Global Smart Food Market - Analysis & Forecast (2017-2022)

Market Overview

Health and wellness have become a matter of priority and concern for the current global population.  Moreover, with the growing number of medical cases such as heart diseases, cancer, osteoporosis, diabetes, strokes, and rising healthcare costs, the consumers are becoming increasingly aware about their diet. Identifying this current growing demand of having a healthy lifestyle, companies across the globe are relentlessly putting in efforts to further develop the otherwise stagnating food and fast moving consumer goods (FMCG) industry. The companies have come up with a ‘smart food’ segment in their existing product portfolios, marketing them as products which assist in preventing diseases or improve health conditions, thereby further reducing the healthcare costs.

There exists a certain degree of ambiguity related to the meaning and definition of smart foods across the globe. These are the food products which have been developed through invention or new improved processes, and exclude the changes that take place naturally in the food. The smart food market is a combination of different types of foods such as functional foods, encapsulated foods, genetically modified foods, and others (analogue and novel foods). Besides the health benefits that influence a consumer’s  purchasing decision, other factors which are driving consumer interests towards smart food products include age,  location, education, gender, price, income levels, knowledge and beliefs.

The market is expected to progress at a substantial rate due to the ever growing health related concerns among the global population. The growth for this market is being driven by factors such as:

•    Increasing health consciousness among the population
•    Growing R&D in food industry
•    Introduction of newer food preservation techniques
•    The rising healthcare costs

However, the market consists of certain challenges which are inhibiting the overall growth for the global smart food market:

•    Fragmented nature of the market
•    Lack of awareness about smart foods
•    High cost of products hindering mass adoption

The smart food market is expected to grow from $325.26 billion in the year 2016, at a CAGR of 8.32% from 2017 to 2022. This growth is attributed to the increasing awareness among consumers about health and balanced diet and also the changing dietary patterns according to modern lifestyle. Moreover, the rising healthcare costs has also driven the growth of this market.

The concept of smart food market revolves around the major food types prevailing in the market such as: functional foods, encapsulated foods, genetically modified foods, and others (including analogue food and novel foods). Further, this market provides the consumers with nutritious and healthy alternatives in the form of various end-products. These cover all the key end products ranging from bakery products, confectionary, dairy products, dietary supplements, meat products, beverages and others (including frozen products and fruits & vegetables). Dairy Products are expected to generate the maximum revenue due to the increased consumption of these products across the globe and the benefits arriving out of these products.

The trends of the smart food market vary with different geographical regions. The smart food market holds a prominent share in various countries of Asia-Pacific (APAC), North America, Europe and Rest of the World (R.O.W.). Asia-Pacific dominated the market, followed by North America, due to the increasing disposable income among consumers, especially in countries such as India and China. Moreover, the region is expected to grow at the highest CAGR by the forecast period due to reasons such as growing urbanization, growing baby boomer population and changing dietary patterns.

The competitive landscape for the smart food market demonstrates an inclination towards companies adopting strategies such as mergers & acquisitions and business expansions. The major established players in the market, are focusing more on mergers & acquisitions to introduce new forms of innovations and different set of food products. Ingredion, Cargill Inc., Balchem Corporation, Sensient Technologies, Symrise, and Kerry Group were the most prominent names that surfaced in 2016 in this regard. These companies underwent a range of mergers & acquisitions and launched various new products.

The need for more R&D and appropriate regulatory environments is a prerequisite for sustained growth of this market. Various government and private research institutes, and regulatory bodies and associations are putting in substantial efforts to identifying how smart foods can be beneficial for the human health. Further growth of this market depends on the food industry’s ability to develop new and effective products along with meeting the consumer demands.