A Guide to Functional Foods

A History and Definition of Functional Foods

The term functional food was first used in 1993 to describe Japan’s initiative to utilize the health properties of food to improve the health of its population1. Japan was the first and remains the only nation to regulate the use of the term functional food as a health claim.  Foods that wish to use the claim must be approved by the Food for Specified Health Uses (FOSHU) program. Foods approved by this program are allowed to use the FOSHU seal on their products2.

Generally, functional foods are defined as foods and food components that provide a health benefit beyond basic nutrition, but there is no definition that is globally recognized by regulatory bodies3. This category of foods can contain conventional foods, fortified, enriched, or enhanced foods, and dietary supplements. The International Food Science Institute defines functional foods as follows, “a food can be regarded as ‘functional’ if it is satisfactorily demonstrated to affect beneficially one or more target functions in the body, beyond adequate nutritional effects, in a way that is relevant to either an improved state of health and well-being and/or reduction of risk of disease. Functional foods must remain foods and they must demonstrate their effects in amounts that can normally be expected to be consumed in the diet: they are not pills or capsules, but part of a normal food pattern4”. In the US, the FDA regulates the use of the term, but does not provide a legal definition5. The term functional food is viewed largely as a marketing term.

Functional foods are segmented into three categories.

  1. Conventional foods are functional foods that have naturally occurring bioactive food compounds. Examples include antioxidants found in orange juice and probiotics in yogurts.
  2. Modified foods are functional foods that contain bioactive compounds through enrichment or fortification such as omega 3 fatty acids being added to margarine.
  3. Food ingredients are functional foods that are synthesized. A common functional food ingredient is indigestible carbohydrate which is used as a prebiotic2.


Nutraceuticals is a term that is often used interchangeably with functional foods. However, Nutraceuticals refers to any bioactive component that provides a health benefit, while functional foods refer to the food form only2.

Nutrition research has seen a large increase in the number of studies investigating functional foods and disease prevention2.  Over the past 25 years, there has been over an 1800% increase in the number of published studies investigating functional foods available on PubMed (Figure 1).


Current Market for Functional Foods

Many factors have contributed to the dramatic increase in the market for functional foods, a trend that has been seen in the majority of developed countries worldwide3. Advances in food science technology paired with consumer trends have allowed the functional food market to create products that meet consumer demands2. Since 1995, there has been a shift from removing unhealthy components (i.e. low fat, low carb) to adding healthy components into to foods. Consumers want foods to be convenient yet provide health benefits3.

Studies have also shown that increased healthcare costs, increased life expectancy, and the desire to avoid disease to maintain a high quality of life are key drivers of the increased consumption of functional food6. Consumers have shown an increased desired to self-treat using their diets. This interest in food as medicine has been found to be highest among individuals with high incomes2. The most common food components that consumers report working to increase in their diets are fiber, protein, vitamin D, calcium, nuts/seeds and whole grains. 56% of adult consumers report interest in eating more superfoods7.  Interested in popular diets for weightless and health optimization has also impacted the increased demand for functional8.

Knowledge and usage of functional foods are high among consumers. Google named “food with a function” as a top five food trend in 2016, and functional foods were named one of the top US food and nutrition trends for 2017 by the International Food Information Counsil9. Over the past five years, functional foods, such as turmeric, have seemed a Google search increase of over 300%10. 80% of consumers believe that functional foods and beverages effectively maintain or improve health2. A 2019 report from the Food Marketing Institute found that 61% of consumers reported eating foods in the past week that have specific benefits for their bodies7. A 2019 market survey by the International Food Information Council found that 1 in 4 consumers seek a health benefit from their food. The top five desired health benefits are weight loss/management, increased energy, digestive health, cardiovascular health, and muscle health11.

In addition to physical well-being, consumers are also interested in improving their mental health with their diets2. Since 2017, the definition of a healthy lifestyle has expanded to include exercise, relaxation, and mental health7. Emotional and mental health was ranked as one of the top ten desired health benefits from food11.

This trend of increased consumption of functional foods also extends to foodservice where restaurants are also reporting increased demand for menu items with superfoods and health benefits (IFT 2020). Many restaurants, including fast food chains like Chick-la-A, have started developing functional food products to add to their menus12.

