Functional Nutrition

Harnessing the medicinal power of food

Overview

Functional nutrition is a medical discipline emphasizing the importance of understanding how food can influence health at a deeper level. Instead of focusing on treating symptoms, it probes into the root causes of health issues and uses personalized dietary practices to address them. By selecting the right food and nutrients tailored to an individual's unique needs, functional nutrition aims to prevent, manage, and even treat chronic diseases.

The growth of functional nutrition apps is driven by the rising prevalence of chronic diseases and nutrient deficiencies, with increasing demand for personalized dietary guidance. The COVID-19 pandemic played a major role in heightening overall health consciousness, leading consumers to seek products with added nutritional benefits. Millennials and Gen Z, in particular, are adopting digital platforms for customized health solutions, further driving demand. However, significant risks exist, including privacy concerns related to the storage of sensitive health data, which could lead to security breaches. Additionally, the need for rigorous scientific validation to gain trust from healthcare providers and users in addition to complex regulatory requirements could deter new entrants from the market.

Industry Updates

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Market Sizing

The US Functional Nutrition market could reach USD 16.1 billion–20.4 billion by 2028

Conservative case

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Market Mapping


The Functional Nutrition industry is composed of players that offer nutritional interventions to prevent, manage, and treat chronic diseases and improve overall health. These include startups that offer nutrition management platforms, nutrition-based chronic care, supplements and nutraceuticals, personalized food service platforms, and telenutrition platforms. 

Nutrition-based chronic care platforms accounted for most of the industry’s funding (42%) as of March 2024, with around USD 629 million raised. This was followed by the supplements and nutraceuticals industry segment, which raised around USD 530 million as of the same date, also accounting for ~42% of the industry’s funding.

Large-scale nutrition providers such as Nestlé and Kraft Heinz, along with traditional technology companies such as Whirlpool, are some of the major incumbents active in the space, with the former group providing supplements and nutrition management platforms, respectively.  

The Disruptors


A majority of disruptors in the space (~57%) were founded after 2017, and most of them currently tend to be at go-to-market and minimum viable product stages. The disruptors in this space also tend to provide cross-service offerings between most segments. However, providers of personalized food service platforms tend to exclusively focus on this business vertical. 

None of the disruptors tracked in the space are publicly listed; however, the space does have some large players–based on total funding raised. These include companies such as Foodsmart, Viome, and Zoe, which (as of September 2024) have raised USD 315 million, USD 276 million, and USD 104 million, respectively. 

Funding History

Competitive Analysis


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Incumbents


Incumbents offering functional nutritional solutions include major nutrition and food providers such as Kraft Heinz and Nestlé. The industry also includes well-known players that operate across other industries, such as wellness provider Weight Watchers, electronics and appliance manufacturer Whirlpool, medical device manufacturer Medtronic, and grocery technology company Instacart. Other incumbents, such as Herbalife, Nature’s Way, and Mom’s Meals, that operate only in this space, leverage their respective industry knowledge to compete with other diversified incumbents.

Most incumbent in-house activity is spread evenly across the nutrition management platforms, supplements and nutraceuticals, and personalized food services segments. Partnerships, however, were only observed to be formed between incumbents and disruptors in the supplements and nutraceuticals and the nutrition management platforms segments. 

M&A in this space is relatively minimal, with the most recent activity being in August 2021, when Nestlé acquired The Bountiful for a transaction value of USD 5.75 billion. Previously, Nature's Way acquired Blaze in February 2021 for an undisclosed sum. 

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Notable Investors


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Overview

Healthier life through personalized dietary practices and nutritional interventions

Traditional Nutrition emphasizes standardized dietary guidelines and macronutrient counts, aiming to provide a one-size-fits-all approach to healthy eating. In contrast, Functional Nutrition emphasizes a holistic view, focusing on the interplay between food, lifestyle, and individual biochemistry to promote optimal health and prevent disease. It considers factors such as genetics, environment, and personal health history, advocating for personalized dietary strategies that address the root causes of health issues. The table below outlines the key differences between these two approaches.

Traditional nutrition vs. functional nutrition

In addition to the functional and traditional nutrition approaches, there is also the Food as Medicine (FaM) concept. These companies use specific foods to help heal the body and prevent diseases. While functional nutrition is highly personalized, tailoring dietary recommendations to an individual’s unique needs, FaM focuses more on the general health benefits of certain foods and ingredients, often without the same level of customization. Companies that purely focus on FaM, without any consideration for personalization, tend to be out of scope for this industry.

Offering personalized nutrition digitally

Companies focusing on functional nutrition use digital platforms like mobile apps and websites to provide personalized nutrition solutions to a wide health-conscious audience. These platforms allow users to input their specific needs, such as dietary preferences, health conditions, and wellness goals. Based on this information, the platforms offer customized meal options, including recipes and pre-prepared food. The goal is to make it easier for people to follow a nutritional plan that suits their individual needs, promoting better health and well-being.

Digitalized approach to functional nutrition

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