If you want to succeed with a functional food in the next 5 years, your strongest opportunities can be found in protein — and particularly animal-source proteins — probiotics, postbiotics, and addressing consumers’ growing anxieties.

The most successful path for your market strategy would be to take an existing traditional food and reinvent it, making it more convenient and better-tasting. Avoid substitutes and techno-fixes, steer clear of minefields like “animal-free dairy protein.” These concepts do not align with consumer needs, and aligning them will be a slow and high-risk process.

The Power of Protein

In every corner of the world, consumer demand for protein is strong and the trend shows no signs of slowing. It’s animal protein — particularly dairy — which is the biggest beneficiary of the trend. The many ways that dairy protein aligns with consumer preferences will see demand continue to grow.

The 2024 International Food Information Council’s (IFIC) annual survey into the habits and beliefs of Americans underscores how protein continues to top Americans’ priorities (as it does every year): 71% of respondents said they are trying to consume more protein, compared to 67% of respondents who said they were trying to consume more in 2023, and just 39% back in 2011.

Interestingly, the trend of consumers reducing their meat consumption, which was evident in the years 2014-2020, appears to have stopped in most countries — and in a few it even appears to have reversed. In Sweden, for example, a consumer survey by one of the country’s biggest makers of plant-based foods found that 25% of Swedes said they had actually increased their meat intake in 2023.

The U.S. Food Industry Association’s 2024 analysis of American consumers’ meat-eating habits using supermarket sales data gathered by Circana found that the number of Americans who described themselves as meat eaters has rebounded and is now 80%, compared to a low of 73% back in 2021. Self-described flexitarians were down to 12% of those surveyed.

The biggest winner in protein is dairy. People enjoy its versatility, taste, texture, naturalness, and its association with weight management and maintaining a healthy body shape.

Surging sales of cottage cheese over the past 2 years are a good illustration of the appeal of dairy protein. And while it’s true that social media has played a key role in the cottage cheese frenzy, that would not have happened were it not for the fact that cottage cheese aligns with what consumers want: a simple, natural, versatile food that provides a good source of protein. Social media simply enables people to understand those advantages in a way that no advertising campaign could ever have achieved. 

In 2023, American cottage cheese sales were up by 16% over the previous year to a total of $1.33 billion. Volume was up by 11% — an amazing achievement in a year in which most supermarket categories were flat or volumes fell. Strong growth continued in 2024.

In Sweden, Arla Dairy, the main producer of cottage cheese, sold 30% more in 2024. And in the U.K., cottage cheese sales surged by 40%.

Sustainability is still occasionally cited against animal protein by environmental activists. The consumer, however, has moved on and the majority — as shown by supermarket sales figures — are comfortable that dairy protein and meat are “sustainable enough.”

What the consumer wants is some reassurance that they can enjoy their favorite foods with a clear conscience. Dairy producers are providing that reassurance, whether by adopting regenerative agriculture, achieving carbon zero, better animal welfare, feeding cattle seaweed to reduce methane emissions, or recyclable packaging.

For a growing number of people, terms such as pasture-raised and grass-fed also signal sustainability. In the minds of consumers grass-fed signifies better for animal welfare, better for the environment, and better for my health.

Grass-fed is steadily becoming a more valuable health halo claim for animal proteins. In the U.S., “grass-fed” is the most popular Google search term in relation to food and sustainability, exceeding all others. The term is also growing in use on products in Europe and Asia.

Introducing consumers to protein quality is the big untapped competitive advantage for dairy protein and the opportunity to propel further growth over the next 10 years. Dairy protein is one of the highest-quality protein sources, as measured by its breadth and quantity of essential amino acids, which is why it scores highly on tests such as DIAAS (the scale approved by the U.N. Food and Agriculture Organization). Most plant proteins, by contrast, are incomplete. No single plant protein can compete with dairy protein (although soy gets within reach). 

When consumers think of protein, they think of quantity, but they do not know about quality. The few people that do are those interested in sports and fitness. That group provides a foundational stone to build on and grow awareness of the protein-quality message.

This same health-active group will likely be motivated by other new benefits that make a logical fit with protein. An example is creatine, which has seen huge growth in sports powders and supplements in recent years thanks to its energy benefits. Evidence is also growing for its role in better cognitive and hormonal health.