Market Size and Value

The US functional food market was estimated to be worth around $31.5 billion (USD) in 2015 and continued growth is forecasted. The majority of the functional food market in the US is composed of dietary fibers, vitamin and mineral functional foods (Figure 2)8.

This trend of increased market value is also forecasted for the global market. The value of the global functional foods market is currently estimated at $161.49 billion (USD). CAGR is expected to reach 7.9% by 2025. The Asian Pacific region consumes 40% of the functional foods market and is leading the growth of this market due to its large population and increasing disposable income. Key countries that drive the functional food market are India, China, Russia, Brazil, and South Africa8.

Functional foods have a wide variety of potential application segments. Important categories of the functional food market are carotenoids, dietary fibers, fatty acids, minerals, prebiotics, probiotics, and vitamins. In 2018, functional foods with benefits to cardiovascular health were the dominant application segment8.

Dividing functional foods by product type, dairy products represented the largest market share in 2018. Popular dairy functional foods include yogurts, milk drinks, and enhanced spreads. The market share of bakery and cereal functional foods is expected to increase by 2025 as companies cater to the consumer demand for functional snack foods8.




Market forecasts predict that the functional food market will continue to rapidly expand over the next 5 years8. The consumer demand for processed food with health benefits is a key driver of this growth. The current environment with the COVID-19 pandemic has made consumers eager to purchase functional foods and beverages with immunity benefits. Products that require a minimal change in the consumer’s habits, such as enhanced snack foods and beverages, are expected to do very well in this market13.

With the creation of functional foods by adding functional ingredients, maintaining the desired flavor is a major concern. TastesNatural™’s products can help you to achieve the desired flavor profile of your food or beverage. Our products have been tested on many functional ingredients and yielded successful results. Get in touch with our team to design the Tru product solution for your products – start with free samples here.



  1. Editorial, Functional Foods. European Journal of Clinical Nutrition. 2010; 64:657-659. doi:10.1038/ejcn.2010.101.
  2. Crowe KM, Francis C. Position of the Academy of Nutrition and Dietetics: Functional Foods. Journal of the Academy of Nutrition and Dietetics. 2013;113(8):1096-1103. doi:10.1016/j.jand.2013.06.002.
  3. Kearney, John. “Food Consumption Trends and Drivers.” Philosophical Transactions of the Royal Society B: Biological Sciences, vol. 365, no. 1554, 2010, pp. 2793–2807., doi:10.1098/rstb.2010.0149.
  4. Diplock AT, Aggett PJ, Ashwell M, et al. Scientific concepts of functional foods in Europe: consensus document. Br J Nutr. 1999; 81:1–27.
  5. Klemm S. Functional Foods. EatRight. https://www.eatright.org/food/nutrition/healthy-eating/functional-foods. Accessed May 6, 2020.
  6. Ozen AE, Pons A, Tur JA. Worldwide consumption of functional foods: a systematic review. Nutrition Reviews. 2012;70(8):472-481. doi:10.1111/j.1753-4887.2012.00492.x.
  7. The Top 10 Functional Food Trends. IFT.org. https://www.ift.org/news-and-publications/food-technology-magazine/issues/2020/april/features/the-top-10-functional-food-trends. Accessed May 6, 2020.
  8. Functional Foods Market Size, Growth & Trends: Industry Report, 2025. Functional Foods Market Size, Growth & Trends | Industry Report, 2025. https://www.grandviewresearch.com/industry-analysis/functional-food-market. Accessed May 6, 2020.
  9. Insight F. Functional Foods, Sustainability, Protein, CRISPR and What’s “Healthy” Among Top U.S. Food and Nutrition Trends in 2017. IFIC Foundation. https://foodinsight.org/functional-foods-sustainability-protein-crispr-and-whats-healthy-among-top-u-s-food-and-nutrition-trends-in-2017/. Published February 21, 2019. Accessed May 6, 2020.
  10. 2016 Food Trends on Google: The Rise of Functional Foods. Google. https://www.thinkwithgoogle.com/consumer-insights/2016-food-trends-google/. Accessed May 6, 2020.
  11. International Food Information Council. 2019 Food & Health Survey.; 2019.
  12. Who’s Leading the Functional-Foods Movement? QSR magazine. https://www.qsrmagazine.com/menu-innovations/whos-leading-functional-foods-movement. Accessed May 6, 2020.
  13. Food Bytes Quarterly Trend Report – Q1, 2020. Rabobank; 2020.

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