Nutraceutical as a term has been in vogue for over 5 years now. There is no universally accepted definition of the term. It varies from market to market. Nutraceuticals, broadly put, is food or food-extractions which claim to provide health or medicinal benefits. The nutraceuticals industry includes functional food & beverages and vitamin supplements.
Why is the boom happening?
Since the early 1990s, the nutraceuticals industry has been gradually garnering more market share. Medicine practitioners started prescribing vitamin supplements as a way to prevent chronic ailments and promote a healthy dietary lifestyle. Soon, food supplements started being consumed for performance enhancement as well. The boom in the nutraceuticals industry happened along with Great Recession (2008-2010). The repercussions of the recession drove people towards healthy dietary habits because people wanted to remain healthy and avoid spending on treatments. Since then, the nutraceuticals industry trends have been upward.
Consumer preference has experienced a paradigm shift from synthetic ingredients to organic and natural ingredients. Consumers are now rapidly shifting to non-GMO (Genetically modified organisms) alternatives when it comes to food.
According to a report by Transparency Market Research, the global nutraceutical market stood at $177.71B at 2015 and with a CAGR of 7.3%, it is expected to hit a whopping $278.96B by 2021.
USA’s Nutraceuticals Industry
USA’s market share in the nutraceuticals industry is one of the largest. In 2014, North America dominated the market with its market share of 39.6%. Functional foods, functional beverages, and dietary supplements are the predominant types of nutraceuticals available in the US market.
In 2015, USA’s market stood at $64.8B. The CAGR is estimated to be 5.30% till 2024. According to this report by TMR, by 2024, the market is expected to reach $102.6B.
Among these, functional foods generate the highest demand because of high awareness that prevails among the consumers about healthy eating. The demand for this section will continue to remain strong in the upcoming years. But, the most significant leap in terms of demand can be seen in the functional beverages section.
Liquid nutraceuticals (liquid nutritional supplements) had a US market share of 34.8% and is expected to remain on top in terms of growth rate because more and more consumers are opting for liquid nutraceuticals. This is for various reasons that include ease of consumption.
Asia Pacific Nutraceuticals Industry
The Asia Pacific nutraceuticals product market is growing rapidly. According to Mordor Intelligence, Japan had the highest market share (32%) in 2016. The market is expected to grow at a CAGR of 7.5% from 2018-2023. The market stood at $59.55 billion in 2016 and is estimated to reach $89.63 billion by 2021.
Indian nutraceutical market alone is expected to grow at a CAGR of 21% till 2022! Currently, the market stands at around $4B. By 2022, it is estimated to become $10B.
There’s a rising demand for functional food and dietary supplements in the emerging economies of APAC. Sportspeople are now actively endorsing and counting on functional beverages to help them gain an edge and stay healthy. This will also help increase the nutraceuticals market in that region.
Future of Nutraceuticals
As mentioned earlier, the 2021 estimation of the global nutraceutical market is $278.96B. By 2021, USA’s nutraceutical market is estimated to stand at $88.3B. This means, with a 31.65% share, US will continue to be the largest consumer of Functional food and beverages.
According to a report published in 2010 by FICCI and Frost & Sullivan:
- The market is likely to remain in a growth phase driven by emerging nutraceutical markets, such as India, China, and Brazil, with China likely to become the world’s largest nutraceutical market by 2030.
- Customisation and personalization is the need of the hour for nutraceuticals, specifically in developed markets such as the US. However, while complete personalization (based on the genetic profile) is a long way away, companies are looking at new and innovative ingredients and/or delivery mechanism to suit specific target groups.
- The US market is currently focused on diversifying their product offering to gain greater penetration amongst the Gen X and Gen Y population after having almost exhausted the baby boomer population.
Nutraceuticals industry will reach approximately $280B by 2021. One of the challenges though, if you are a fulfillment company or a contract manufacturer or a marketing agency is that it’s very hard to get your hands on a curated list of nutraceutical companies with the contacts of the decision makers.
With PipeCandy, you can now get past the problem very easily. As a part of our effort to map the entire eCommerce and retail landscapes, we’ve aggregated information about both online and offline nutraceutical companies. You can download the list from here.