Wander through any major grocery store or specialized shop, or browse any online food product site, and you’re likely to encounter a variety of protein powders, energy drinks, power bars, probiotics, vitamin waters, and calcium-fortified beverages aimed at promoting bone health. These items are enriched with nutrients, phytochemicals, botanicals, or dietary supplements, and they are commonly referred to as functional foods within the industry. Functional foods are characterized by their potential positive effects on health that extend beyond basic nutrition; they are designed to do more than simply fulfill daily nutrient needs — they may also contribute to disease risk reduction and overall wellness. Although the U.S. Food and Drug Administration (FDA) is responsible for regulating functional foods, it has yet to establish an official definition.
The FDA acknowledges the widespread use of terms like “functional foods” and “nutraceuticals” in the marketplace, stating that such products are regulated under the Federal Food, Drug, and Cosmetic Act, despite a lack of specific legal definitions. Nevertheless, the market for these foods is expanding rapidly, with many experts predicting that functional foods will experience significant growth in the near future. As American consumers become increasingly health-conscious, they are seeking natural ingredients and nutrient-rich foods and beverages. Companies entering the functional foods arena are adapting to this trend by consistently launching new products.
Kara Nielsen, a food and beverage trend expert, noted in a recent report by Packaged Facts that the rising consumer awareness and interest in medicinal foods are propelling the demand for functional ingredients that are derived from natural sources rather than laboratories. A Technavio report projects that the global functional foods and beverages market will grow steadily, with a compound annual growth rate (CAGR) of nearly 8% from 2017 to 2021, and a forecasted 6.53% CAGR for the U.S. market during the same timeframe. This trend is fueled by an aging population seeking to maintain health, the ever-increasing costs of healthcare, and a heightened consumer interest in the relationship between nutritious eating and well-being.
Functional foods have transitioned from a niche market to a mainstream one, attracting the attention of some of the largest food companies. For instance, Campbell’s CEO Denise Morrison expressed interest in expanding into the rapidly growing sectors of organic and functional foods, highlighted by the company’s acquisition of Pacific Foods for $700 million. Similarly, PepsiCo purchased probiotic beverage maker KeVita last fall and launched its Tropicana Essentials Probiotics line earlier this year, claiming it was the first brand to introduce probiotics to the mainstream juice aisle. Furthermore, General Mills’ venture capital arm led a $6.5 million Series D investment in Farmhouse Culture, a startup specializing in fermented and probiotic foods and beverages.
As research and development progress, major players in the functional food sector are likely to introduce new products. They are continuously exploring potential acquisitions to bolster profits and enhance share prices, with recent partnerships and purchases indicating a focus on agile entrepreneurial startups for the next big innovation. The pioneers of functional foods in aiding digestion and enhancing performance are credited to the Japanese and Russians. The first commercial implementation of a functional food in the U.S. dates back to 1924 when the Morton Salt Company began adding iodine to its products to combat goiter in the Great Lakes region, a practice inspired by the Swiss.
Oatmeal has been instrumental in raising public awareness about the value of functional foods, according to Carol Culhane, president of International Food Focus Ltd. in Toronto. Oats contain beta-glucan, a soluble fiber that has been shown to lower low-density lipoprotein (LDL) cholesterol, commonly referred to as “bad” cholesterol. The FDA approved claims regarding the cholesterol-lowering effects of beta-glucan in 1997, marking a significant milestone in the functional foods movement.
While some initial product launches were successful, not all functional food introductions thrived in the marketplace. For example, Kellogg’s Ensemble line of cholesterol-lowering foods containing psyllium was discontinued within a year due to poor sales attributed to generic packaging and marketing issues. However, successes have increased alongside improved marketing, packaging, and distribution strategies. General Mills debuted its Fiber One cereal in 1985, while Danone introduced its widely popular Activia probiotic yogurt in France in 1987, later expanding it to the U.S. in 2006. Both products remain strong contenders in the market, with Fiber One capitalizing on the high-fiber food trend and Activia successfully overcoming early consumer skepticism regarding the concept of “friendly bacteria.”
Today, consumers can find a variety of functional foods in the U.S. market, with some manufacturers carefully navigating label claims about health benefits to comply with Federal Trade Commission (FTC) regulations. The FTC mandates that health claims must be scientifically substantiated, and functional food products cannot legally claim to cure diseases. Claims on food and beverage labels also require FDA approval, a process that can be both lengthy and costly. Companies must conduct research and safety evaluations of functional food ingredients and petition the FDA for Generally Recognized As Safe (GRAS) status for their intended uses.
Customer acceptance remains a crucial factor for the functional food market’s success. Culhane emphasizes that long-term viability relies on personal experiences that encourage lifestyle changes. For instance, while lycopene, a powerful antioxidant found in tomatoes and other foods, can reduce prostate tumors, its benefits are not immediate for individuals facing prostate issues in their 50s. “They would have to start in their 20s,” she explains. The significant challenge lies in motivating young adults to adopt dietary practices that enhance health.
Furthermore, Culhane warns that not all functional foods deliver optimal benefits when consumed as typically recommended, and serving sizes can significantly affect efficacy. For example, achieving the cholesterol-lowering benefits of soy protein may require consuming a quart of soy milk daily, and approximately three cups of oatmeal are necessary for the same effect from beta-glucan.
Currently, consumers can purchase buttery spreads, like Lipton’s Take Control and Raisio Group’s Benecol, which contain plant stanol and sterol esters aimed at reducing heart disease risk. Additionally, high-fiber breads and baked goods, such as Schwebel’s Roman Meal 100% Whole Wheat and Kellogg’s Kashi Soft-Baked Cookies, are designed to help lower cholesterol levels. Stanols and sterols, which are plant-based compounds found in vegetable oils and cereals, inhibit the absorption of dietary cholesterol, thereby reducing total and LDL cholesterol levels in the bloodstream. These compounds are increasingly being integrated into functional foods.
Looking ahead, other functional food products are in development as researchers extract beta-glucan from mushrooms for immune support, create fiber-rich inulin flour from chicory root, and investigate beneficial nutrients from algae. While algae-derived foods offer health benefits, challenges remain in quantifying these advantages and understanding how harvesting, storage, and food processing methods impact their nutritional value. The emerging field of phycology, the scientific study of algae, presents new opportunities for those interested in innovating and collaborating on functional food ingredient development.
Kristi Crowe-White, Ph.D., an associate nutrition professor and registered dietitian at the University of Alabama, believes that the future of functional foods lies in understanding the chemistry and composition of native or raw foods. “We have a good 20 compounds that are well integrated, but that’s not the end of the line,” she stated. “There are many more we can explore. It’s an exciting time to be involved in this field.” As we embark on this new chapter in functional foods, the inclusion of ingredients like calcium citrate may become increasingly prevalent as consumers seek foods that support their health goals.