The global health ingredients market is poised for significant growth, with an expected compound annual growth rate (CAGR) of 7.8% from 2022 to 2027. The market is projected to increase from $100.5 billion in 2022 to $146.3 billion by 2027. This growth is driven by evolving consumer preferences and technological advancements in personalized nutrition, which have made it possible to develop more targeted and need-based products. These ingredients offer a range of functional benefits, such as supporting the immune system, aiding digestion, promoting mental health, enhancing beauty, and improving cardiovascular health.
How are consumer preferences for clean-label products influencing the demand for plant-based herbal supplements and botanicals?
One of the key trends in the health ingredients market is the growing shift towards plant-based alternatives. As consumers move away from animal proteins, the demand for plant protein ingredients is rapidly expanding. This shift is not only impacting the protein segment but is also driving the growth of plant-based herbal supplements and botanicals. Consumer interest in plant extracts is being influenced by the desire for clean-label products, sustainability concerns, and an increasing need to avoid allergens.
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Furthermore, the market for herbal supplements is broadening beyond vegans to include flexitarians—those who are adopting more plant-based diets but are not entirely vegetarian. This change in consumer preferences presents significant growth opportunities in the health ingredients market, particularly for products that cater to plant-based and clean-label demands.
Probiotics: A Fast-Growing Segment
Among the various product categories in the health ingredients industry, probiotics are expected to achieve the highest CAGR in terms of value. Probiotics offer significant health benefits, particularly for gut health and immune support. As preventative healthcare gains traction, consumers are increasingly turning to probiotics to strengthen their immune systems and prevent diseases.
A survey conducted in May 2020 by DuPont Nutrition & Biosciences in collaboration with the Natural Marketing Institute revealed a surge in probiotic use across key global markets. In the U.S., probiotic usage rose by 66%, with 25% of supplement users incorporating probiotics into their routine—up from just 15% six months earlier. Similar trends were observed in Italy and China, with the number of probiotic users increasing by 188% and 108%, respectively. This heightened interest, particularly during the pandemic, signals continued growth for probiotics in the long term, as consumers in these markets expect to maintain or increase their use of probiotics.
Plant-Based Foods Driving Market Growth
Plant-based foods are emerging as a primary growth driver within the health ingredients market. Several factors, including the rise of vegan culture, increased health awareness, and concerns about animal welfare, are contributing to the popularity of plant-based diets.
According to the Good Food Institute’s 2021 report, plant-based food sales have outpaced overall food sales in both dollar and unit growth for the past three years. In fact, plant-based food sales have increased by 54%, while total food sales have grown by just 2%. This growth is a key indicator that plant-based foods are driving retail expansion in the health ingredients sector, and this trend is expected to continue through the forecast period.
Asia-Pacific to Lead the Market
The Asia-Pacific (APAC) region is expected to capture the largest health ingredients market share during the forecast period. A major factor contributing to this growth is the large millennial population in the region. According to the World Economic Forum, Asia is home to 1.1 billion millennials, making up 24% of the region’s population. This demographic is highly active and increasingly health-conscious, seeking innovative products that align with their fitness and wellness goals.
As millennials and Gen Z become key consumers of dietary supplements, particularly in countries like China and India, the demand for health ingredients in APAC is set to rise significantly. This demographic shift is expected to fuel market expansion in the region, driving both value and volume sales of health ingredients in the coming years.
Top Health Ingredients Companies and Their Role in Market Innovation and Expansion
The health ingredients market is highly competitive, with several prominent players dominating the landscape. Key health ingredients companies include Archer Daniels Midland Company (ADM), Associated British Foods, Kerry Group, DSM, BASF, Cargill, Ingredion, Arla Foods, Tate & Lyle, Lonza, Glanbia, CHR Hansen Holdings, and Probi. These companies are focusing on strategic partnerships, expansions, and new product launches to strengthen their market presence and capitalize on emerging trends.
In conclusion, the health ingredients market is on track for substantial growth, driven by consumer demand for functional foods and supplements that cater to specific health needs. The market’s expansion is fueled by the increasing shift towards plant-based diets, the growing popularity of probiotics, and the rise of health-conscious consumers in key regions such as Asia-Pacific. As these trends continue, the market presents significant opportunities for companies that are able to innovate and meet evolving consumer demands.
The Road Ahead: Market Opportunities
As the health ingredients market continues to expand, there are numerous opportunities for growth. Companies must stay ahead of emerging trends to secure their place in this competitive landscape. Here are some key questions companies can consider as they navigate the evolving market:
- What are the known and unknown adjacencies impacting the health ingredients market?
- What new revenue sources can be tapped into?
- Who will be your top customers, and what will drive them to choose your product over competitors?
- How can you defend your market share or win over your competition?
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