Nutraceuticals Market Size, Share & COVID-19 Impact Analysis, By Product Type (Dietary Supplements, Functional Foods, and Functional Beverages), Distribution Channel (Hypermarkets/Supermarkets, Convenience Stores, Online Retail, and Others) and Regional Forecast, 2021-2028

The global nutraceuticals market size was USD 320.00 billion in 2020 and is predicted to grow from USD 352.92 billion in 2021 to USD 658.11 billion in 2028 at a CAGR of 9.3% during the forecast period. Asia Pacific dominated the global market with a share of 38.96% in 2020.

The COVID-19 pandemic has severely negatively affected various industries, but some industries, including nutraceuticals and pharmaceuticals, have presented a tremendous growth opportunity. Based on our analysis, the ongoing pandemic has successfully shifted consumer preferences worldwide toward health-boosting products.

Nutraceuticals are gaining popularity globally due to the rising awareness of their numerous health benefits among consumers. The growing knowledge regarding these products' ability to prevent or delay the occurrence of various health disorders has contributed to escalating the demand for these products. These products are also becoming remarkably popular among individuals seeking alternative and natural ways to promote and maintain overall health and wellness.

Increasing Health Supplements Demand to Boost Market amid COVID-19 Pandemic

The COVID-19 pandemic has heavily and positively affected the market worldwide. There have been reports of a massive increase in demand for products that claim to enhance health and immunity. The circulation of advice from doctors worldwide to incorporate functional foods and dietary supplements in daily life to aid the immune system greatly contributes to the high adoption of these types of products.

The industry’s growth is primarily driven by increased consumer awareness about the benefits of consumption of health supplements, growing consciousness about preventive healthcare measures, and a rising population of affluent and health-conscious consumers. The rapid spread of coronavirus globally encourages people to shift towards products that support their immune health and adopt preventive healthcare measures that significantly boost product sales. Since the onset of the pandemic globally, panic buying of dietary supplements, functional foods, and beverages by consumers has contributed to the exponential growth in product sales in retail distribution channels. With a continuously increasing number of COVID-19-positive cases in major economies such as the U.S., Canada, China, India, the U.K., Germany, and others, the demand for these types of products remains high in the upcoming years as well.

NUTRACEUTICALS MARKET TRENDS

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Personalization of Nutrition is a Prominent Trend Propelling Growth

The personalized nutrition market is anticipated to witness exponential growth in the upcoming years. Such robust growth potential is expected to benefit the market, especially those with evidence-based health benefits and clean-labeled traits. The sustainable growth of this market pivots on personalized offerings such as the one-size-fits-all concept. Also, consumers are showing greater willingness for such customized offerings, which include supplements, diet, and exercise. Further, nutritional supplements are likely to emerge as a crucial intervention in the prognostic and proactive health concept. The factors mentioned above are anticipated to support the steady growth of the global nutraceuticals market.

DRIVING FACTORS

Increasing Popularity of Nutrient-Enriched Diets to Facilitate Market Growth

The improvement in healthcare opportunities, decrease in death rates, and consumer willingness to spend on health and wellness have led to an increase in the regional population. This has provided the necessary impetus to the growth of the nutraceuticals sector worldwide. According to the International Food Information Council (IFIC) Report 2017, for nearly two-thirds of U.S. adults, healthfulness plays a significant role in their food and beverage purchase decisions. The shifting preferences of consumers towards functional foods and beverages have also contributed to improved sales performance.

Consumers exhibit a greater willingness to opt for a concentrated nutrition source, and dietary supplements have answered this call effectively and conveniently. During the global pandemic, the realization of its significance in aiding immune and physical health has increased exponentially, which will favour the global market growth in the forthcoming years.

Rising Expenditure on Technological Advancement to Drive Growth

The high investment in research and development activities positively impacts a manufacturer's production technology and its quality. The nutraceutical industry has rapidly evolved in the past few years to respond to this growing demand for health-benefiting products. This is manifested in the exponential increase of the nutraceutical launches in functional beverages and dietary supplements categories. The rampant use of antibiotics in the form of over-the-counter medicines has negatively impacted our health. There are incidences of infections caused by antibiotic-resistance pathogens. This calls for the development of nutraceutical products that provide microbiota of great diversity that will enable enhanced immunity and overall well-being.

RESTRAINING FACTORS

High Regulatory Stringent Laws Associated with Product to Impede Market Growth

Despite the higher demand for the product, there are certain factors restraining the market growth. One among them is the highly stringent and complex regulatory structure for the commercialization of nutraceutical products. The global markets exhibit limited harmonized provisions on the composition of these products. The upper limits and conditions of use for other botanicals, botanical preparations, and bioactive substances are yet to be harmonized. The different opinions among several government bodies on the type of ingredients to be allowed and what quantity further challenge the harmonization aspect.

NUTRACEUTICALS MARKET SEGMENTATION

By Product Type Analysis

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Functional Beverages to Drive Future Sales Momentum 

The market is classified into dietary supplements, functional foods, and functional beverages based on the product type.

The functional beverages segment held a dominant share of the market in 2020. The segment is flourishing at an impeccable pace, accredited to the increasing number of health-conscious consumers switching from sugary drinks to drinks that are low in calories & sugar and offer functional benefits.

The increasing health consciousness among buyers has supported the sales of functional beverages such as soft drinks, colas, and sodas, which have been replaced with functional beverages. Moreover, the rising focus of prominent brands on the launch of low- and no-sugar functional foods will help maintain their market prominence.

Companies operating in the dietary supplements segment are embarking on the base expansion of their facility to fulfil the rising demand for health-benefiting products. For instance, in February 2019, Abbott announced its plan to invest USD 62 million in its Ohio nutrition and infant formula product plant to construct a new structure and acquire equipment and machinery.

