A direct relationship between foods and health has led to various scientific studies to find the significance of foods or food ingredients on specific functions in the body. The term functional food refers to food with specific beneficial functions, is first coined in Japan. The present paper reviews the factors that have driven the functional food development, various definitions proposed by different authors and their classification. It also provides an overview on various functional ingredients in different food sources along with their potential health benefits, state of the art in commodity-based development and research on functional foods, the key factors required for their mass popularity, including some highlights on the increase in the global market share for such products. Mentions have also been made on the fact that framed rules for proving health claims of functional foods by conducting longitudinal studies before launching in the market are still lacking in many countries.
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