Take a walk through any large grocery store or specialty shop, or visit an online food product site, and you will likely find a diverse selection of protein powders, energy drinks, power bars, probiotics, vitamin waters, and calcium-fortified beverages designed to support bone health. These items are enhanced with nutrients, phytochemicals, botanicals, or dietary supplements, earning them the label of functional foods within the industry. Functional foods are characterized by their potential to positively impact health beyond basic nutrition, aiming to do more than merely fulfill daily nutrient needs. They can 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 provide an official definition. The agency asserts, “Terms like ‘functional foods’ or ‘nutraceuticals’ are commonly used in the market. These foods fall under FDA regulation as per the authority of the Federal Food, Drug, and Cosmetic Act, even though they lack a precise legal definition.” Nonetheless, the demand for functional foods is on the rise, with experts predicting significant growth in this sector. As American consumers become increasingly health-conscious, they seek natural ingredients and nutrient-rich foods and beverages. Companies entering the functional foods market are responding to this trend by consistently launching new products.
Kara Nielsen, a food and beverage trends expert, noted in a recent Packaged Facts report that, “Due to increasing consumer awareness and interest in medicinal foods, they are gaining traction in the natural food and beverage sector, where functional ingredients derived from real-world sources (rather than labs) are in high demand.” According to a report from Technavio, the global functional foods and beverages market is projected to grow steadily, with a compound annual growth rate of nearly 8% from 2017 to 2021. For the same timeframe, analysts predict a 6.53% CAGR for the U.S. market. This trend is fueled by an aging population concerned about health, escalating medical costs, and heightened consumer interest in the link between healthier eating and overall well-being.
Functional foods have moved beyond a niche market, with major food companies entering the arena. Campbell’s CEO Denise Morrison highlighted the company’s interest in expanding into faster-growing areas such as organic and functional foods when it acquired Pacific Foods for $700 million earlier this year. PepsiCo purchased probiotic beverage maker KeVita last fall and launched its Tropicana Essentials Probiotics line earlier this year, marking it as the first brand to introduce probiotics to the mainstream juice aisle. Additionally, General Mills’ venture capital division led a $6.5 million Series D investment round in March to support Farmhouse Culture, a startup focused on fermented and probiotic foods and beverages.
As research and development progresses, major players in the functional foods space are expected to unveil new products. They are actively scouting for potential acquisitions to enhance profits and share prices, as recent partnerships and purchases suggest they are looking to agile startups for the next significant innovation. The Japanese and Russians have historically led the development and application of functional foods to improve digestion and performance. The first commercial functional food in the U.S. may have been when Morton Salt Company began adding iodine to its products in 1924 at the government’s request, addressing a regional iodine deficiency in the Great Lakes area.
Oatmeal significantly raised public awareness about the potential benefits of functional foods, according to Carol Culhane, president of International Food Focus Ltd. in Toronto. Oats contain beta-glucan, the active component in soluble fiber, known for its ability to lower low-density lipoprotein (LDL) cholesterol. As awareness grew, people began to pay closer attention to the research surrounding functional foods. “It took numerous clinical trials to validate the data,” she told Food Dive. In 1997, the FDA approved claims that beta-glucan could reduce serum cholesterol levels, marking a pivotal moment for functional foods.
While there have been successful product launches, not every functional food has thrived in the marketplace. For instance, in the late 1990s, Kellogg’s Ensemble line of cholesterol-lowering products, which contained “natural soluble fiber” from psyllium wheat husk, was discontinued within a year due to poor sales attributed to packaging and marketing issues. However, the success of functional foods grew as marketing, packaging, and distribution improved. General Mills introduced its Fiber One cereal in 1985, and Danone launched Activia probiotic yogurt in France in 1987, which made its way to the U.S. in 2006. Both products remain popular today, with Fiber One capitalizing on the high-fiber trend and Activia overcoming initial consumer skepticism regarding “friendly bacteria.”
Today, an extensive variety of functional foods are available in the U.S. market, with some manufacturers carefully navigating health and wellness label claims to comply with Federal Trade Commission regulations. The FTC mandates that health claims must be substantiated by scientific evidence, and functional food products cannot legally claim to cure diseases. Additionally, health claims on food or beverage labels must undergo extensive scrutiny by the FDA, a process that can be both time-consuming and costly. Companies must conduct thorough research and safety evaluations of functional food ingredients and petition the FDA for Generally Recognized as Safe (GRAS) status for intended uses.
Consumer acceptance remains a critical factor for the success of functional foods. Culhane emphasized that long-term success relies on personal experiences that motivate lifestyle changes. While lycopene, a potent antioxidant found in tomatoes and watermelon, “can definitely reduce prostate tumors,” she noted that it would not provide immediate benefits for someone experiencing prostate issues in their 50s. “They would need to start in their 20s,” she explained. “The challenge is to encourage young adults to consider how their diet can enhance their health.”
Culhane also cautioned that not all functional foods deliver maximum benefits based on typical consumption patterns, and serving sizes can influence efficacy. “Often, the serving size and daily dosage are impractical,” she stated in an email. “To achieve the cholesterol-reducing benefits of soy protein, one would need to consume the equivalent of 1 quart of soy milk daily. Similarly, about 3 cups of oatmeal per day are required to realize the cholesterol-lowering effects of beta-glucan.”
Currently, consumers can find buttery spreads like Lipton’s Take Control and Raisio Group’s Benecol, which contain plant stanols and sterols to help mitigate heart disease risk. High-fiber breads and baked goods, such as Schwebel’s Roman Meal 100% Whole Wheat and Kellogg’s Kashi Soft-Baked Cookies, are also available to aid in cholesterol reduction. Plant stanols and sterols, which are naturally present in vegetable oils and cereals, work to inhibit the absorption of dietary cholesterol, thereby lowering overall and LDL cholesterol levels in the bloodstream. These compounds are increasingly incorporated into functional foods, such as Minute Maid Premium Heartwise orange juice, which contains Cargill’s trademarked CoroWise plant sterols, and Joseph’s Bakery’s flatbreads that feature ADM’s CardioAid plant sterols.
Researchers are also exploring functional food innovations, such as extracting beta-glucan from mushrooms to enhance immune function, producing fiber-rich inulin flour from chicory root, and investigating various beneficial nutrients derived from algae. While algal-based food products have potential health benefits, researchers face challenges in quantifying these advantages and understanding how harvesting, storage, and processing techniques affect the nutritional value of algae. The emerging field of phycology, the scientific study of algae, presents opportunities for collaboration and experimentation in developing new functional food ingredients.
“I believe the future of functional foods is trending toward a deeper understanding of the chemistry and composition of native or raw foods,” said Kristi Crowe-White, Ph.D., an associate nutrition professor and registered dietitian at the University of Alabama. “We have a solid grasp of around 20 compounds that are well integrated, but there is much more to explore. This is an exciting time in the field.” As the market evolves, products like calcium citrate and alfacalcidol tablets may also gain prominence for their contributions to bone health, further enriching the functional food landscape.