Industry insiders reveal what’s new and next—and strategies to capitalize on demand to grow your business

As health-conscious consumers get back to their go-go-go lives, they are looking to food and beverages to do

more for their well-being: Demand for products that are fortified with added nutrition and health-promoting ingredients just keeps growing. BCC Research predicts the global market for functional food and beverages will grow from $216.4 billion in 2022 to $324.4 billion by 2027 (1).

“We’re living in a society where everyone is multitasking. Time is scarce and convenience is king. Functional food is a way to pack a powerful nutritional punch,” asserts Kellyann Petrucci, M.S., N.D., author ofThe Bone Broth Diet and Founder of Dr.Kellyann Bone Broth Protein. Dr. Petrucci notes that it’s not just health-conscious consumers who are reaching for functional foods. Many mainstream consumers use fortified food and beverages to help ease the transition to healthier diets.

“I see it all the time: When people leave their doctor and hear they have high blood pressure or diabetes for the first time, they know they need to make dietary changes, but it’s overwhelming,” says Dr. Petrucci. “They may not know where to start or even how to cook. In this scenario, functional foods are an entry into healthier eating or the path of least resistance. It’s a supercharged way to make food medicine. Research shows functional foods are one of the most important ways to heal our bodies and reverse disease.”

$324.4B

global market for functional food & beverages by 2027

61% of global consumers plan to increase investment in their health over the next 12 months.

This is evident across generations. Gen Z, Millennials and Boomers lead the charge. That's according to data outlined inFunctional Health Benefits for Every Generation, a new eBook from Kerry (2).

“Across all age ranges, consumers are looking for functional benefits from their favorite food and beverages,” said John Quilter, Kerry’s VP of ProActive Health, in a press release. “However, it’s also true that different groups often have different needs, so an understanding of the importance of demographic factors like age and activity level can help manufacturers create on-trend products. For example, manufacturers should use functional ingredients that are supported by research as well as appealing to children’s tastes to win over millennial parents.”

Top goals driving functional food and drink sales, per Kerry:

bolstering immunity: 58%
strengthening bones and joints: 46%
improving digestive health: 43%
protecting heart health: 40%
increasing energy: 39%

Consumers also want to lose weight, calm stress, improve sleep, boost brainpower, and combat signs of aging, says Dr. Petrucci. To do this, they look for products fortified with ingredients such as CBD, probiotics, medicinal mushrooms, adaptogens, collagen, plant protein, and botanicals.

With prices of consumer goods rising due to inflation and lingering supply chain issues, getting the biggest nutritional bang at the most affordable price point is top of mind.Consumers also continue to prioritize clean label, transparency and sustainability. The International Food Information Council’s 2021 Food and Health Survey found that 42% of consumers believe their food purchasing choices impact the environment, and 70% say climate change influences what they buy (3). It’s worth noting that consumer support for sustainability is expanding beyond the environment. More than half of the respondens emphasized the importance that people working in food production, retail, and foodservice be treated fairly and quitability (3).

4 Trends Driving Demand

1) Microbiome benefits:

“Gut health has never been more important and relevant to consumers,” says Jesse Merrill, CEO and Co-founder, Good Culture. “It’s no surprise that the last two years have forced consumers to be laser focused on building their immune systems to aid in combating unwanted issues and illness. We also know there is a connection between gut health and brain health. Research has shed light on the power of probiotics and the importance of the microbiome in overall health. In fact, a recent study found a diet high in fermented foods, like cottage cheese, can enhance the diversity of bacteria in the gut and decrease inflammation even more so than a high-fiber diet. As more consumers learn about these powerful health benefits of cultures, they are looking to bring more fermented and cultured foods into their daily diet to realize these powerful gut health benefits.”

Products fortified with food-safe probiotics like Kerry’s spore-forming probiotic BC30, as well fermented fare like kimchi, kefir, and kombucha, have room to grow. Merrill stresses checking labels to ensure products do have live and active cultures: “Many people don’t realize that not all dairy is created equal.Many brands do not actually have live and active cultures in the finished product, so we encourage people to do their research.”

2) Antioxidant support:

“One of the most effective methods for delivering more function is through the power of antioxidants,” says Brian Zapp, Creative Director, Applied Food Sciences (AFS). “Many natural products already contain trace amounts of these beneficial compounds. However, levels may not be sufficient enough to call out. That’s why I always advise people to brush up on their nutrient claims before posting a ‘good source of antioxidants’ message on their label. The product must contain at least 10% RDI, and many forms of antioxidants do not have a nutritional value established.” He says AFS’s green coffee bean extract PurCaf, the green tea extract PurTea, and the organic guayusa extract AmaTea all offer easy ways to give products a boost of clean energy and antioxidant support.

Another trending ingredient to look for include: Futureceutical’s purslane powder. And also check out Nektium’s mango leaf extract Zynamitea, which contain antioxidant plant compounds proven to help boost the mental and physical aspects of sports performance.

3) Supercharged hydration:

“Everyone needs to hydrate. Meeting the RDA for water intake can have tremendous benefits on everything from digestion to skin to your waistline. Yet so many people fail to drink enough water,” says Dr. Petrucci. Companies are working to make beverages more appealing by doubling down on hydration and functional benefits. For instance, Dr. Kellyanne offers a lemony powdered drink mix fortified with SOD B, an antioxidant-rich extract derived from cantaloupe. She notes, “This ingredient has been clinically proven to help visually reduce cellulite and skin dimpling around thighs, help restore skin elasticity and resilience, protect against UV skin damage, and help shrink fat cells below the skin surface.”

Other hydration trends include:

coffee boosted with adaptogens
supercharged waters (such as Nirvana HMB, which contains added HMB to promote muscle growth and repair)
fizzy sodas (like Olipop, with added prebiotic fibers for gut health)
fortified mocktails (with nootropics, CBD, and mushrooms).
Water tapped from fruits and other plant sources, such as maple water, birch water, cactus water, and artichoke water. These sips are expected to gain momentum in the coming months.

4) Protein innovations:

The popularity of plant protein continues to soar, says Zapp. “Almost every category is boasting plant protein, especially meat alternatives, non-dairy, meal replacements, and spreads.”

Consumers are paying more attention to the quantity and quality of protein that products deliver, adds Merrill. “More consumers are becoming aware of the difference between complete vs. incomplete protein sources. Good Culture Cottage cheese, for example, delivers 19g of protein per single-serve cup and is a complete protein with all 9 essential amino acids.”

Dr. Pertucci sees growing awareness about the digestibility and functionality of proteins. “For example, collagen is a large molecule that’s hard for the body to digest. In my bone broth and protein powders, we take the extra step to hydrolyze our collagen so it’s more bioavailable and easier for the body to digest.”

Secrets to Sales Success

When stocking shelves, tune into the habits and patterns of your customers, says Dr. Petrucci. “Meet consumers where they are at. For example, knowing almost every American drinks coffee, we created collagen creamers to add to daily coffee drinks without altering the flavor of the coffee. It’s a simple way of adding a high dose of collagen to their morning drink. Likewise, our bone broth comes in single-serving on-the-go packets that are convenient for consumers we know are busy and on the go.”

Also:Label products with clear benefit callouts, but take care not to limit the reach, says Zapp. He notes, “plant-based” is likely to garner stronger sales than “vegan.” Plant-based has a broader appeal, and plants are perceived to provide added perks.

Bringing in trusted brands committed to quality and transparency is also critical. “Build trust within your brand,” says Dr. Pertrucci. “Consumers should know what they are buying and feel safe knowing your product is tested and effective.”WF