Exceptional growth in the Indian economy and an increasing awareness of healthy functional ingredients, is driving the Indian functional foods and beverages market, according to a report by Frost & Sullivan.

A strong desire among Indian consumers to maintain a healthy lifestyle is an additional factor driving this market, according to the analysts, who found that the market earned revenues of over US$185m in 2007 and estimates this to reach US$1,161m in 2012.

While the market is still in its infancy, along with sports and energy drinks, the demand for functional foods is predicted to witness an expanding consumer base due to their specific health benefits.

“It is difficult to convince Indian fast moving consumer goods (FMCG) companies to fortify their products with innovative ingredients,” said Frost & Sullivan research analyst Aditi Paul. “The vague regulatory and industry approval protocols for functional foods further dampen the speed of market growth.”

Survival in the functional foods business requires cutting-edge R&D and high technical expertise, and it seems most Indian companies do not invest enough in research, yet this may change in the near future.

“Partnerships amongst functional beverage manufacturers, pharmaceutical companies, nutrition companies, and food additives companies is the right strategy for the formulation of a product that is healthy, offers great flavours, and is palatable along with being affordable,” added Paul.