Exclusive: Functional Flour Is a New Growth Opportunity

Having enhanced nutrient quantities, functional flours offer added benefits to consumers. The flour types used in this growing market are analyzed, as well as applications, market drivers, restraints, and revenue shares and forecasts. 

By Arupratan Chatterjee, consulting analyst (Analysis provided by Factor & Equilibrium)

Definition and description

Functional flour, which is obtained either from genetically modified grain or from a mix of various types of grain and non-grain flours, has much less gluten content than traditional wheat flours. Generally termed as functional flour, it also claims to offer several health benefits to the consumer, which are not provided by traditional flour. Functional flour can be a mix of plain wheat and non-grain flours, such as pulse flour, or can be obtained from genetically modified grains alone. These flours typically have less gluten content and enhanced nutrient quantities, thus offering added benefits to the consumers. Functional flours are known as hydrothermally treated specialty flours.

Flour types and applications

Wheat flour is the most widely consumed type of flour globally. It is primarily used as a thickening agent, holding the other ingredients together. While hard wheat flour, which is high in gluten, is preferred for baking breads, soft wheat flour contains much less gluten and is used for making cakes and other similar items. Many baking recipes, among other applications, utilize a combination of hard wheat and soft wheat flours, commonly known as “all-purpose” flour. However, the increasing awareness of gluten’s negative effects in cases of sensitivity or low tolerance has prompted the substitution of wheat flour, by some percentage per recipe, with other types of flour and ingredients. Wheat-germ flour is higher in proteins, vitamins and minerals, and can replace one third of wheat flour in most recipes. Other non-wheat substitutes include rye flour, oat flour, rice flour and corn flour among others. More than 35% of wheat flour can be replaced by light rye flour in most recipes without any loss in the volume of the mixture. Similar quantities of wheat flour can also be replaced by oat flour, which has a higher amount of protein and yet does not form gluten. Both rice flour and corn flour have nearly half the amount of protein as wheat flour and also do not form gluten. Both these flours are deemed good substitutes of all-purpose flour. Furthermore, functional flours based on rice and other pulses are used as bakery ingredients.

Market drivers

The current market for functional flours is primarily being driven by the improved baking properties of such flours. Most of the functional flours that are currently available have helped to improve the quality of baked goods, owing to their modified properties. Properties such as the ability to retain a higher amount of moisture and less gluten formation, among others, have been crucial in promoting the growth of the functional flour market for ready-to-eat products. Additionally, increasing awareness about the negative effects of foods with a high gluten content has also been instrumental in promoting the sale of functional flours globally. Gluten-free flour offers enormous growth potential in the coming years, as greater awareness has increased the consumption of alternative varieties of flour containing less gluten, such as mixtures of corn flour, brown rice flour, barley flour, white rice flour, potato starch flour, maize flour, soya flour and flour made from pulses. Furthermore, the rise in disposable income and the growing demand for bakery and ready-to-eat foods are some other factors that have also been positively impacting the global functional flours market.

Table 1: Push factor impact analysis

Push factors	Impact analysis
	2017 – 2019	2020 – 2022	2023 – 2025
Rising demand for functional flour in bakery products	Medium	Medium/high	High
Growth of the functional flour market for ready-to-eat products	Medium	Medium	Medium/high
Growth in demand for functional flour in emerging economies	Low	Medium	Medium/high

Source: Primary interviews; Factor & Equilibrium

Table 2: Pull factor impact analysis

Pull factors	Impact analysis
	2017 – 2019	2020 – 2022	2023 – 2025
Rules and regulations for proof of claimed benefits	Medium	Medium/low	Medium/low
Health benefit is often region-specific	Medium	Medium	Medium/low
Price volatility of grains	Medium	Medium	Medium

Source: Primary interviews; Factor & Equilibrium

Factor & Equilibrium is a startup market research and strategy consulting firm. It specializes in helping clients to identify market trends and business opportunities, as well as develop growth strategies.

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