Industry Insights · 12min read

Dietary Supplements, Nutraceuticals & Functional Foods: European Market Growth

The coronavirus pandemic is fuelling the demand for products that support human health.

What are dietary supplements? 
Dietary supplements are concentrated sources of nutrients derived from foods, isolated nutrients, or food-like substances to improve health. They are generally packaged in ‘non food’ forms, such as pills, capsules or tablets, to be consumed in specific dosages. Their main aims include supporting physiological functions, ensuring adequate nutrient-intake and counteracting nutrient deficiencies. 
What are nutraceuticals? 
Nutraceuticals are defined as medicinally or nutritionally functional foods. Although they are made entirely from whole foods which are said to improve health, nutraceuticals are generally packaged in non-food formats, such as pills or capsules. Synonyms of nutraceuticals include ‘medical foods’, ‘designer foods’ and ‘phytochemicals’. Nutraceuticals are generally considered to be part of the “dietary supplements” category.
What are functional foods?
In contrast to nutraceuticals, functional foods maintain their initial food formats and are merely modified or fortified to maximise their nutritional benefits. Arguably, most whole foods can be classified as ‘conventional functional foods’ as their nutrient content and composition promise health benefits. In most cases, however, the specific term ‘fortified functional foods’ refers to natural foods in an enhanced form



What levels of growth are predicted for these markets?

The dietary supplements, nutraceuticals and functional foods markets are all experiencing steady to significant growth. While initial prognoses estimated that from 2020-2025 the European dietary supplements market would grow at a CAGR of 6.5%, more recent studies are projecting a CAGR of 9.3%. Within this market, Italy is expected to emerge from this growth spurt with the largest shares while the United Kingdom and France are also expected to see significant surges. Meanwhile, for the forecast period of 2019 - 2027 for nutraceuticals, Europe is predicted to demonstrate the highest growth globally with a CAGR of 6.95%. Within this space, Germany clearly dominates the market with the highest revenues. Unsurprisingly, Germany also boasts the largest functional foods market in Europe. Interestingly, within this market, the functional drinks segment—which includes dairy, fruit and vegetable beverages, probiotic, energy and sports drinks as well as meal replacers and caffeinated beverages—is currently witnessing the fastest growth on the European continent.


What trends and behaviours are driving this growth?

Grand View Research cites consumer awareness about the importance of healthy lifestyle choices which include food, nutrition, physical exercise, and mental and physical wellbeing are listed as key drivers. This awareness goes hand in hand with the increasing demand for ‘natural’ and ‘clean label’ products, foods and ingredients which steer clear of the use of chemicals. Market Data Forecast also lists the rise in chronic diseases, such as obesity and diabetes, as underlying growth factors.

In response to the rising demand, the supply has also increased thereby leading to an overall increase in product availability and visibility in health food shops, pharmacies and even regular supermarkets. This has also triggered expansive product diversification resulting in increased competition across all markets. An especially exciting new emergence is the arrival of personalised online services in which consumers can get customised recommendations and create lists based on their specific health and nutritional needs. Tools such as these become even more valuable in light of the pandemic, which experts, including Hartman CEO, Laurie Demeritt, believe is inspiring individuals to become more empowered and seize control of their own health.


How is the coronavirus pandemic impacting growth and trends in these markets?

Though research around this is still very much in its early stages, one thing is certain—the pandemic is fuelling growth in unprecedented numbers. As early as April, first studies revealed that around 31% of consumers declared that they were incorporating supplements into their diets while 29% claimed they were actively consuming higher levels of functional foods and beverages. Though these estimates were taken from a study which was conducted with US-American consumer-base, it is safe to assume similar consumer behaviour amongst European consumer bases. A twenty-minute webinar outlining more highlights from the Functional Food & Beverage 2020 Report from the Hartman Group can be found here. Similar findings were reported, for example, by the SIRIO Group in Europe, where data from across the content showed that both small and large food supplement retailers had experienced drastic increases in the demand for supplements which correlated directly with the outbreak of the pandemic.

The underlying beliefs triggering consumer behaviour were recently substantiated by the scientific community, an act which is only likely to propel growth even further. In August 2020, Global News Wire aptly summarised findings published by Fortune Business Insights, “A study conducted by researchers from the University Medical Center in the Netherlands, the University of Otago in New Zealand, the University of Southampton in the UK, and the Oregon State University in the US found that vitamins C & D, and DHA, an Omega-3 fatty acid found in fish, can significantly boost immune function. A strong immune system is critical in fighting the COVID-19 infection and as the pandemic continues its rampage across Europe, the demand for dietary supplements is set to spike in the region.” As the end of the year closes in and the pandemic rages on, we only expect these numbers to grow and look forward to the 2020 market data that will be revealed at the end of the fiscal year.

Imagery: (1) Adam Niescioruk, (2) Angel Sinigersky, (3) Aj Alao and (4) Elsa Olofsson via

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