The global functional food and beverage market reached a value of USD 364.18 billion in 2024. It is projected to expand from USD 398.81 billion in 2025 to USD 793.60 billion by 2032, growing at a compound annual growth rate (CAGR) of 10.33% during the 2025–2032 period. In 2024, Asia Pacific led the market, accounting for 39.45% of the global share.

In the United States, the market for functional food and beverage products is expected to grow substantially, reaching an estimated USD 117.22 billion by 2032. This surge is driven by increasing consumer preference for nutrient-dense products that support health and wellness goals.

Functional foods and beverages go beyond basic nutrition by incorporating health-boosting compounds such as amino acids, proteins, vitamins, minerals, fatty acids, and prebiotics. With a growing public focus on immunity and well-being, particularly following global health crises like COVID-19—demand for these enhanced products has soared.

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Market Segmentation

The functional food market is categorized by type into cereals and grains, dairy products, bakery items, fats and oils, and other fortified foods; by distribution channel into supermarkets and hypermarkets, convenience stores, online platforms, and others—with supermarkets and hypermarkets leading in 2020, accounting for 44.21% of global sales and 43.06% in the U.S., reflecting strong consumer preference for in-store shopping; and by region into North America, Europe, Asia Pacific, South America, and the Middle East & Africa.

Report Highlights

• In-depth regional analysis of market dynamics
• Evaluation of key growth drivers, opportunities, and barriers
• Profiles and strategies of leading players
• Actionable insights into consumer trends and segment-specific demand

Market Drivers

Startups Catalyzing Growth Through Innovation

The growth of food and beverage startups has significantly driven market expansion by introducing innovative, health-focused products tailored to modern lifestyles. Examples include Remedy Organics (New Jersey), which offers plant-based beverages with botanicals, superfoods, and probiotics; YoFiit (Toronto), which creates chickpea-based non-dairy meal replacements; and Hapi Drinks (Texas), which provides sugar-free beverages for children to help address childhood obesity and type 2 diabetes. These targeted innovations are diversifying the market and appealing to niche consumer segments.

Regional Insights

Asia Pacific is expected to retain its leading market position, driven by rising incomes and growing demand for health-conscious foods in countries like China and India, with a 2020 market value of USD 100 billion and a projected CAGR of 10.04% from 2021 to 2028. In Europe, strict regulations are encouraging manufacturers to boost research and development, fostering innovation in functional products. Meanwhile, in North America, consumer preference for naturally sourced and clean-label products is creating a favorable environment for the growth of functional foods and beverages.

Competitive Landscape

Expanding in Emerging Markets Through New Launches

Leading food and beverage companies are exploring high-growth regions with rising health awareness to introduce functional offerings and strengthen their market footprint.

Key Companies Featured in the Report

• The Coca-Cola Company (USA)
• Celsius Holdings, Inc. (USA)
• PepsiCo Inc. (USA)
• Glanbia Plc (Ireland)
• Nestlé S.A. (Switzerland)
• Arla Foods amba (Denmark)
• Hearthside Food Solutions LLC (USA)
• Tyson Foods Inc. (USA)
• General Mills Inc. (USA)
• Danone S.A. (France)

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Industry Development

December 2020: Nestlé unveiled a functional milk product in China under its YIYANG Active brand. Designed for adults, the beverage supports joint flexibility, muscle strength, and bone health. This powdered drink was the first product from Nestlé to secure functional food certification in the Chinese market.