U.S. demand for food and beverage additives is expected to expand 3.5% annually to $8.5 billion in 2014, according to a new report from market research firm The Freedonia Group.

Advances will be driven by increasing consumer interest in nutritionally-enriched products and all-natural foods, which promotes demand for high-value premium and natural additives, the report states. As consumers are wary of foods with artificial-sounding ingredients, processors seeking to create “clean” ingredient labels are increasingly favoring natural additives. Consumer desire for functional products that provide health benefits will support demand for additives such as probiotics and other nutraceuticals.

Flavor products and alternative sweeteners will remain the largest product types in the U.S. food and beverage additive market. The inclusion of functional additives such as probiotics in a widening array of foods and beverages will benefit demand in this segment, as these nutraceuticals are often associated with a bitter taste that must be masked by flavor additives.

Additionally, the National Salt Reduction Initiative will promote demand for flavor enhancers, as these additives improve the flavor profile of reduced-sodium foods. Among alternative sweeteners, aspartame will continue to account for the largest share of demand, due primarily to its widespread usage in the diet carbonated soft drink segment. However, more rapid gains will be achieved by sucralose, acesulfame potassium (ace-K) and certain polyols. Additionally, trends favoring natural products will bode well for stevia sweeteners, which were approved for use as food additives by FDA in late 2008.

Among the various types of food and beverage additives, nutraceuticals are projected to experience the most rapid gains. Advances will be based on the growing popularity of functional foods, which contain additives that promote health and wellness.

Nutraceuticals will continue to expand their presence beyond traditional applications like breakfast cereal, milk, bread, yogurt and juice into a wide variety of other foods and beverages. Probiotics have found success in the yogurt segment and will increasingly be incorporated into a variety of other products, such as tabletop sweeteners, chocolate, nutrition bars and juice.