Despite featuring a highly competitive vendor landscape owing to the presence of a large number of companies spread across the globe manufacturing a variety of nutraceutical products, only a handful of companies accounted for over half of the global nutraceuticals market in 2014, observes Transparency Market Research in a recent report. The top four players in the market, namely Groupe Danone S.A., BASF SE, Nestle S.A., and Royal DSM N.V. collectively held nearly 52% of the market in 2014. The market is largely price sensitive and intensely competitive and companies are being forced to find new growth avenues across emerging markets to remain profitable.
According to the report, the global nutraceuticals market is expected to expand at a 7.30% CAGR from 2015 to 2021, rising to a valuation of US$278.96 bn by 2021.
North America Remains Leading Regional Market for Nutraceuticals
Geographically, the North America nutraceuticals market held the dominant share of nearly 40% in the overall market in 2014. The high level of health-related awareness among the population and high disposable incomes can be chiefly attributed to the region’s dominant position in the global nutraceuticals market. In terms of product type, the segment of functional food accounted for the dominant share in the overall market, accounting for over 31% of the overall market in 2014 in terms of revenue contribution to the global market.
Rising Awareness about Healthcare amongst Global Population to Increase Uptake of Nutraceuticals
The global nutraceuticals market is observing increasing demand for its products owing to factors such as rising geriatric population of the globe, the rising awareness about benefits of a healthy lifestyle, and the numerous benefits of nutraceuticals. The mounting numbers of obese and diabetic people globally are also contributing to the increased demand for nutraceuticals. Despite the market contributing to less than 10% to the global food industry, growth opportunities exist and can be benefitted from if companies focus on proper business partnership models and adapt to constantly changing regulatory frameworks and consumer preferences. The market could also benefit from the increased affordability of nutraceuticals and improving media penetration in emerging economies across regions such as Latin America and Asia Pacific.
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High Costs of Products Could Hamper Market Growth to a Degree
The market’s growth is, however, restrained to a certain degree owing to factors such as threat of contamination of ingredients and raw materials, the potential ill-effects of certain products to human health, and lack of awareness about nutraceuticals in developing economies. The high costs of nutraceuticals is also a leading factor holding back the market from achieving its full potential, especially across certain regions with low capita incomes. Moreover, high raw material costs and low profit margins, along with problems involved in the process of maintaining safety, effectiveness, and quality of product add to challenges that companies in the global nutraceuticals market face.