Research by Goldman Sachs found that (kombucha-swigging) millennials and Generation Z exercise more, eat more healthily, and smoke less than previous generations. Those born after 1980 make up a quarter of the world’s population and are the principal buyers of fortified foods, prebiotics, and probiotics.
That healthy living is driving a boom in sales of functional foods and beverages and companies are rushing to meet the surging demand.
In Asia, sales of functional foods are projected to grow from $51 billion in 2019 to $71 billion in 2025, according to a report by ResearchAndMarkets.com. It attributes the rise to increased disposable income, greater access to products and a rising number of major players releasing innovative products.
Also driving the demand is the rising incidence of chronic diseases linked to poor diets and stressful lifestyles. That has pushed more consumers to seek health benefits from their dietary choices, notably from ingredients like adaptogens.
Adoption is helped by a long tradition of using food as tonics and therapy, such as in Traditional Chinese Medicine and Indian Ayurveda. The pandemic has also given the industry an added boost as demand surged for immunity-boosting food and beverages.
In Japan, functional foods are widely available, and it’s a common practice for office workers and students to buy fortified drinks from convenience stores for an energy and immunity boost. Hangover cures and guilt-free treats (low or no sugar/fat snacks and desserts) are also popular categories. There’s also huge demand for functional foods that contain ingredients that claim to support beauty and fight aging.
“In the era of high incidence of chronic diseases and the era of rising lifestyle diseases, functional foods are very important and may play a role in treating diseases before they occur,” said Zhai Fengying, former executive vice chairman and secretary-general of the Chinese Nutrition Society, according to Sohu News. “It will prevent various diseases and assist clinical practice.”

Regulators in the region have been approving more use of functional foods. In January, China’s National Health Commission approved sodium hyaluronate as an additive to foods, providing a boon for “beauty-from-within” foods, beverages and supplements that offer to improve physical appearance.
Earlier this year, South Korea’s Ministry of Food and Drug Safety approved functional labeling for general foods as long as there is sufficient scientific evidence to back up the claims. Among the functional raw materials that have been approved for use include ginseng, chlorella and spirulina.
Given the growing demand, Western multinationals like Nestle, Coca-Cola, Unilever, GlaxoSmithKline, General Mills, and homegrown Asian brands are pushing for a slice of the market.
Japan’s Yakult Honsha (behind the popular probiotic milk beverage Yakult), Meiji, Otsuka Pharmaceutical, and Suntory are established players in the functional food market, while China’s Shenzhen Eastroc Beverage Industry and Thailand’s TC Pharmaceutical Industries are also incredibly popular.
There is also a new breed of direct-to-consumer brands that have utilized the power of social media to build communities and market their products. In China, functional food brands like WonderLab, Minayo, BUFFX and Nelo have built large followings among younger consumers and are raising money from venture capital firms to fund their expansion