How Promising is the Functional Food, RTC, and RTE Sector in India
How Promising is the Functional Food, RTC, and RTE Sector in India

Functional Foods and Natural Food Market witnessed the biggest growth during COVID. The global Functional Food Market grew from $180.59 billion in 2021 to $188.83 billion in 2022 at a CAGR of 4.6 percent and is projected to reach $285.30 billion by 2030. 

In India, the health and wellness industry is dominated by the traditional, complementary medicine segment followed by the personal care, beauty, and anti-aging segment which was $124 billion in 2018 and is projected to reach $638 billion by 2025 with a CAGR of 22 percent.

Definition of Functional Foods and the World’s first regulatory authority formed in Japan(FOSHU):

In 1983, Japan was the pioneer country in the world to coin the term ‘Functional Food’. By 1990, they established a very well regulatory authority to identify products that are ‘Functional Foods’. By definition, Functional Foods are those foods that bring morphological and physiological positive health-building properties upon regular consumption.


-    Consumer demand nutritious foods that help them attain healthy longevity and decrease their healthcare costs giving them low-cost self-care management solutions to suit their fast-paced lifestyle.

-    Increase ratio in obesity, diabetes, and cardiovascular diseases leaving a heavy economic burden on Gen Z and the millennial population.

-    Protein Trend – Consumers demand more natural protein-rich products to reduce weight and prolong aging for better productivity. 

-    Snacking damages their metabolism leading to many digestive and gut health issues. 

-    Vegan – Due to the rise in Lactose intolerance among the Gen Z population. 

-    Increase in disposable incomes leading to more convenience foods that are nutritious and healthy.

Globally Attributed Market Share:

-    North America is considered one of the largest Functional Food and Natural Health Products markets with a 30 percent market share.

-    Germany is dominating European Functional Food & Natural Health Products holding around 17 percent market share. The Gen Z and millennial consumer base are the keys to contributing market share. 

-    India is dominating South Asia in Functional Food & Natural Health Products holding around 32 percent of the market share. The success is due to the middle-class consumer base being willing to pay more for healthy and nutritious food supplements. 

Challenges Hindering the Growth:

-    Companies marketing health claims without scientific research leading to regulatory approvals. 

-    Lack of Scientific research in combination foods technologies preserving secondary metabolites that attribute to health-building claims. 

-    Lack of regulatory testing on raw materials that deliver the health building claims. 

-    Precise Scientific Testing Methods for secondary metabolites in final combination foods to determine their health-building properties. 

-    The proportion or dosage of functional ingredients in fortified foods may fail to be absorbed in the body due to processing limitations leading to harmful effects of functional foods. 

-    Scientific research is needed in a plant-based polyherbal formulation where many secondary metabolites interact to provide specific health claims.

Way Forward

Established brands are now investing in startups who have been able to bring the innovation factor through their venture providing proven health benefits claims, and bringing price viability to established brands. Startups benefit from the big brands' established distribution channels making it a win-win situation for both. More scientific research is needed in the final product to retain the same claimed health benefit to the consumers. Regulatory authorities need a different, innovative mindset for innovative and understanding functional foods.

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