The Grocer | How Health Ingredients are Moving into the Mainstream

Originally published by The Grocer on September 23, 2026.

For much of the past decade, the health agenda in food has centered on reformulation, particularly reducing sugar, salt and calories. Those priorities remain, but manufacturers are also differentiating products through added nutritional and functional benefits.

This shift is reflected in product development, with Innova highlighting protein, gut health and broader functional claims as important areas of innovation in food and beverage launches. GLP-1 adoption is likely to reinforce this as lower food intake increases the focus on nutrient density.

As functionality becomes more important, differentiation within nutraceutical ingredients is shifting from standard vitamins, minerals and amino acids toward clinically proven actives targeting specific health benefits, alongside delivery systems that improve how ingredients perform in the body.

This allows manufacturers to target specific health needs and build stronger evidence around benefits delivered by finished products.

R&D in Food Health

Phynova and Modern Baker illustrate how this translates into applications. Phynova’s Reducose is a patented white mulberry leaf extract for metabolic health, reducing post-meal blood glucose response across supplements, foods and beverages. Modern Baker has taken a similar benefit-led approach into mainstream food, developing a fermented seed-and-fiber blend that helps slow glucose absorption and supports gut health for use within baked products.

Nuritas extends this model from individual ingredients into a repeatable discovery platform, using its technology to identify bioactive peptides for sleep, aging and muscle health applications. Rather than developing around a single active, they generate a pipeline across multiple benefit areas, with recent funding supporting further commercialization.

This differentiation translates into attractive economics, with functional ingredients representing a smaller share of finished-product cost but having a greater influence on efficacy, claims and consumer positioning. Biovit estimates that its naturally sourced vitamins and minerals have equivalent bioavailability to synthetic alternatives, adding around 1% to end-product cost while increasing willingness to buy and supporting a10% price premium.

That economic asymmetry—small cost, outsized influence on price and positioning—is what is now reshaping the supplier landscape. As health ingredients become more sophisticated, competitive advantage increasingly rests on developing new actives rather than manufacturing existing products. The strongest businesses combine R&D, clinical evidence, regulatory expertise and application know-how to identify health needs and extend into new applications.

At leading flavor and fragrance houses, innovation is already embedded in the business model, with major companies devoting materially more of sales to R&D than broader ingredient manufacturers. This reflects the role innovation plays in driving differentiation, new applications and higher margins and valuations.

This emphasis on innovation also increases the role of value-add nutraceutical distributors and solution providers, which sit closer to customers and help identify demand, source actives and support product development. Cambridge Commodities, for example, combines ingredient supply with formulation, flavor development and regulatory support, while larger groups such as Givaudan and Kerry have built technical toolkits and application platforms around functional nutrition.

Why consolidation will follow

The strategic value of these capabilities is increasingly shaping mergers and acquisitions. In December 2025, Carbyne, a Germany-based private equity investor, acquired Spain-headquartered SuanNutra, a global nutraceutical ingredient provider, to build a broader platform spanning botanicals, amino acids, vitamins, minerals and clinically substantiated branded ingredients.

Activity has continued into 2026 with SIDG, a private equity-backed specialty ingredients distributor, acquiring I-Ingredients in February, a UK nutraceutical distributor offering probiotics, clinically proven actives and botanicals alongside formulation and regulatory support. Then in March, IMCD acquired Ireland-based Willows Ingredients, which provides expertise in health, sports and animal nutrition alongside technical support. More recently in July, SuanNutra announced its agreement to acquire IFF’s portfolio of Botanical Extracts, Vitamins & Minerals and Food Enhancement Activities.

None of this is coincidental. These transactions reflect a fragmented market with strong competitive “moats” given scientific, regulatory and application capabilities can take years to build organically. Acquisitions offer larger groups and private equity-backed consolidators faster access to attractive health categories and specialist capabilities.

As a greater share of differentiation in food and consumer health comes from science and functionality behind the finished product, value will move upstream toward specialist companies providing those capabilities. Health and nutraceutical ingredients are therefore well placed to become a greater focus for strategic buyers and investors, driving the next wave of ingredients consolidation.

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