The North American nutraceutical ingredients market is on a trajectory of significant expansion, with an estimated value projected to reach USD 45.5 billion by 2029 from the 2024 valuation of USD 35.6 billion, displaying a promising Compound Annual Growth Rate (CAGR) of 5.1%. The North American region holds the potential for consuming nutraceutical ingredients and is expected to play an important role in the global market. This is attributed to the prevalence of chronic diseases due to a hectic lifestyle and increased consumer awareness about the health benefits of nutraceutical ingredients. American consumers are calorie-conscious, which makes low-calorie and low-fat foods popular in the US and Canada. Additionally, as consumers become aware of the health benefits of prebiotics and their significance in weight management, the demand for nutraceutical-based products increases. North America has the highest prevalence of obesity, further driving the demand for nutraceutical ingredients.
The market for nutraceutical ingredients in North America is moving toward maturity, due to which it has witnessed steady growth. The nutraceutical ingredients market in this region invests more in research programs to introduce new ingredients to meet the demands of varied applications and potential customers. Key market players in the North American nutraceutical ingredients market include Cargill, Incorporated (US), ADM (US), International Flavors & Fragrances Inc. (US), and Ingredion (US). These industry players have their R&D centers where they develop a wide range of nutraceutical ingredients for the feed, food. beverage, and dietary supplements industry. These demand side companies then further introduce new products that meet the consumer demands. For instance, in July 2020, Danone (US) added the children’s yogurt brands, Danimal and Super Danimal, to its North American portfolio.
Market Dynamics
Drivers:
Growing demand for fortified food due to increased health consciousness among consumers
The awareness of the diet–health relationship among the current consumer has seen an increase in activities like seeking products that will offer more than the physical offering of the product. Increasingly, fortified and enriched foods with nutraceutical ingredients such as omega-3 fatty acids, antioxidants, and prebiotics now offer targeted health benefits such as heart health, immune enhancement, and improvement of digestive health. The trend is more marked in countries like the US and Canada, where wellness and preventive healthcare are really driven home. To that end, manufacturers are including these ingredients in everything from beverages and snacks to dietary supplements.
Product offerings that are being demanded more include weight management, heart health, muscle recovery, energy, endurance, bone health, and beauty support, among others, all in the context of nurturing bodies for long-term health and beauty goals.
Moreover, government initiatives to support health and well-being, combined with innovation in food processing technologies, continue to propel the market. All these factors together encourage the development of new products in the nutraceutical segment to cater to the changing preferences of health-conscious consumers around the globe. Supplier and manufacturer collaborations of food products with nutraceutical ingredients are going to increase with the increasing market, bringing forward new products in the market, and this will increase the level of competition.
Restraints:
Higher costs of fortified products dissuade large-scale usage and adoption
Higher costs are a key barrier to the broadening use of nutraceutical ingredients within fortified products. Such products, enriched in essential vitamins, minerals, or bioactive compounds, entail extra processing and sourcing expenses for the ingredients involved. For that matter, most consumers are particularly in lower economic areas or price-sensitive markets, buyers of such goods cannot afford to purchase them on a continuous basis. It's also difficult for manufacturing firms to increase output and stay affordable. This is due to the complex and costly process involved in sourcing and integrating quality nutraceutical ingredients. The ingredients are normally derived from natural sources, some of which are rather acquired through specialized modes of extraction and form a big bulk of the production cost.
Moreover, regulatory and quality compliance have associated costs that increase final product prices. By locking premium pricing into the market for fortified products, they further limit accessibility, in particular in developing regions with high levels of malnutrition and dietary deficiency. On the other hand, government subsidies or incentives for fortified foods and beverages could lower cost barriers such as these, yet these have been variably introduced and maintained.
Opportunities:
Nutraceuticals as alternatives for pharmaceuticals
Nutraceuticals, regarded as viable alternatives to pharmaceuticals, offer substantial prospects within the nutraceutical ingredients market. The shift is brought about by an increased consumer preference for natural and preventive healthcare remedies as opposed to synthetic drugs. Vitamins, minerals, herbal extracts, and probiotics are all considered nutraceuticals. These are perceived to be safer, with fewer side effects; this perception increases their attractiveness.
With the increased cases of chronic diseases and an aging population, the demand for health-promoting products is surging. For instance, the World Health Organization approximates that by the year 2030, one in every six people in the world will be 60 years or older. As such, consumers are using nutraceuticals in the management of certain ailments like cardiovascular diseases, diabetes, and gastrointestinal problems. This has further pushed huge investments in R&D for innovative ingredients like plant-based compounds and bioactive peptides, thus fueling further market growth.
Besides, there has been a regulatory support and acknowledgment related to health benefits derived from nutraceuticals. From the product viewpoint, the regulatory bodies like FDA have so far been successful in setting up guidelines related to health claims, motivating more companies to develop and market nutraceutical products further. In these, the role of technological development in the extraction and formulation processes has also been quite instrumental. Methods such as microencapsulation and nanotechnology increase the bioavailability and effectiveness of nutraceutical ingredients to make them competitive with pharmaceuticals.
