Most of the companies that I've worked with are continually reformulating their products or launching new product lines to keep up with new trends or consumer demands. Health and Nutrition is definitely one of the top drivers of new formulations or product decisions. Products that target a gut health formula specifically are in huge demand as the relationship of food, our gut health and overall well being becomes more widely understood.
The global market size for gut health promoting products is growing annually in the double digits and the combined market value of pre and probiotics is estimated to reach over $100 Billion by 2030.
In this post we’ll take a brief dive into the gut health and the gut-brain connection, how this has affected the global market, why your brand can and should tap into this market for maximum benefit and some things to keep in mind as you focus your product development strategies.
Why is gut health important?
Gut health has become an increasingly popular area of research and a massive market for the food, beverage, supplement and commercial feed industries. Recent studies have shown that the gut microbiome, which is the collection of microorganisms living in the digestive tract, plays a crucial role in brain function and mental health. In fact, the gut has been called the "second brain" due to the significant influence it has on our mental and emotional well-being.
The Enteric Nervous System (ENS) is the scientific name for our gut microbiome or “second brain” and researchers have found and continue to learn more and more about how this part of your body “talks” with the brain in your head. This is more commonly being referred to as the gut-brain connection.
One of the ways that the gut microbiome affects the brain is through the production of neurotransmitters such as serotonin, dopamine, and GABA. These chemicals are important for regulating mood, sleep, and anxiety, among other functions. When the gut microbiome is imbalanced, it can lead to health issues such as chronic inflammation and IBS which can then lead to a range of mental health issues and is linked to Alzheimer's and Parkinson's. So consumers of all ages are now asking, how do we take care of our gut microbiome?
How are consumers responding to an increased awareness of gut health?
The general population continues to be more aware of the growing body of research looking into the gut-brain connection and the impact of gut health on our overall well being, with consumers seeking out convenient solutions to improve their gut health. One known means to do this is through the consumption of pre and probiotics. This has resulted in a higher demand for functional foods that contain pre and probiotics. Probiotics are live bacteria that can help boost the number of beneficial bacteria in the gut (and reduce bad-bacteria), while prebiotics are types of fiber, like inulin, that feed the beneficial bacteria in the gut.
As such, the probiotics market has an estimated 8.1% compound annual growth rate (CAGR) between 2022 and 2027 to the size of 87.4 Billion by 2027 according to a 2022 MarketsandMarkets analysis report. Just as astonishing is the growth rate and size of the prebiotic market - with a CAGR of 14.9% and a global market size of 21.2 Billion by 2030.
How has the demand for gut health impacted the food industry?
In response, more companies are introducing probiotics and prebiotics into their products, which can help promote a healthy gut microbiome.The increased demand for pre and probiotics worldwide means a significant increase in the R&D of both categories by food, livestock feed and supplement companies. North America and Asia Pacific (specifically China and Japan) are leading the growth in these categories. Research and development efforts are focusing on new and novel delivery methods as well as new or upgraded strains (for probiotics) and more prebiotic offerings.
Supplements are also no longer focusing on just gut health for pre and probiotics, they are becoming more and more targeted with their products, advertising specifically for Women’s health benefits or infants and children.
Interestingly enough, the livestock feed market for pre and probiotics is also growing rapidly due to the negative perception and growing restrictions of antibiotics in global markets. Livestock companies are seeking out alternatives to antibiotics in the forms of pre and probiotics to increase the health of their animals. With the growing production of beef in countries like China, this has significantly impacted the demand for pre and probiotics.
Here are our five reasons why your company should launch products focused on gut health:
Increasing consumer demand for gut health promoting products and functional foods means opportunities for companies to capitalize on.
Potential for long term business growth - CAGR of >14% for the pre and probiotics market and over a $100 Billion combined market value by 2030. Investing in products with gut brain health benefits can be a strategic decision for long-term business growth.
Differentiation or First to Market opportunities - the pre and probiotics market has typically been in the dairy, refrigerated and health foods space. Investing in product launches that offer gut health benefits in novel applications can be a unique selling proposition (USP) that sets a company apart from competitors and helps capture a larger share of the market.
Increasing availability of pre and probiotic ingredients - pre and probiotic ingredients are becoming more widely available as the market matures and suppliers invest in technology and research behind gut health promoting ingredients. This means reduced cost of goods, improvements to the supply chain, and easier market entry for new products.
Premium pricing opportunities - launching products with functional benefits can increase opportunities for your brand to command a higher price point, improving margins and revenue for your company.
How do I formulate products for gut health?
Prebiotics in the form of soluble fiber is the food beverage and supplement industry’s most common means to address the demand for gut health-promoting products. There are different types including polydextrose and maltodextrins, and chicory root fiber, or Inulin. Inulin has added benefits beyond improving gut health as it helps with diabetes and weight management. For product developers, Inulin is a great multi-use ingredient. While it provides the desirable fiber content to meet label claims, it also acts as a fat and sugar replacer and texturizer. It also checks off the “clean label”, “natural” and “plant based” boxes at the same time, a win-win-win for your marketing department. A typical downside of soluble fiber additions to products is their digestive intolerance. Companies are addressing this through extensive R&D on dosing recommendations, other sources of soluble fibers as well as non-fiber based prebiotics. We recommend reaching out to different suppliers to determine what best suits your application type, the costs and supply chain availability.
The world of probiotics is a little different in that it involves live bacteria and yeast cultures. Traditionally, probiotics have been delivered via fermented and cultured products such as yogurt, kefir or kombucha. The main barrier of entry for brands has surrounded maintaining an efficacious count through manufacturing, storage and consumption of your product until the bacteria and/or yeast reach the intestines where they provide their intended benefits. Research and development efforts of suppliers have resulted in more heat stable and pH tolerant strains of bacteria, allowing brands to launch products with probiotics in a wider array of offerings including chocolates, gummies and bars that are also shelf stable. Companies still need to perform rigorous testing and shelf life studies on their products before launching into the market which takes time and investment dollars that need to be considered.
There are other challenges associated with launching products in the pre and probiotic space but with the right R&D most, if not all, can be overcome. Overall the opportunity for brands to launch a pre and probiotic product is becoming easily accessible across different platforms.
Conclusion:
For a lot of brands, investing in gut health products presents a lucrative opportunity due to the growing market demand for functional foods, beverages and supplements that promote gut health. With a combined projected CAGR of over 14% and a market value of over $100 billion by 2030 for the pre and probiotics market, there is still time and space for your company to yield sustained profitability and position your company as a leader in this emerging market. Incorporating gut health benefits into your products can meet consumer demands, drive business growth, and provide differentiation in this expanding market.
Have we convinced you to launch in the gut health space? Reach out to The New Flavor to learn about how we can help.
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