The global market for functional foods is growing rapidly, with children and teenagers emerging as the key drivers. According to Food Navigator, the functional food segment is already valued at $437 billion (€374 billion) and could grow to $983 billion by 2034, with dairy products for the Alpha and Beta generations playing a significant role in this.

Dairy products are among the fastest-growing sectors

The functional products segment is growing rapidly in the snack, beverage and dairy categories.

Milk producers are already adapting to the new demand by offering:

  • fortified milk;
  • probiotic yoghurts;
  • children’s dairy products with added functional benefits.

Major players, including Nestlé, Danone and Arla Foods, have already joined in the development of this sector.

New demand: health and development

Modern parents are increasingly choosing foods that not only fill them up but also nourish them:

  • immunity;
  • cognitive development;
  • indigestion;
  • children’s growth.

This is changing the very approach to the production of dairy products, which are shifting from basic nutrition to functional nutrition.

“Functional baby food has evolved from a premium product into the accepted market standard, particularly in the infant formula sector,” notes Rohit Nandurkar, an analyst at Mordor Intelligence.

According to him, there is rapidly growing demand in the infant milk products segment for follow-on formula, which continues the trend towards more varied nutrition after the breastfeeding stage.

Common ingredients in dairy products

The following ingredients are increasingly being used in functional dairy products:

  • probiotics (Bifidobacterium, Lactobacillus);
  • MFGM (milk fat globule membrane);
  • omega-3 fatty acids;
  • vitamins (particularly D and the B vitamins).

These ingredients are associated with supporting digestion, the immune system and brain development, making them appealing to parents.

Challenges for manufacturers

Despite this growth, the production of functional dairy products for children faces a number of challenges:

  • strict regulation, particularly in Europe;
  • the high cost of ingredients and research;
  • safety and consumer confidence requirements;
  • the difficulty of preserving flavour and texture.

Even minor changes to the recipe can affect how children perceive the product, which increases the risks for manufacturers.

The new market standard

Functionality is gradually becoming less of a premium feature and more of a basic requirement for products, particularly in the dairy sector.

As the Alpha and Beta generations grow up, manufacturers who can combine health benefits, taste and affordability will gain a competitive edge.

Source: Food Navigator