The global Health Ingredients market is estimated at USD 100.5 billion in 2022; it is projected to grow at a CAGR of 7.8% to reach USD 146.3 billion by 2027. The food and beverage industry has embraced the use of healthy ingredients on a large scale, driving the market’s growth.
Driver: Rising Prevalence of Chronic Diseases
The global prevalence of chronic diseases is on the rise, posing significant challenges to public health. Factors such as an aging population, changes in lifestyle behaviors, and the expanding middle class contribute to the increasing instances of long-term health conditions. Urbanization and sedentary lifestyles lead to higher obesity rates and the development of diseases like diabetes. Developing countries, with their growing populations, are particularly susceptible to this trend, making it a pressing concern for emerging markets.
According to the CDC’s National Center for Chronic Disease Prevention and Health Promotion (NCCDPHP) in 2022, six out of ten adults in the US are affected by at least one chronic disease. Heart disease, cancer, stroke, chronic obstructive pulmonary disease, and diabetes are among the leading causes of death, accounting for more than two-thirds of all mortalities. These statistics highlight the urgent need for effective strategies to combat chronic illnesses worldwide.
Restraint: Pricing Complexities for New Health Ingredients
The development and commercialization of health ingredients come with intricate challenges related to cost and uncertainty. Various factors, including technological conditions, market demand, and regulatory frameworks, influence the success of product development in the health ingredients market. Considerable investments are required for research and development, especially for strains used in the production of new ingredients like probiotics.
The production of probiotic strains and other ingredients necessitates adherence to international food regulations, employing highly sterilized and technically advanced equipment and processes. The high production costs associated with these complex manufacturing processes result in expensive final products. Moreover, marketing and distribution further contribute to the product’s pricing. While consumers are aware of the health benefits, the elevated prices often limit their purchasing ability, posing a challenge for manufacturers.
Opportunity: Shift towards Plant-Based Health Ingredients
The market for plant-based health ingredients is experiencing rapid growth as consumers shift away from animal proteins and gravitate towards plant-based alternatives. This trend presents a significant opportunity for plant protein ingredients, herbal supplements, and botanicals. Consumer preferences are being influenced by a desire for clean-label products, concerns about sustainability, and the need to avoid allergens. The demand for plant extracts extends beyond vegans to flexitarians, showcasing evolving customer preferences and creating new avenues for growth in the health ingredients market.
Challenge: Adhering to Stringent International Quality Standards and Regulations
The health ingredients industry faces the challenge of complying with various regulatory standards and international quality norms. Organizations such as the National Food Safety and Quality Service (SENASA) in Argentina, the Canadian Food Inspection Agency (CFIA) in Canada, the Food and Drug Administration (FDA), the World Health Organization (WHO), and the Committee on the Environment, Public Health and Food Safety (EU) enforce food safety and quality regulations. These bodies regulate the use of chemicals, raw materials, and ingredients in food processing, directly or indirectly.
Different regional food safety authorities and regulatory bodies have their own guidelines for food labeling and packaging. Manufacturers must adhere to these stringent regional legislations for the production and packaging of food materials and ingredients. The multitude of regulations presents a challenge for new entrants, as high investments in research and development are required, while profit margins may be low.
By addressing the rising prevalence of chronic diseases, navigating pricing complexities, capitalizing on the shift towards plant-based ingredients, and ensuring compliance with international quality standards, the health ingredients industry can foster innovation and sustainable growth in a rapidly evolving market.
In the forecast period, the Asia Pacific (APAC) region is expected to hold the highest market share. With a significant population of millennials actively focused on fitness, the APAC region presents tremendous growth opportunities for health ingredients. This population’s strong inclination towards innovative products and their reliance on dietary supplements to achieve optimal nutrition contribute to the region’s potential.
The key players in the Health Ingredients market include Archer Daniels Midland Company (ADM), Associated British Foods PLC, International Flavors & Fragrances Inc., Kerry Group PLC, DSM, BASF SE, Cargill Incorporated, Ingredion, Arla Foods, Tate & Lyle, Lonza, Royal FrieslandCampina N.V., Glanbia PLC, CHR Hansen Holdings A/S, and Probi. These companies have implemented strategies such as strategic partnerships, expansions, and new product launches to strengthen their presence in different regions and sectors.
