nutraceuticals, functional/fortified food or feed, and dietary supplements

Report Scope:

By Function (Qualitative)

• Additional Supplements
  • Nutrition
    • Cognitive Health
  • Weight Management
  • Skin Health
• Medicinal Supplements
  • Gut Health
  • Heart Health
  • Bone Health
  • Immunity
  • Eye Health
  • Others
• Sports Nutrition

By Type

• Proteins
• Amino Acids
  • Branched Chain Amino Acids
  • Lysine
  • Methionine
  • Threonine
  • Tryptophan
  • Other Amino Acid Types
• Fibers & Specialty Carbohydrates
• Probiotics
• Phytochemicals & Plant Extracts
• Prebiotics
• Functional Fats & Oils
  • Conjugated Linoleic Acid
  • Medium Chain Triglycerides
  • Other Functional Fats & Oils
• Vitamins
  • Vitamin A
  • Vitamin B
  • Vitamin C
  • Vitamin D
  • Vitamin E
  • Vitamin K
• Minerals
• Carotenoids
  • Lutein
  • Astaxanthin
  • Zeaxanthin
  • B-Carotene
  • Lycopene
  • Other Carotenoid Types
• Other Types

By Application

• Food
  • Bakery & Snacks
  • Confectionery
  • Dairy
  • Meat & Meat Products
  • Baby Food
  • Other Food Products
• Beverages
  • Energy Drinks
  • Juices
  • Health Drinks
• Animal Nutrition
• Dietary Supplements
• Foods For Special Medical Purposes (FSMP)

By Form

• Dry
• Liquid

By Region

• North America
• Europe
• Asia-Pacific
• South America
• Rest of the World (RoW)

Recent Developments

• In June 2024, Ingredion (US) and Univar Solutions Inc. (US) expanded their long-term partnership to distribute Ingredion's functional food and beverage ingredients in Germany, Italy, and Switzerland. This collaboration, focusing on starches, plant-based proteins, and stevia sweeteners, aims to meet the increasing demand for healthier, sustainable, and flavor-rich products. The partnership leverages Univar Solutions Inc.’s extensive commercial reach and Ingredion's innovative ingredient portfolio to enhance product performance and market responsiveness. This expansion into key European markets helps Ingredion strengthen its presence in the European nutraceutical ingredients market.
• In December 2023, ADM (US announced an agreement to acquire UK-based FDL Ltd, a leading company in premium flavor and functional ingredient systems, to enhance its global flavors and functional ingredients capabilities. FDL Ltd, with projected 2023 sales of USD 120 million and a strong presence in the European food service segment, operates three production facilities and two innovation centers in the UK. This acquisition adds FDL Ltd's extensive innovation expertise and diverse portfolio of functional ingredients (such as amino acids) and proprietary flavor formulations to ADM's offerings.
• In October 2023, Arla Foods amba (Denmark) invested to significantly upgrade its Porteña facility in Argentina, to double its whey permeate powder capacity and enable the production of infant formula-grade proteins. This expansion includes a new drying tower and enhanced sanitary measures, aligning with global demand, especially in Asia and Latin America. Dairy technology provider RELCO will construct the new tower, set to be operational by 2026. The expansion supports Arla Foods amba's growth in the nutraceutical ingredients market by increasing the supply of high-quality, specialized ingredients for food and beverage applications.

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