Functional Flours Market - Forecast(2023 - 2028)

Functional Flours Market Overview

Functional Flours Market Size is estimated to reach $82.9 billion by 2027 and is poised to grow at a CAGR of 7.3% over the forecast period of 2022-2027. Functional flour is hydro-thermally treated as specialty flours and it is used in a variety of applications in the food and beverage industry. It is primarily produced from maize, rice, wheat and others and is mostly used in bakery products like bread-making, cakes, snacks, culinary products, nutrition and many others. Functional flour is known to improve the texture, appearance and nutritional profile of added products. They have certain properties like protein-rich and gluten-free, making them specialty flour like wheat flour. It also has binding properties like hot and cold binding. It is categorized into different types, depending on the raw material used. Owing to such various applications of functional flour in the food & beverage industry and their nutritional properties, many governments and organization promote the usage of functional flours. For instance, the fortification of flour was widely encouraged and made possible by the associations of industrial millers throughout Latin America and the Caribbean. Also, in March 2021, NuShakti launches home food fortification products in Kerala, India. Such innovative products available in the market and rising demand for functional pre-cooked flour products fuel the growth of the Functional Flours Industry over the forecast period 2022-2027.

Functional Flours Market Report Coverage

The report: “Functional Flours Market Forecast (2022-2027)" by Industry ARC, covers an in-depth analysis of the following segments in the Functional Flours Market.

Key Takeaways

• Geographically, North America held a dominant market share in the year 2021, owing to the increasing demand for nutritious food and growing health concern among consumers, thereby propelling the growth of Functional Flours market size in this region.
• The global demand for Functional Flours is anticipated to increase owing to the rising demand for functional foods such as ready-to-eat or on-the-go food products and the growing use of Functional Flours in the bakery industry.
• However, disruption in the supply chain and unavailability of raw materials may limit market growth over the forecast period 2022-2027.
• A detailed analysis of strengths, weaknesses, opportunities and threats would be provided in the Functional Flours Market Report.

Functional Flours Market: Market Share (%) by region, 2021

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Functional Flours Market Segment Analysis - by Raw Material

The Functional Flours Market based on raw materials can be further segmented into Non-Food Applications, Bakery Products, Noodles and Pasta and others. Wheat held a dominant market share in 2021. The use of wheat in various bakery products due to its impressive properties such as structure building, lipid absorption and others is one of the major reasons for its popularity. Whole wheat flour is used to manufacture various bakery goods such as bread, cookies, crackers and other bakery products. Products made from whole wheat flour have a denser crumb, a darker look and rich flavor than regular wheat flour. Such properties of wheat flour and its numerous applications in the bakery industry would propel the growth of the Functional Flours Market Share. 

However, rice is estimated to grow with the highest CAGR of 8.5% over the forecast period 2022-2027. Increasing demand for noodles and desserts contributes to the growth of the rice segment. The availability of noodles in various tastes and types would favor the market growth. According to the World Instant Noodles Association, the demand for instant noodles was highest in China, which was 43990 million servings in 2021. A busy lifestyle and varieties of noodles available in the market make instant noodles a global food that supports the diets of people around the world. It is consumed in more than 100 billion servings annually. Such growing demand for noodles and other products made from rice flour fuels the growth of the Functional Flours Market Share over the forecast period 2022-2027.

Functional Flours Market Segment Analysis - by Type

Functional Flours Market based on the types can be further segmented into Speciality Flour, Fortified Flour and Pre-Cooked Flour. The Pre-Cooked Flour segment held a dominant market share in the year 2021. There is growing demand for ready-to-eat products such as noodles and pasta due to the variety of ranges available in this category. According to the International Pasta Organisation, a total of 17.3 million tonnes of pasta was produced in the world in 2021. As per Vietnam Investment Review, in 2020, a total of 7.03 billion instant noodles packages are consumed in Vietnam and it held the third rank in consumption of noodles after China and Indonesia. The growing popularity of ready-to-eat products made up of pre-cooked flour drive the growth of the Functional Flours Market Share.

 However, Speciality flour is estimated to grow with the fastest CAGR of 9.8% over the forecast period 2022-2027. There's a growing demand for a variety of specialty bakery products and the increasing use of specialty flours in the bakery industry. Specialty flours are used in the production of bread, cakes & pastries, donuts & rolls, cookies and other bakery products. The use of specialty flours offers nutritional benefits to consumers. Hence the demand for products with functional ingredients is increased. Such growing demand for specialty flours bakery products propels the growth of the Functional Flours market share during the forecast period 2022-2027.

