The report, entitled Functional Food and Drink Consumption Trends, valued the European market at US$0.8bn in 2006. The US, meanwhile, which has a population of around 301m compared to the EU's 490m (from January 1, 2007), was valued at $21.3bn.
"This is reflective of the European consumers' preference for natural, unprocessed food, and highlights the untapped potential in European markets," said the market analyst.
Yearly growth for both markets is expected to be in step, at around 5 per cent between 2006 and 2011.
One of Datamonitor's action points in particular reflects the European mindset: manufacturers are urged to "source natural products and incorporate them into functional offerings".
The ageing population means that products targetting specific, chronic health conditions such as osteoporosis and hypertension are driving demand adn provide and attractive opportunity for manufacturers.
Alongside the search for natural products, consumers are said to be seeking out fodos that offer convenience alongside over all-well being.
"With greater time spent commuting and encouraging multi-tasking while travelling and increased propensity for eating and drinking on-the-go, nutraceuticals offer an attractive option for those who wish to act on health concerns but have limited time," wrote the authors.
Datamonitor also reiterated the caveat of an earlier report published in November 2005, in which it said that consumers are often wary of health claims made by food and drink products, as some of the claims made in the past have no scientific basis.
While incoming EU regulation on health and nutrition claims should help address the credibility issue of claims that are permitted, in the meantime Datamonitor says that developing trust should be a corner-stone of a company's nutraceutical position.
"Endorsement by perceived credible sources such as recognised health organisations will aid in curtailing consumer scepticism about information provided by food producers," it said.