The Consumer Affairs Agency (CAA), which oversees FFC and other health functional products in Japan, received 1,176 new FFC notifications in FY2025.
This was a year-on-year decrease of 26%, after peaking at 1,584 in FY2024.
The decline can be attributed to stricter regulatory oversight following the 2024 red yeast rice extract crisis, according to Hisaaki Kato, CEO of Japan-based regulatory consultancy SmoothLink, in his new report “In-Depth Analysis Report on Foods with Functional Claims notified in FY2025″.
“The most prominent characteristic of the FFC sector in FY2025 was the substantial tightening of regulations, arguably the most significant since the inception of the system. Companies were compelled to establish an integrated compliance framework encompassing everything from scientific evidence to risk management,” wrote Kato, a veteran in the industry and also one of the judges of the NutraIngredients-Asia Awards 2026, in the report. “This regulatory shift led to a major decline in new FFC notifications.”
The FFC system was introduced in 2015 as part of the former Japanese Prime Minister Shinzo Abe’s “Abenomics” growth strategy. To drive market growth, the FFC system thrived on the merits of product deregulation, allowing businesses to display health benefits of their products simply by notifying the CAA of the scientific evidence of ingredients used, without having to obtain CAA’s approval.
However, since the red yeast rice safety scandal broke in 2024, the CAA has introduced stricter conditions for FFC notifications and companies must follow PRISMA 2020 when submitting product notifications.
Mandatory implementation of Good Manufacturing Practice (GMP) and reporting of health hazards, as well as updating the CAA on new safety and scientific findings, were also introduced.
“Since April 2025, factors such as systematic review compliance with PRISMA 2020, requirements for additional forms, database renewals, and prolonged review periods accumulated, causing manufacturers to become highly cautious about submitting notifications,” he wrote. “In particular, the standardized notification model utilizing systematic reviews has slowed down due to the increased burden of document preparation and higher compliance review risks.”
Withdrawals exceeded new notifications for the first time
Over 1,923 existing FFC notifications were also voluntarily withdrawn by companies in FY2025.
This is also the first time that FFC withdrawals had exceeded new product notifications.
Kato explained that the withdrawals were in response to stricter rules, especially the need to conduct self-inspection on whether they are following CAA’s regulations.
What’s driving growth?
Despite fewer products hitting the market, the FFC market size is projected to grow by 4.1% to reach JPY 773.5 bn (US$4.91bn) in FY2025, Kato pointed out, citing data from market research firm Fuji Keizai.
The FFC market remained resilient due to three key factors, according to Kato.
First, while FFC in the form of supplements such as tablets and capsules remains sluggish in market demand due to the red yeast rice scandal, consumers are still willing to purchase functional food-type FFC. Functional yogurt that claims to manage blood sugar levels and tea that claims to promote fat reduction are especially popular.
Second, the emergence of multi-function FFC is driving new consumer purchases. Examples of multi-function FFC include those that claim to promote gut health and fat reduction.
Third, consumer demand for FFC is growing due to its lower cost than other types of health functional products, such as Food for Specified Health Uses (FOSHU).
Kato believes that the FFC market is transitioning from “quantitative expansion” to “qualitative growth”.
“FY2025 was a watershed year for the FFC system. While the decrease in notifications and increased operational burdens will persist in the short term, the mid-to-long-term improvement in system reliability is highly likely to concentrate market opportunities among companies with robust quality control capabilities...” he wrote. “Consequently, the key success factors for FY2026 and beyond lie in whether a company can organically integrate regulatory adaptation, evidence design, manufacturing quality, labeling, advertising management, and channel strategies.”
GABA tops most popular ingredient
Similar to past years, GABA remained the most popular ingredient in single-ingredient FFC products.
GABA is allowed to make claims such as fatigue reduction, sleep support, stress relief and blood pressure management in FFC products.
However, Kato also noted that the market share of GABA products is shrinking.
While GABA products accounted for over 14% of the market over the past four years and rose to 18% in FY2024, their market share fell to 10% in FY2025.
3-(4-Hydroxy-3-Methoxyphenyl) propionic acid, also known as HMPA, was the second most popular ingredient in single-ingredient FFC products, followed by reduced coenzyme Q10, ellagic acid and indigestible dextrin.
Kato noted that HMPA first entered the market in FY2022 and has since secured approvals for five distinct health claims, including reducing abdominal fat, including visceral and total abdominal fat, in individuals with a high BMI.
“Its strong performance is likely driven by the fact that it is a polyphenol and possesses excellent processing stability,” wrote Kato.
Fat reduction, fatigue, and intestinal regulation were the top three most popular health claims among FFC products.
