Functional food ingredients that support better sleep, reduced stress and improved focus are in demand and driving product innovation, according to a new report from T. Hasegawa.

The flavors producer cited research from Lightspeed/Mintel that found nearly 70% of consumers currently use products that feature a functional benefit, and 40% use products with three or more functionalities.

Consumers under 55 are more aware of and use more products that offer functional benefits. At least 4 in 10 use products that touch on three or more benefits, compared to 21% of baby boomers.

Shifting demographics are positioning functional products for growth, according to the report. By 2025, 41% of the population will be comprised of Gen Z and millennials. These younger consumers already are the most engaged in functional product usage and are significantly more focused on diets that support both mental and physical well-being. Still, the share of consumers ages 65 and older is growing at a faster rate than any other age group, indicating there are opportunities to grow the audience for functional foods and beverages among older consumers.

Well established, recognizable ingredients may resonate more with older consumers who are slower to adopt emerging health and wellness trends, according to the report.

“Functionality in food and drink has found its place within consumer routines, and curiosity in how diets can further support both physical and mental health is high, particularly among younger consumers,” says Alyssa Hangartner, consumer insights analyst, flavor and ingredient trends, at Mintel. “Increased emphasis on improving lifestyle habits and the definition of wellness on a personal level has left plenty of room for food and beverage innovation to meet consumers’ needs where they need it most.”

The report showed consumers have gravitated toward product categories that offer a sense of comfort during the past year, with snacks, baked foods, soup and frozen treats posting the largest consumption increases. There also has been a notable uptick in consumption of convenience offerings like packaged produce, meats and frozen meals. Functional ingredient innovation is largely concentrated in snacks and beverages, pointing to white space areas for future functional ingredient innovation, according to the report.

The snack/cereal/energy bar category accounted for the largest share (20%) of new product launches containing functional claims in 2020, followed by cold cereals (11%), spoonable yogurts (5%) and nuts (5%). Innovation in the beverage space centered around meal replacements, which accounted for 28% of new launches containing functional claims, followed by energy drinks (16%), tea (15%) and flavored water (11%).

Among product introductions featuring functional claims, energy topped the list and remained the most utilized benefit in 2020.

Anti-inflammatory is another popular claim, with 55% of consumers believing traditional medicine made from natural ingredients is an effective remedy against illness. Turmeric in particular is known for its anti-inflammatory properties and has emerged in a diverse range of product categories.

Digestive support also continues to proliferate, with more than half of consumers either currently consuming or interested in trying products that support digestion and gut health.

While innovation containing immunity support claims has only increased slightly over the last five years, growing from 7% in 2015 to 8.5% in 2020, consumer interest in immunity has significantly increased during the pandemic. Lesser-known immune supporters newer to the market, like elderberry and thyme, may give brands access to trend seekers and consumers looking for unique flavors and experiences, according to T. Hasegawa.