Why health functional foods are permeating everyday retail channels

Health functional foods are now becoming less of a product that consumers deliberately seek out at specialty retailers and more like an everyday consumer good chosen in small quantities at nearby stores and familiar platforms. Low-priced, small-pack items at convenience stores have sold rapidly, with cumulative sales surpassing 1.3 million units. At the same time, some companies have decided to eliminate their own online shopping channels as of September 4 and restructure their sales models around external distribution networks.

This trend is gaining momentum as health management expands from regular purchases by middle-aged consumers to more frequent, casual purchases by younger generations. Wellness consumption has broadened especially among those aged 15 to 24, and while order amounts for general-purpose health functional foods have declined, demand for purpose-specific ingredients has grown, prompting distributors to prioritize accessibility and convenience of selection over price.

Total healthcare competition as industry boundaries blur

Companies increasingly view health functional foods not as a separate product category but as a means of engaging customers for a longer portion of their daily lives. A massage chair company has launched the health functional food brand “Bodyfriend Healthcare”, while a microbiome company is using a 54 billion won second-round private convertible bond issuance to simultaneously expand production facilities and its platform, underscoring a clear expansion strategy that bundles hardware, materials, and services.

This reshuffling is also linked to the growing cost of entering new businesses, which is pushing companies to keep raw materials, intellectual property, and clinical evidence in-house. Cases such as Boosters incorporating bio-materials company PureBio as a subsidiary, and a university hospital-based startup being selected for TIPS, a private investment-led tech startup support program, show that competition to secure core technologies and trustworthy evidence is intensifying beyond simple product sales.

Materials, evidence, and regulation are becoming the deciding factors

As the market grows, what matters more is not what can be sold, but what can be proven. Competition over evidence is intensifying to the point that probiotic research is being published in the international academic journal “Alimentary Pharmacology & Therapeutics (AP&T)”. At the same time, verification surrounding ingredients, content levels, and advertising appropriateness—such as in an investigation of 30 foods containing plant-based melatonin—has emerged as a key variable in consumer decision-making.

Institutional changes and industry events are accelerating this shift. As biomarkers for confirming gum health functionality and safety evaluation standards become more detailed, more sophisticated test design is being required from the earliest stages of development. Meanwhile, at exhibitions gathering more than 430 companies from 22 countries, raw materials, distribution, and responses to overseas regulations are being connected in one place, making the very method of market entry increasingly specialized.

K-beauty and food industries also shift toward a materials-centered structure

The beauty and food industries are also moving beyond selling finished products and toward emphasizing raw materials and platforms. As a trade show in Taiwan grows to 82 companies and 90 booths, and 152 companies participate in a Seoul event, competition for overseas sales channels is intensifying. At the same time, efforts are increasing to secure both raw material stabilization and formulation technology, as seen in delivery platforms based on hydrolyzed rice protein.

However, a shift toward material-centered strategies does not automatically translate into profitability. Even when sales increase, the bio divisions of major food companies remain highly affected by industry conditions, with operating profit (5.5 billion won) falling 92.4%. Still, new materials such as non-contact carbonization technology derived from jellyfish are reducing costs and time while broadening industrial applications, suggesting that in the long term, securing differentiated raw materials may become the key to restoring earnings.