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Global functional food and beverage market
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Consumers want to enjoy it all. Why not manufacturers too?

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With a global functional food and beverage market now standing at US$ 280 billion (and rising), life is certainly never dull for manufacturers in this industry.1

The world’s population is growing and demand is rising (did you know that nearly 26,000 new dairy products came to market last year?). Furthermore, this demand increasingly comes from a generation of consumers who value the things that matter to us all – like health & wellbeing and tackling climate change. It represents a huge opportunity for manufacturers, but also a challenge.

The opportunity for manufacturers comes in meeting the ever-evolving consumer demand for products that deliver the keystones of greater taste, texture and health (for both people and planet). The challenge? Getting these products into consumers’ hands faster than the competition; and producing them more efficiently, consistently, sustainably – and of course, profitably. Consumers want - and deserve - to enjoy it all. But so too do the brands that serve them. It’s not an easy job, but it can be achieved.

The keystones of consumer preference: Taste, texture and health

So how does a food and beverage brand differentiate its offerings and stand out from, say, the other 25,999 dairy products launched that year? DSM provides a total solution to food and beverage customers that includes nutritional and functional ingredients, combined with expertise and experience stretching over 150 years: in everything from dairy and baking to savory foods, beverage and brewing, confectionery and fruit, and plant-based protein alternatives. Based on this first-hand experience – plus proprietary research (further validated by trusted third party data), they now see four consumer preference keystones.

Taste: ​It’s always been king, but good to have this confirmed. Shoppers continue to prize taste more than any other product characteristic when buying food (33%).2​ In fact, DSM research reveals that 65% of consumers are looking for better taste in their products.3​  For example, 42% of consumers surveyed thought that plant-based food and drink tastes ‘bland and boring’.4​ For manufacturers, this is not just about ​adding and building taste (which DSM achieves in savory applications, for example, with yeast extracts); but also removing undesirable taste (in applications like cheese, where they nullify off-flavors with cultures and enzymes).

Texture:​ Increasingly, texture is becoming more important in all kinds of applications as an important ‘influencer’ to taste - and a valuable part of the whole sensory experience. This is not just in a moist bite of bouncy bread or indulgent, creamy yogurts but also, for example, in the new generation of plant-based dairy, meat and fish alternatives – where grainy milk substitutes and dry meat analogues deter consumers. In fact, DSM research found that 43%5​ of dairy reducers who don’t consume dairy alternatives state that this is because they don’t like the texture or taste of these products. Hence, the latest innovation from DSM in plant-based protein, called CanolaPRO, has undergone extensive work from the technical team to enable a fatty, juicy mouthfeel that consumers desire (minus the fat.)

Health & wellbeing: ​DSM research reveals that 60% of consumers are now actively seeking added vitamins and nutrients in the products they buy.2​ The age of fortification is upon us, but the addition of nutrients like Omega-3 and Vitamin D needs to be seamless and convenient for both consumer and manufacturer alike. For example, a new generation of energy drinks is now hitting the shelves aimed at the two-thirds of global consumers who are concerned about lack of energy6​. DSM not only helps manufacturers improve the taste, texture (and color) of these products, but it also boosts the nutritional profile in an efficient and streamlined way – for example through nutritional premix blends, easily available worldwide. This is a key point because ultimately it can be quite some challenge for food and beverage manufacturers to get consistently ahead of nutrition trends when working with fragmented ingredient suppliers. The ability to work with one company to improve nutritional value across a wide range of applications on a global scale – for example by adding front-label claims like ‘Source of Omega-3’ or 'High in vitamin D’ labels – is extremely valuable.

As with taste and texture, it’s also about removing undesired ingredients from products: whether it be emulsifiers in bread; acrylamide in biscuits, cookies and snacks, or salt, sugar and fat across-the-board (all areas where DSM supports manufacturers,). For example, 66% of global consumers are now looking to improve their diets by reducing their sugar intake.3

Health of the planet: ​for a new generation of consumers (and therefore products), sustainability is taking on new significance. Some six in 10 US consumers say it’s important that the foods they buy are produced in an environmentally sustainable way6​; confirmed by DSM research which found that 54% of consumers will seek products that have a certification of their environmental impact.3​ In other words, consumers are no longer reading product labels just for the ingredients.

They expect more from a manufacturer and at DSM for example (purpose: to create brighter lives for all), this includes transforming food systems: the way that our society grows, produces and eats food. DSM has been actively working on solutions that deliver a more sustainable production in various ways: from preventing wood waste by extending the shelf life of baked goods and yogurts; to more efficient cheese ripening; to plant-based protein that requires no additional arable land to meet the protein needs of millions of people; to the animals that wander the arable land itself. In February 2022, the EU granted approval to Bovaer, DSM’s innovative feed additive that consistently reduces methane emissions from cows by around 30%.

Solving the manufacturers’ challenges

Fiercer competition makes it more critical than ever to accelerate and shorten new product development cycles. Today it usually takes from 12-to-18 months for a product to hit the shelves. A good starting point is to simplify the innovation process itself - and what better way for manufacturers to achieve this than by choosing like-minded ingredient and application experts (like those at DSM) who understand their challenges – along with other commercial factors like the evolving regulatory landscape.

In such a dynamic market, it’s essential that manufacturers continuously innovate, improve and grow to keep pace, stand out and boost the bottom line - especially given the current high inflationary environment and scarcity of many raw materials. In this respect, it shouldn’t be forgotten that boosting taste and texture can boost profit too. For example, by creating cheese that is firmer yet more sliceable, DSM is helping manufacturers increase the yield of cheese slices by 15%.

Ultimately, consumers shouldn’t have to choose between taste, texture and health; and manufacturers deserve food and beverage partners that can make this a reality – faster, smarter, greener and more profitably. There really is no reason not to enjoy it all.


1. ​Wunsch N-G. Size of the worldwide functional food and beverage market 2020 to 2028​. (Statista, 2021, Sept).
2.​ FMCG Gurus: Flavor, Color, & Texture Trends in 2021​, March 2021. 
3.​ DSM Future Trends Survey 2020.
4.​ FMCG Gurus: Understanding the Growing Increase of Plant-Based Diets​ and DSM Consumer Insights Report: Plant Power​.
5.​ DSM Consumer Insights Report: Plant Power​.
6.​ International Food Information Council, IFIC Food & Health Survey, 2020.