Challenges:
Combating counterfeiting and adulteration in the nutraceutical industry
Fraud and counterfeiting are very serious issues for nutraceuticals and affect market integrity and consumer confidence. Nutraceuticals have enjoyed heightened interest of late due to added health claims associated with their use, but without the tight regulative controls in force for pharmaceuticals. The lack of regulation makes the products highly prone to adulteration, counterfeiting, and diversion through complex supply chains.
Adulteration normally involves substitution or dilution of active ingredients with a view to deceiving the customer about a product's efficacy. Several studies have found worrying levels of mislabeling, including cases in which botanicals contained cheaper substitutes or undisclosed additives, thus compromising safety and effectiveness. For instance, according to an article by Food Fraud Advisors published in 2020, a survey in the USA found that 53% of raw botanical plant parts and powders contained plant material that did not match the label. The same article noted reports of cranberry extracts adulterated with grape seed extracts and other supplements spiked with undisclosed pharmaceuticals like steroids or stimulants.
Counterfeiting aggravates the problem by creating counterfeit products that look like the originals, typically containing inferior or no active ingredients at all. Such products not only dupe consumers but also erode the goodwill and profit of genuine businesses. With growing demand for supplements that are health-enhancing, comes the challenge that originates from guaranteeing product authenticity in order to maintain customer confidence in the industry. Controls through stricter regulation and more sophisticated anti-counterfeit technologies are necessary to protect the nutraceutical marketplace from such wide-ranging and damaging fraud.
Proteins, By Type, Accounted For The Highest Market Share Among Type Segment
Proteins are important for human health in that they provide for muscle-building purposes, repair of tissues, the production of enzymes, and the immune system. With such a high nutritional value, they are incorporated into all kinds of products: food and beverages, dietary supplements, or animal feed. Consumer trends continue to amplify the demand for protein-enriched products. Flexitarianism and preference towards plant-based alternatives in North America increase the demand for plant proteins within mainstream markets. Such proteins easily attract the attention of health-conscious consumers who are after sustainability, ethics, and diversity in diet. They also find a niche in specialized nutrition products like sports nutrition and baby formulas, where proteins from dairy have a good value attached, since they are fast in absorption and build up muscularly. This segment is further supported by developments in protein fortification technologies that help manufacturers cater to different consumer needs for functional foods and customized nutrition solutions.
Dry, By Form, Accounted for The Highest Market Share And Is The Fastest-Growing Market In The Nutraceutical Ingredients Market
Compared with liquids, dry forms have more significant advantages in stability and shelf-life. This stability is particularly relevant to the preservation of potency and efficacy of certain sensitive bioactive ingredients, including vitamins, minerals, and botanical extracts commonly used in nutraceutical products. Moreover, dry ingredients are also convenient to manipulate, transport, and store; hence, there are unlikely to raise any logistical complexities or costs along a supply chain. Manufacturers looking to maximize operational efficiency and reduce waste will find them especially appealing because of this.
Furthermore, dry ingredients segment finds broad applicability in a number of formats, from capsules to tablets and powdered beverages, thereby meeting these diverse ranges of consumers' preferences and consumption habits. Also, the dry segment easily caters to the growing consumer preference for convenience and ease of use in dietary supplements and functional foods. For instance, powders and dry granules can be mixed into beverages, baked goods, and other food products without altering the texture or taste thereof to any large degree, thereby maintaining consumer acceptance.
Canada Is The Fastest-Growing Market For Nutraceutical Ingredients Among The Regions.
Nutraceutical products are regulated by the Natural Health Products Regulations in Canada. The products must have a product and manufacturing site license to be sold in Canada. The major driving factor for nutraceutical ingredients is the high prevalence of inadequate vitamin D and calcium levels in Canadians, which provides growth opportunities for fortified food and dietary supplement manufacturers in the country. The growth of the food industry and the increased usage of healthy food additives in the country have further driven the market for nutraceutical ingredients. Several factors are responsible for changing consumer attitudes toward foods and reshaping food supply trends. These include the aging population, consumer’s desire to enhance personal health, and the growing awareness that diets can alter disease prevalence and progression. In response to the growing demand for functional foods, Health Canada has developed policies and regulations governing health claims for food.
Key Market Players
The key players in this market include Cargill, Incorporated (US), ADM (US), International Flavors & Fragrances Inc. (US), Ingredion (US). Other global companies also have presence in the North American region such as BASF SE (Germany), Arla Foods amba (Denmark), Associated British Foods plc (UK), dsm-firmenich (Switzerland), Tate & Lyle (UK), Ajinomoto Co., Inc. (Japan), and Chr. Hansen A/S (Denmark).
