Take a walk through any large grocery store or specialty shop—or browse online at a food product website—and you’ll likely find a wide selection of protein powders, energy drinks, power bars, probiotics, vitamin water, and calcium-fortified beverages aimed at supporting bone health. These items are fortified with nutrients, phytochemicals, botanicals, or dietary supplements, collectively known in the industry as functional foods. Functional foods are characterized by their potential to positively impact health beyond basic nutrition, offering benefits that go beyond merely fulfilling daily nutrient requirements. They can also contribute to reducing disease risk and fostering overall well-being.
While the U.S. Food and Drug Administration (FDA) oversees the regulation of functional foods, it has yet to issue an official definition. The agency notes, “Terms such as ‘functional foods’ or ‘nutraceuticals’ are commonly used in the market. These foods fall under FDA regulation according to the Federal Food, Drug, and Cosmetic Act, despite lacking a specific legal definition.” Nevertheless, the demand for these products is on the rise, and many experts predict 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-dense foods and beverages. Companies entering the functional foods market are responding to this trend by continually launching new offerings.
Kara Nielsen, a food and beverage trends expert, stated in a recent Packaged Facts report on innovative wellness that, “Due to growing consumer awareness and interest in medicinal foods, these products 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 from Technavio, the global market for functional foods and beverages is expected to grow steadily, registering a compound annual growth rate (CAGR) of nearly 8% from 2017 to 2021. During the same period, the U.S. market is projected to see a CAGR of 6.53%. This trend is fueled by an aging population focused on health maintenance, soaring medical expenses, and heightened consumer interest in the relationship between healthy eating and overall well-being.
Functional foods are no longer a niche segment, with some of the largest food corporations entering the field. For instance, Campbell’s CEO Denise Morrison highlighted the company’s ambition to expand into faster-growing markets like organic and functional foods when it acquired Pacific Foods for $700 million earlier this year. PepsiCo also entered the probiotics market by acquiring beverage maker KeVita last fall and launching its Tropicana Essentials Probiotics line, which a company representative claimed made it the first brand to introduce probiotics into the mainstream juice aisle. Additionally, General Mills’ venture capital arm led a $6.5 million Series D funding round in March for Farmhouse Culture, a startup focused on fermented and probiotic food and beverages.
Key industry players are expected to launch new functional food products as research and development allows. They continue to explore potential acquisitions to enhance profits and share prices, with recent partnerships and purchases indicating a focus on smaller, agile startups for the next big breakthrough. The Japanese and Russians are credited with pioneering the development of functional foods to improve digestion and enhance performance. The first commercial application of a functional food in the U.S. may have occurred in 1924 when Morton Salt Company started adding iodine to its products at the request of the government to combat iodine deficiency in the Great Lakes region, known then as the “goiter belt.” This practice of iodizing salt, borrowed from Switzerland, helped alleviate the issue.
Oatmeal has played a significant role in raising public awareness about 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), or “bad” cholesterol. As news of this benefit spread, public interest in functional foods grew. “It took many clinical trials to substantiate the data,” she explained to Food Dive. “In 1997, the FDA approved the claim that beta-glucan could lower serum cholesterol. That marked the beginning of this movement.” Although some early products were successful, others struggled in the marketplace. For example, in the late 1990s, Kellogg’s Ensemble line of cholesterol-lowering foods containing “natural soluble fiber” from psyllium wheat husk was discontinued within a year due to poor sales attributed to generic packaging and merchandising issues.
As marketing, packaging, and distribution of functional foods improved, successes increased. In 1985, General Mills launched Fiber One cereal, and in 1987, Danone introduced its popular Activia probiotic yogurt in France, which it brought to the U.S. in 2006. Both products remain successful today. The timing was right for Fiber One, aligning with the trend toward high-fiber foods. Meanwhile, Activia’s marketing efforts helped overcome initial consumer skepticism about “friendly bacteria,” a concept more readily accepted in Europe than in the U.S.
Since then, a vast array of functional foods has entered the U.S. market, with some manufacturers carefully navigating label claims about health and wellness to comply with Federal Trade Commission regulations. The FTC mandates that health claims must be supported by scientific evidence, and functional food products cannot legally claim to cure diseases. Furthermore, health claims on food or beverage labels must pass FDA scrutiny, a process that can be lengthy and costly. Companies must conduct research and safety reviews of functional food substances and petition the FDA to obtain Generally Recognized As Safe (GRAS) status for intended uses.
Consumer acceptance of functional foods is crucial for market success. Culhane emphasized that long-term success relies on personal experiences that motivate lifestyle changes. While compounds like lycopene—an antioxidant found in tomatoes and watermelons—can significantly reduce prostate tumor risks, she noted that they would not be effective for someone experiencing prostate issues in their 50s unless they started consuming them in their 20s. “The challenge is getting young adults to think about how their eating habits can enhance their health,” she said.
Culhane also cautioned that not all functional foods deliver maximum benefits when consumed as intended, and serving sizes can impact their effectiveness. “Often, the serving size and daily dosage are impractical,” she wrote in an email. “For example, to achieve the cholesterol-lowering benefits of soy protein, one would need to consume about a quart of soy milk per day. Similarly, three cups of oatmeal would be necessary to benefit from 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, which 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 that assist in lowering cholesterol. Stanols and sterols are plant-based compounds naturally found in vegetable oils and cereals that inhibit cholesterol absorption, thereby helping to reduce total and LDL cholesterol levels.
These compounds are increasingly integrated into functional foods. For instance, Minute Maid Premium Heartwise orange juice contains Cargill’s trademarked CoroWise plant sterols, while Joseph’s Bakery’s flatbreads feature ADM’s trademarked CardioAid plant sterols. Other functional food innovations are underway as researchers extract beta-glucan from mushrooms to bolster the immune system, produce fiber-rich inulin flour from chicory root, and explore various beneficial nutrients from algae. Although algae-derived food products can promote human health, researchers face challenges in quantifying benefits and understanding how harvesting, storage, and food processing techniques influence the nutritional value of algae. The emerging field of phycology—the scientific study of algae—represents one area of exploration for those interested in developing new functional food ingredients.
“I believe [the future of functional foods is moving] 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, in an interview with Food Dive. “We have a solid foundation of about 20 compounds that are well established, but that’s not the limit; there are many more to explore. It’s an exciting time to be involved in this field.” As functional foods continue to evolve, products like Citracal calcium citrate petites are becoming increasingly popular in stores, reflecting the growing consumer interest in health-oriented offerings.