By Distribution Channel Analysis

Online Retail Segment to Grow at the Fastest Pace

Based on the distribution channel, the global market has been categorized into hypermarkets/supermarkets, convenience stores, online retail, and others.

The online retail marketplace becomes a digital platform for consumers and merchants without warehousing the products. These marketplaces do offer shipment, delivery, and several easy payment options to their consumers. Several factors such as low product prices, discounts, shopping convenience, free shipping, and extensive product range, are anticipated to support the steady growth of the online retail segment.

The supermarkets/hypermarkets segment is expected to showcase considerable growth during the forecast period. This is because factors such as the stores being key distributors of the product on account of higher consumer reliance to purchase several food products & healthy foods and drinks.

REGIONAL NUTRACEUTICALS MARKET ANALYSIS

The market size in Asia Pacific stood at USD 124.70 billion in 2020. Asia Pacific is expected to dominate the global market. This is due to the rising population, increasing disposable income, and improving living standards in the region. The increasing awareness regarding health-improving foods is also likely to act as a key driving factor for market growth. Presently, Asia Pacific holds a significant share and is anticipated to grow at a CAGR of 9.83% during the forthcoming years.

The increasing popularity of functional foods and beverages within several Asia Pacific countries has supported regional market growth. For instance, in June 2020, the China Food Information Center (CFIC) published a survey report that concluded that 70% of China's population acknowledged that probiotics offer health benefits. Hence, the growing popularity of probiotics among consumers to improve gut health which ultimately prevents various chronic health conditions, can further propel the market growth.

North America is projected to hold the second-largest share of the market. The significant growth is attributed to the increasing consumer awareness of the health benefits of these types of products and their nutritional benefits for potential disease prevention and health enhancement. Functional foods and nutraceutical products can help improve health, reduce healthcare costs, and support economic development. The growth of these products is mainly driven by the continuously growing demand for energy drinks, fortified dairy products, functional beverages, and dietary supplements. However, country-specific regulations and health claim substantiation are challenges that the key market continues to face.

The market in Europe is primarily driven by the rising consumer inclination towards preventive healthcare measures. The increasing aging population in the region has significantly contributed to the growing demand for nutraceutical products, especially dietary supplements.  The regional key players are embarking on new product development to increase their presence in this market. For instance, in July 2019, Brazilian pharmaceutical company, NattoPharma, announced its new dietary supplement MenaQ7 Vitamin K2.

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The South American nutraceuticals industry is at the infancy stage and currently accounts for a small fraction i.e. approx. 12% of the total world market turnover. However, the region has lots of potentials and it can grow at a healthier pace in the forthcoming years. This industry is evolving at a considerable pace with conditions set for tremendous growth in the upcoming years. The growth in the shift towards preventive therapies, rising family income, satisfactory pricing environment growth in the pharma retail chain, and rise in healthcare spending is primarily responsible for the growing market of these products in the Middle East and Africa. Moreover, the growing investment by key international market players in the regional market is predicted to drive the growth.

KEY INDUSTRY PLAYERS

Companies Focus on Product Launches to Strengthen their Positions

The global market is moderately consolidated with a few prominent players such as Herbalife Nutrition Ltd, Archer Daniels Midland Company, Abbott, and Amway. The increasing popularity of health-benefiting products and the rising demand for functional beverages have significantly led to a surge in demand for nutraceutical products. Companies such as Archer Daniels Midland Company, Herbalife, and Amway are embarking on new product launches to broaden their existing portfolio.

For instance, in March 2019, Herbalife Nutrition Ltd. launched a new plant-based protein-rich supplement, Protein Drink Mix Select and Formula 1 Select Meal Replacement shake. Similarly, in June 2019, Archer Daniels Midland Company introduced a new line of vegan DHA/EPA blend with Qualitas Health, a leader in algae cultivation, manufacturing algae-based, vegan, sustainable products.

LIST OF KEY COMPANIES PROFILED:

• Herbalife Nutrition Ltd. (California, United States)


• Archer Daniels Midland Company (Illinois, United States)


• General Mills (Minnesota, United States)


• PepsiCo Inc. (New York, United States)


• BASF SE (Mannheim, Germany)


• Abbott (Illinois, United States)


• Amway (Michigan, United States)


• Glanbia Plc. (Ireland)


• Danone S.A. (Paris, France)


• Nestle S.A. (Vevey, Switzerland)

KEY INDUSTRY DEVELOPMENTS:

• February 2021: Israeli functional gummy supplement manufacturer TopGum Industries Ltd. is expanding its operations in the U.S. by establishing a new subsidiary TopGum, Inc., in New Jersey. The company aims at expanding its production capacity and marketing activities of functional gummy bears in North America and Europe.


• January 2021: The manufacturer of premium instant coffee, Alpine Start Inc., announced the launch of its functional beverages, With Benefits, with the help of American public benefit company Kickstarter. The new fortified beverages are loaded with vitamins, minerals, and MCTs, made using clean-label, natural ingredients for boosting immunity and focus.


• September 2020: Nuliv Science announced the launch of its newly rebranded sports nutraceuticals compound, Senactiv that promotes muscle energy and regeneration, which provides ample opportunities for the dietary supplements manufacturers to come up with innovative products

REPORT COVERAGE

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The global nutraceuticals market report includes qualitative and quantitative insights into the industry. It also offers a detailed analysis of the market size and growth rate for all possible segments. The report presents numerous key insights such as an overview of related markets, competitive landscape, recent industry developments such as base expansion, the regulatory scenario in critical countries, and key nutraceuticals industry trends.

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