The launch in Portugal, under the Premyer brand, pairs the benefits of creatine with protein; each 500-ml bottle delivers 6 grams of creatine and 35 grams of dairy protein. Not only does this dairy drink taste good, it is a good example of how to make a product, ingredients, and benefits make sense in the mind of the target consumers. They are accustomed to high-protein dairy with a sports positioning and they recognize creatine and its sports and energy benefits. Some will know that creatine is an animal-source ingredient. Taken together, creatine, protein, and dairy should be a strong fit.


Plant proteins are set for continuing growth, but it will be “steady” and unexciting growth rather than the explosive kind that investors and consultants were (wrongly) forecasting in 2016-2021.

It turned out that meat substitutes and dairy substitutes were a blind alley. They do not meet most consumers’ expectations for taste, texture, nutrition, naturalness, price, or shorter ingredient lists. And often these products even fail to deliver much protein. Unsurprisingly, sales in the U.S. meat substitute market are down almost 40% over the past 2 years. Most dairy substitute categories are niche, with sales flat or falling, such as plant-based cheese and yogurt, which have seen volumes fall by 12% and 10%, respectively.

The best growth opportunities will be for plant proteins that consumers perceive as natural and “real,” in product forms that are most aligned with consumer preferences. In terms of strategy, reinventing a traditional food rather than trying to create a new food — such as a dairy or meat alternative — will consistently be the most effective path to take.

One of the best examples of this strategy in plant proteins is how Asahico, one of Japan’s leading and longest-established tofu companies, took a traditional tofu product, which was in slow decline, and created a new category by focusing on consumer preferences. Faced with falling tofu sales Asahico:

• Created a new and more convenient product;
• Identified a group of consumers who needed greater convenience than the existing traditional product could provide;
• Provided flavors and textures that would meet new consumer expectations;
• Delivered the nutritional benefit the consumer wanted (10 grams of soy protein) and which would make the new product competitive with existing options.

With its simple ingredients, extreme convenience, interesting flavors, easy-to-understand health benefit, and back-story of traditional usage and Japanese provenance, Asahico’s Tofu Bar can now be found in almost every store in Japan. With annual sales of $200 million it is one of the most successful innovation stories in plant proteins.

One likely growth area for plant proteins is in “sweet proteins.” Start-up OObli, for example, has partnered with Grupo Bimbo, the biggest bakery group in the Americas, to commercialize its fermentation-derived sweet proteins. It’s a way to meet consumers’ desire for sweetness with fewer calories, making more baked goods and snacks permissible indulgences.

Figure 1. % of consumers eating foods that boost their mood and mental wellbeing, by age segment

Mood Health

One of the most important long-term growth trends is in Mood & Mind. It’s a trend that has been around for 15 years and, as with so many enduring trends, it has been emerging slowly, with many missteps along the way. Its power lies in:

• Its connection to other consumer priorities, such as energy and digestive wellness;
• Its rising importance for consumers, beginning in 2020 and now driven by a world which many people experience as filled with threats, anxiety, and uncertainties; 
• The steady evolution of science, which is revealing more about specific benefits from multiple ingredients (such as probiotics) and the importance of many micro- and macro-nutrients in supporting mental wellness.

In almost every culture, people have long used food to influence their mood, to help with anxiety, sleep, or feelings of depression. On average, in 2024, 22% of consumers globally claimed to be eating foods that boost their mood and mental wellbeing, up from 19% in 2022. As Figure 1 shows (above), younger consumers are more actively looking for these benefits from foods than older consumers.

People’s interest in ways to improve their mood is already connected strongly to “regular food,” as Figure 2 shows (below). Chocolate, for example, is used by many people as a way to lift their spirits.


Figure 2. Which of these are you doing to boost your mood and mental wellbeing? (Average of five countries) 

Probiotics

One of the potentially strongest opportunities lies in probiotics. Their benefits for digestion and immunity are well-established in consumers’ minds, from America to Asia to Europe. They have become an established part of mainstream food consumption over the last 30 years and they do not need explaining to consumers.

Harnessing an effective probiotic to create a product that delivers mood benefits, alongside the digestive benefit that the consumer already associates with probiotic dairy, may be a way for probiotic brands to widen their appeal. This move is being led from Asia and will probably continue to be led by Asia. It is also an opportunity in the U.S.

The path has been pioneered by Yakult 1000. Launched in Japan in 2021, it is a 100-ml probiotic dairy drink, aimed at people in their 30s to 50s. It carries claims, authorized under Japan’s Food with Function Claims (FFC) system, that it can: alleviate stress, improve sleep quality, and regulate intestinal function.