Functional Flours Market Segment Analysis - by Geography

The Functional Flours Market based on Geography can be further segmented into North America, Europe, Asia-Pacific, South America and the Rest of the World. North America held a dominant market share of 31% in 2021. The reasons are the increasing demand for functional foods and raising awareness in consumers about the nutritional quality of food. According to the Institute of Food Technologists (IFT) and Nutritional Business Journal, U.S., functional food and drink sales were $83 billion in 2021, which was an increase of 6.8% compared to the previous year. Such growing demand for functional food drives the growth of North America Functional Flours Market Size.

Furthermore, Asia-Pacific is estimated to grow with the fastest CAGR over the forecast period 2022-2027. This is caused by the growing bakery industry in this region. As a bakery and sweet goods are popular in Asia and account for a high market share, they contribute massively to the growth of the Functional Flours Industry. In January 2022, Turkey's largest B2B flour miller Ulusoy acquired Söke Degirmencilik Sanayi ve Ticaret A, a popular flour brand in Turkey. Also, an increase in the production of cereals in this region supports market growth. Nutri-cereals production in India in 2021-2022 is estimated at 49.86 million tonnes which is higher by 3.28 million tonnes, as per the second advanced estimate of production released by the Ministry of Agriculture and Farmers Welfare in February 2022. Such availability of raw materials, expansion of millers and growing demand for functional flour in the bakery industry would fuel the growth of Functional Flours Market Size.

Functional Flours Market Drivers:

Growing Demand for Gluten-free Products Drives the Market Growth:

The growing demand for gluten-free products is driven by the rising prevalence of celiac disease and growing consumer awareness. According to Beyond Celiac, about 1% of the American population is living with celiac disease and about 83% of Americans who have celiac are undiagnosed or misdiagnosed with other conditions. From screening programs in Italy, the prevalence of celiac disease was found in 1.6% of children. Such a growing prevalence of celiac disease creates global demand for gluten-free products in the market. Owing to such global demand for gluten-free products, key market players launched various products. For instance, in April 2022, gluten-free millet products were introduced for all age groups. Products include cream biscuits, salt biscuits, milk biscuits, ragi peanut butter, jowar peanut butter, jowar upma, khichadi and millet malts (jowar, ragi and bajra). Their prices range from Rs 5 to Rs 15. Such growing demand for gluten-free products and innovative products available in the market helps to drive the Functional Flours Industry.

Increasing Demand for Ready-to-Eat Products Enhances the Global Product Demand:

A growing working population and the rising share of women in employment are believed to drive the market growth. A growing working population and very little time to prepare meals or breakfast create demand for ready-to-eat products to save time. Owing to global demand for ready-to-eat food, key market players launched new innovative products in the market to catch customers and generate profitable revenue. According to HelloFresh, a leading ready-to-eat food company in the U.S., they generated $916 million in the fourth quarter of 2021 and that was a 40% up in year-on-year growth. Also, the company has 3.5 million active customers in the U.S. In the fourth quarter of 2021, it saw a 35% increase in the US market as compared to 2.6 million in 2020. Such growing demand for ready-to-eat products in the market drives the growth of the Functional Flours Industry over the forecast period 2022-2027.

Functional Flours Market Challenge:

High Price of Raw Materials and Disruption of Supply Chain

Prices for raw materials such as cereals, pulses and flour are touching the sky, owing to the ongoing Russia-Ukraine war. Also, some major producers like India are focused on securing their needs and restrict the export of business-to-business sales of wheat. The price of wheat per bushel in the U.S. was $9.7 in June 2022 and is estimated to grow to $10.75. According to International Flavour & Fragrances (IFF), the weather, rising fuel prices and the unresolved Ukrainian conflict are expected to have an impact not just on the 2022 wheat harvest but also on sowing for 2023 and even 2024. Such factors would raise the price of flour and may hamper Functional Flours Market Growth.

Functional Flours Industry Outlook:

Product launches, mergers and acquisitions, joint ventures and geographical expansions are key strategies adopted by players in the Functional Flours Market. The top 10 companies in the Functional Flours Market are:

1. Cargill, Incorporated 
2.  Archer Daniels Midland Company
3.  Bunge Limited 
4.  Associated British Foods plc 
5.  General Mills Inc. 
6.  The Scoular Company 
7.  AGRANA Beteiligungs-AG 
8.  The Hain Celestial Group Inc.
9.  SunOpta Inc.
10.  Parrish and Heimbecker Limited

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