According to data from Nutrition Business Journal and SPINs presented by New Hope Network content team lead Carlotta Mast March 2, sales of functional foods and beverages grew 9% to nearly $78b in 2020 – and while strong, the category “did not fare quite as well from a growth standpoint” as organic foods and beverages, which NBJ estimates grew 13% to $47.9b.
Combined, sales of natural, organic and functional foods and beverages jumped 13% to $186b in 2020, helping to push the overall natural and organic products industry’s sales up a record-breaking 12.7% to $259b across all categories – far outpacing the 9.5% growth to $252b predicted in August, Mast said.
Much of this growth came from the “dramatic shift to eating more meals at home, through the quarantine, and surging consumer interest in healthier foods and beverages, and health and wellness products,” she explained.
And while Mast said these numbers suggest a “bright future” for the natural and organic industry overall, she noted the growth difference between organic and functional products was stark and likely related to the types of offerings available.
Decline in grab-and-go categories drag down functional product sales
Functional ingredients often are incorporated in ready-to-drink beverages and single-serve, grab-and-go offerings where their higher costs can be offset by smaller pack sizes or selected for specific life moments, such as feeling under the weather, needing a brain boost to make it through the afternoon at the office or a shot of energy for after school or work fitness activities.