Yakult 1000 rapidly became a success, achieving sales of over $850 million in 2023, with this number rising to over $1.1 billion for the year to March 2024. It is almost certainly the most successful new health product launch anywhere in the world in the last 5 years.

Yakult Honsha, a pioneer in probiotic dairy drinks, is one of the world’s oldest and most successful health brands. Its flagship product is a probiotic fermented milk drink, sold on a digestive wellness message, in a 65 ml or 100 ml daily dose bottle. Yakult sells 28.9 million of these bottles every day, with more than half its sales in 40 international markets, from America to Mexico to China to the Philippines and India.

Yakult 1000 has succeeded despite being a premium-priced product in a market that is intensely competitive. The Japanese consumer, who has been familiar with probiotics and their benefits since the 1950s, is demanding. The only way for a probiotic to get repeat purchase and sales growth is if the consumer believes they can “feel the benefit.” The consistent growth of Yakult 1000 suggests that it is performing well enough on the “feel the benefit” front.

Potential in Postbiotics

Probiotics are the undisputed leaders in gut health ingredients. Postbiotics, on the other hand, are more complicated, and even experts in the industry spent more than a year trying to reach consensus on a definition. The International Scientific Association of Probiotics and Prebiotics (ISAPP) defines a postbiotic as a “preparation of inanimate microorganisms and/or their components that confers a health benefit on the host.”

A postbiotic is, put in simplistic terms, a dead probiotic. They may be more effective in delivering certain health benefits than many probiotics. Several multinationals offer postbiotic ingredients, including Cargill, ADM, and dsm-firmenich. 

Product developers are getting excited about the possibilities of postbiotics, which can often deliver a more effective benefit than probiotics, are easier to handle in processing, and work with more product types. However, the scope for consumer confusion is clear and mentioning a “dead probiotic” is a guaranteed consumer turn-off. You can get enthused about postbiotics, but you should not talk to consumers about them.

As so often, the good example of strategy can be found in Japan, where Kirin, a pioneer in postbiotics, emphasizes taste and effectiveness in its marketing of its “Delicious Immune Care” yogurt drink, with postbiotics. Launched in 2021, the brand became a rapid success. Building on this, Kirin next introduced “Delicious Immune Care Sleep,” combining the benefit of sleep support with immunity. In 2023 it achieved half of its sales target for the entire year just 3 weeks after its launch.

Japanese people are unaware of the distinction between “live” (probiotic) and “dead” (postbiotic) cultures, and changing that will be an impossible task. Convenience and health benefits are prioritized by consumers over such distinctions and the word “postbiotic” does not appear on Kirin’s successful products in Japan.

Digestive wellness is of course a huge area of consumer interest and has been a growth trend for almost 20 years. Unsurprisingly, product developers often think that majoring on fiber content will help their brand. At one level that makes sense. Fiber is a nutrient that people know they need more of and it’s an ingredient that is simple and easy to understand. In the five countries we survey each year, about 28% of consumers said they are trying to get more fiber in their diet.

Positioning a brand with a strong digestive wellness message, with fiber as the hero ingredient, was possible 10 or 20 years ago. It created a point of difference and could drive sales. A brand such as Fiber One breakfast cereal and bars in the U.S. was able to reach a billion dollars in sales with this proposition.

Those days are over. Messages about fiber have become so common on labels that they have ceased to be a point of difference. In categories such as breads, breakfast cereals and bars, flagging up the fiber content has become a basic requirement.

A strong fiber positioning can still work, provided that your brand targets motivated and usually older consumers with a niche brand. For younger consumers, fiber’s presence on the label is welcome, but consumers want other benefits — particularly more protein or less sugar — alongside fiber, and they find these more motivating.

Success in food and health is about offering something that “makes sense” in the mind of the consumer. Ideally, it’s about offering them something that is familiar, or at least easy to understand. Best of all is if you can take a traditional food and reinvent it, making it more convenient and better-tasting. The ingredients and the benefits must fit together and with the product. You can offer ingredients and products backed by science, but the consumer is primarily interested in the benefit and the product they are consuming.

Whether it’s the success of cottage cheese in America or tofu bars in Japan, those are the rules of strategy. Follow them and you can almost make a success of anything.

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About the Author: Julian Mellentin is Director and Founder of New Nutrition Business, which delivers insight and consultancy into key trends in foods, beverages, nutrition, and health for food, beverage, and ingredients companies worldwide. Visit www.new-nutrition.com for more.