The global functional food and beverage market size was USD 364.18 billion in 2024. The market is projected to grow from USD 398.81 billion in 2025 to USD 793.60 billion by 2032, at a CAGR of 10.33% over the forecast period (2025-2032). Asia Pacific dominated the functional food and beverage market with a market share of 39.45% in 2024. The functional foods market in the U.S. is projected to grow significantly, reaching an estimated value of USD 117.22 billion by 2032, driven by increased adoption of foods rich in nutritional and functional substances by health-conscious consumers.

Functional foods and beverages are enriched with functional nutrients, in addition to the basic nutritional value of the product, to provide multiple health-related benefits. These nutrients include amino acids, vitamins, minerals, proteins, fatty acids, and prebiotics. Functional products have gained importance in recent years due to the increased awareness among consumers. In current times, when a pandemic such as COVID-19 has hit the world and everyone is concerned about boosting their immunity, functional beverage & Food products are becoming immensely popular.

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Market Segmentation

The functional food & beverages market is segmented as follows:

  • By Type: Functional cereals & grains, functional dairy products, functional bakery products, functional fats & oils, and other functional/fortified foods.
  • By Distribution Channel: Supermarkets/hypermarkets, convenience stores, online retail, and others. In 2020, supermarkets/hypermarkets led the global functional foods and drinks market, accounting for 44.21% of the global share and 43.06% of the U.S. market.
  • By Region: North America, Europe, Asia Pacific, South America, and the Middle East & Africa.

Report Highlights

This report provides a comprehensive analysis of regional market trends, key drivers, and industry challenges. It also includes detailed profiles of major industry players, along with insights into their strategic initiatives. Additionally, the report presents a segment-wise breakdown of the market, supported by industry-driven research.

Driving Factor

Rise of Food & Beverage Startups to Accelerate Market Expansion

The functional food & beverages market is experiencing significant growth due to the increasing number of startups specializing in nutrient-rich products. Companies like New Jersey-based Remedy Organics are developing plant-based beverages infused with super-ingredients, botanicals, herbs, proteins, and probiotics. With the rising demand for non-dairy alternatives, some startups are innovating in plant-based dairy substitutes—Toronto-based YoFiit, for example, leverages the high nutritional value of chickpeas to create functional non-dairy meal solutions.

Additionally, some startups focus on catering to consumers with chronic health conditions. Texas-based Hapi Drinks offers sugar-free beverages for children, aiming to address childhood obesity and Type 2 diabetes. The growing availability of these niche functional food & beverage products in major economies is expected to drive sustained market growth.

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Regional Insights

Asia Pacific Emerges as a Key Growth Hub

Asia Pacific is expected to dominate the functional food & beverages market, supported by increasing disposable incomes in countries like India and China. As living standards improve, consumer demand for healthier food and beverage options is projected to rise, creating lucrative business opportunities. In 2020, the Asia Pacific market was valued at USD 100 billion, with a forecasted CAGR of 10.04% from 2021 to 2028.

In Europe, stringent food and beverage regulations are expected to drive investments in research and innovation, fostering the development of advanced functional products. Meanwhile, in North America, growing consumer preference for natural food products is anticipated to fuel market expansion.

Competitive Landscape

Expansion into Emerging Markets Through Innovative Product Launches

Leading players in the functional food & beverages sector are increasingly targeting emerging markets, where rising health consciousness and improving incomes are creating promising business opportunities. To strengthen their presence, major food and beverage companies are introducing innovative products tailored to evolving consumer demands in these high-growth regions.

Key Players Covered in the Report

  • The Coca-Cola Company (Georgia, U.S.)
  • Celsius Holdings, Inc. (Florida, U.S.)
  • PepsiCo Inc. (New York, U.S.)
  • Glanbia Plc (Kilkenny, Ireland)
  • Nestlé S.A. (Vevey, Switzerland)
  • Arla Foods amba (Viby, Denmark)
  • Hearthside Food Solutions LLC (Illinois, U.S.)
  • Tyson Foods Inc. (Arkansas, U.S.)
  • General Mills Inc. (Minnesota, U.S.)
  • Danone S.A. (Paris, France)

Industry Development

December 2020: Nestlé introduced a new milk product under its YIYANG Active brand in China, targeting adults. This powdered beverage is formulated to support joint health, muscle strength, and bone density. Notably, it became the company’s first functional food product approved in China.

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