Take a walk through any large grocery store or specialty shop, or browse online food product websites, and you will likely encounter a variety of protein powders, energy drinks, power bars, probiotics, vitamin waters, and calcium-fortified beverages designed to support bone health. These products are often enriched with nutrients, phytochemicals, botanicals, or dietary supplements and are referred to in the industry as functional foods. Functional foods are characterized by their potential to positively impact health beyond basic nutrition; they aim to do more than merely fulfill daily nutrient needs, as they also contribute to disease risk reduction and overall health promotion. While the U.S. Food and Drug Administration (FDA) is responsible for regulating functional foods, it has yet to provide an official definition.
The FDA notes, “Terms such as ‘functional foods’ or ‘nutraceuticals’ are commonly used in the marketplace. These foods are regulated under the Federal Food, Drug, and Cosmetic Act, even though they are not specifically defined by law.” Regardless, the demand for functional foods continues to rise, with many experts predicting significant growth in this sector in the near future as U.S. consumers become increasingly health-conscious and seek natural ingredients and nutrient-dense foods and beverages. Companies entering the functional foods market are keeping pace with this trend by consistently launching new products.
Kara Nielsen, a food and beverage trend expert, stated in a recent Packaged Facts report that “due to growing consumer understanding and interest in medicinal foods, they are rising in the natural food and beverage space where functional ingredients rooted in the real world (as opposed to labs) are increasingly in demand.” According to a report from Technavio, the global market for functional foods and beverages is projected to grow steadily, with an expected compound annual growth rate (CAGR) of nearly 8% from 2017 to 2021. Analysts predict a 6.53% CAGR for the U.S. market during the same timeframe. This trend is fueled by an aging population that is focused on health maintenance, rising medical costs, and an increasing consumer awareness of the link between nutrition and well-being.
Functional foods have transcended their niche origins, with major food corporations now investing in this arena. For instance, Campbell’s CEO Denise Morrison highlighted the company’s interest in expanding into more rapidly growing sectors like organic and functional foods with their $700 million acquisition of Pacific Foods earlier this year. Similarly, PepsiCo acquired probiotic beverage maker KeVita last fall and introduced its Tropicana Essentials Probiotics line earlier this year, marking it as the first brand to mainstream probiotics in the juice aisle. General Mills’ venture capital arm also led a $6.5 million Series D investment round in March to support Farmhouse Culture, a startup specializing in fermented and probiotic foods and beverages.
As research and development advance, we can expect major players in the functional food sector to launch new products. They continue to explore potential acquisitions to enhance profits and share prices, as indicated by recent collaborations and purchases, with a particular focus on agile and innovative startups that may introduce the next big trend. The Japanese and Russians are recognized as pioneers in the development and application of functional foods aimed at improving digestion and enhancing performance. The first notable application of a functional food in the U.S. occurred in 1924 when the Morton Salt Company began adding iodine to its products at the government’s request to address iodine deficiency related to goiter in the Great Lakes region.
According to Carol Culhane, president of International Food Focus Ltd. in Toronto, oatmeal significantly raised public awareness about the potential benefits of functional foods. Oats contain beta-glucan, a soluble fiber known to reduce low-density lipoprotein (LDL), commonly referred to as “bad” cholesterol. The FDA approved the claim that beta-glucan could lower serum cholesterol in 1997, marking a pivotal moment in the functional foods landscape.
While some early product launches were successful, others did not fare as well. For example, Kellogg’s Ensemble line of cholesterol-lowering products featuring “natural soluble fiber” was discontinued within a year due to poor sales attributed to generic packaging and merchandising issues. However, successes increased as the marketing, packaging, and distribution of functional foods improved. General Mills’ Fiber One cereal debuted in 1985, and Danone’s Activia probiotic yogurt was launched in France in 1987, reaching the U.S. market in 2006. Both products continue to thrive, with Fiber One capitalizing on the high-fiber food trend and Activia overcoming initial consumer skepticism regarding “friendly bacteria.”
An extensive range of functional foods has entered the U.S. market, although some manufacturers must tread carefully with health claims to avoid conflicts with the Federal Trade Commission (FTC), which mandates that health claims must be scientifically substantiated. The FDA also scrutinizes health claims on food and beverage labels, making the approval process both labor-intensive and costly. Companies must conduct thorough research and safety evaluations to petition the FDA for GRAS (Generally Recognized as Safe) status for their functional food substances.
Ultimately, customer acceptance is crucial for the market’s success. Culhane emphasizes that long-term success depends on personal experiences that motivate lifestyle changes. While lycopene, a potent antioxidant found in tomatoes and watermelon, can reduce prostate tumors, it may not yield immediate results for someone facing prostate issues in their 50s. “They would have to start in their 20s,” she notes, highlighting the challenge of encouraging younger adults to adopt health-enhancing dietary habits.
Culhane warns that not all functional foods deliver maximum benefits in typical serving sizes, which can affect their efficacy. “Often the serving size and daily dosage are not practical,” she explains, noting that one would need to consume about 1 quart of soy milk daily to gain cholesterol-lowering benefits from soy protein, or around 3 cups of oatmeal to achieve similar benefits from beta-glucan.
Today, consumers can find buttery spreads like Lipton’s Take Control and Raisio Group’s Benecol, which contain plant stanol and sterol esters to help lower 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, also support cholesterol reduction. Plant stanols and sterols, which are naturally found in vegetable oils and cereals, work to inhibit dietary cholesterol absorption, thereby lowering total and LDL cholesterol levels in the bloodstream. These compounds are increasingly being incorporated into functional food products, such as Minute Maid Premium Heartwise orange juice, which contains Cargill’s trademarked CoroWise plant sterols, and Joseph’s Bakery flatbreads, which feature ADM’s trademarked CardioAid plant sterols.
Additionally, scientists are exploring ways to extract beta-glucan from mushrooms to enhance immune function, produce fiber-rich inulin flour from chicory root, and investigate beneficial nutrients derived from algae. Although algal-based food products can offer health benefits, researchers acknowledge the challenges of quantifying their advantages and understanding how harvesting, storage, and processing affect their nutritional value. The growing field of phycology—the scientific study of algae—presents exciting opportunities for collaboration and innovation in developing new functional food ingredients.
Kristi Crowe-White, Ph.D., an associate nutrition professor and registered dietitian at the University of Alabama, shared her perspective on the future of functional foods, stating, “I think [the future of functional foods is] going more in the direction right now of the chemistry and really understanding the composition of native or raw foods. We have a good 20 compounds that are well incorporated, but that’s not the be-all and end-all. We have others we can be looking out for. It’s a very exciting time to be in this field.” As the functional foods market continues to evolve, products like those containing 1000 mg calcium citrate will likely play a crucial role in meeting consumer demand for health-enhancing options.