Walk through any large grocery store or specialty outlet, or browse any food product website, and you’ll likely encounter a variety of protein powders, energy drinks, power bars, probiotics, vitamin-enhanced waters, and calcium-fortified beverages aimed at supporting bone health. These items are enriched or enhanced with nutrients, phytochemicals, botanicals, or dietary supplements, and are referred to in the industry as functional foods. Functional foods are characterized by their potential positive impact on health beyond basic nutrition; they are designed not just to meet daily nutrient needs but also to help reduce disease risk and promote overall well-being. Although the U.S. Food and Drug Administration (FDA) is responsible for regulating functional foods, it has yet to establish an official definition.
Terms such as “functional foods” and “nutraceuticals” are commonly used in the marketplace. The FDA oversees these products under the Federal Food, Drug, and Cosmetic Act, even though they are not explicitly defined by law. Regardless, the demand for these foods is on the rise, with many experts predicting that functional foods will experience significant growth in the near future. As U.S. consumers become more health-conscious, they are increasingly seeking natural ingredients and nutrient-rich foods and beverages. Companies entering the functional foods market are responding to this trend by continuously launching new products.
Kara Nielsen, a food and beverage trends expert, stated in a recent Packaged Facts report on innovative wellness, “Due to growing consumer awareness and interest in medicinal foods, they are gaining traction in the natural food and beverage sector, where functional ingredients sourced from nature (as opposed to laboratories) are increasingly sought after.” According to a report by Technavio, the global functional foods and beverages market is projected to grow steadily, with an estimated compound annual growth rate (CAGR) of nearly 8% from 2017 to 2021. For the same period, the U.S. market is anticipated to see a CAGR of 6.53%. This trend is fueled by an aging population focused on health maintenance, rising medical costs, and increasing consumer interest in the link between healthier diets and well-being.
Functional foods have transitioned from a niche market, attracting major food companies. Campbell’s CEO Denise Morrison highlighted the company’s interest in expanding into faster-growing sectors like organic and functional foods when it acquired Pacific Foods for $700 million earlier this year. PepsiCo purchased the probiotic beverage maker KeVita last fall and introduced its Tropicana Essentials Probiotics line earlier this year, marking the first time probiotics have entered the mainstream juice aisle. Additionally, General Mills’ venture capital unit led a $6.5 million Series D investment in March to support Farmhouse Culture, a startup specializing in fermented and probiotic foods and beverages.
As research and development progress, major players in the functional food space are expected to introduce new products. They are also actively scouting for acquisitions that can enhance profits and share prices, often looking towards smaller, agile startups for innovative ideas. The Japanese and Russians are credited with pioneering the development of functional foods aimed at improving digestion and enhancing performance. The first commercial use of a functional food in the U.S. may have occurred in 1924 when the Morton Salt Company began adding iodine to its products to address iodine deficiency in the Great Lakes region, known as the “goiter belt.” This iodized salt practice, borrowed from Switzerland, helped alleviate the issue.
Oatmeal significantly raised awareness about the potential benefits of functional foods, according to Carol Culhane, president of International Food Focus Ltd. in Toronto. Oats contain beta-glucan, an active soluble fiber ingredient known to lower low-density lipoprotein (LDL) cholesterol, often referred to as “bad” cholesterol. The announcement of these findings sparked greater public interest in functional foods and related research. “It took many clinical trials to validate the data,” she explained. “In 1997, the FDA approved the claim that beta-glucan could reduce serum cholesterol, marking the beginning of this movement.”
While some early functional food products achieved success, not all were market winners. For instance, in the late 1990s, Kellogg’s launched its Ensemble line of cholesterol-lowering products containing “natural soluble fiber” from psyllium husk, but it was discontinued within a year due to poor sales attributed to generic packaging and distribution issues. However, as marketing, packaging, and distribution strategies improved, successes increased. In 1985, General Mills introduced its Fiber One cereal, and in 1987, Danone launched its popular Activia probiotic yogurt in France, which made its way to the U.S. in 2006. Both products continue to thrive today, benefiting from timely market entry and effective marketing strategies.
Since then, an extensive array of functional foods has flooded the U.S. market, with some manufacturers navigating a delicate balance regarding health claims. The Federal Trade Commission (FTC) mandates that health claims be scientifically substantiated, and functional food products cannot legally claim to cure diseases. Health claims on food or beverage labels also require FDA regulatory approval, a process that can be lengthy and costly. Companies must conduct research and safety assessments of functional food substances and petition the FDA for Generally Recognized as Safe (GRAS) status for their intended uses.
Consumer acceptance is crucial for the functional foods market, and Culhane emphasizes that long-term success relies on personal experiences that encourage lifestyle changes. For example, while lycopene—an antioxidant found in tomatoes, watermelon, and other foods—”can certainly reduce prostate tumors,” it may not provide immediate benefits for someone experiencing prostate issues in their 50s. “They would need to start in their 20s,” she noted, highlighting the challenge of encouraging young adults to adopt dietary habits that enhance health.
Culhane also warned that not all functional foods deliver maximum benefits as typically consumed, and serving sizes can affect efficacy. “Often the serving size and daily dosage are impractical,” she remarked. “One would need to consume the equivalent of 1 quart of soy milk per day to realize the cholesterol-lowering benefits of soy protein, and about 3 cups of oatmeal daily to achieve the same with beta-glucan.”
Today, consumers can find buttery spreads, such as Lipton’s Take Control and Raisio Group’s Benecol, containing plant stanol and sterol esters to help reduce heart disease risk, alongside high-fiber breads and baked goods like Schwebel’s Roman Meal 100% Whole Wheat and Kellogg’s Kashi Soft-Baked Cookies, which aim to lower cholesterol levels. Stanols and sterols—plant-based compounds found in vegetable oils and cereals—prevent dietary cholesterol absorption, thereby lowering total and LDL cholesterol levels in the bloodstream. These compounds are increasingly included in functional foods, like Minute Maid Premium Heartwise orange juice, which features Cargill’s CoroWise plant sterols, and Joseph’s Bakery flatbreads with ADM’s CardioAid plant sterols.
Further advancements in functional food products are underway, as scientists extract beta-glucan from mushrooms to enhance immune function, produce fiber-rich inulin flour from chicory root, and explore various beneficial nutrients from algae. Despite the potential health benefits of algal-derived food products, researchers face challenges in quantifying these benefits and understanding how harvesting, storage, and processing methods impact the nutritional value of algae. The emerging field of phycology, the scientific study of algae, presents an exciting opportunity for those interested in innovating and collaborating on new functional food ingredients.
“I believe the future of functional foods is headed towards a deeper understanding of the chemistry and composition of native or raw foods,” stated Kristi Crowe-White, Ph.D., an associate nutrition professor and registered dietitian at the University of Alabama. “We have a solid foundation of about 20 well-integrated compounds, but that’s just the beginning. There are many more to explore. It’s an exhilarating time to be in this field.” As the market for functional foods continues to evolve, consumers seeking the best quality calcium citrate supplements and other health-enhancing products will find a growing selection tailored to their needs.