Julian Mellentin, director of New Nutrition Business, says functional ingredients offering "naturalness" will dominate in 2012:
In 2012, 'naturalness' will be the number one marketing trend in Europe—and selecting ingredients that are naturally functional, or which have a health halo, will make good business sense.
The key to success in 2012 will be selecting ingredients that the consumer media writes about in a positive way. Take the leading German brand of coconut water, Dr Martens. Its sales grew by 100 percent last year, even though the company does no marketing and the product carries no claims. It does well because, thanks to the German media, consumers know all about coconut water's 'naturally functional' benefits.
The biggest beneficiary of the trend towards naturalness will be fruits and vegetables. Usage of fruit as an ingredient in products in Europe has already risen 100 percent in the past three years. Fruit ingredients have a powerful image in consumers' minds as naturally healthy—and they're often willing to pay more for this.
In France, for example, the Nature Addicts 100 percent fruit snacks brand sells at a massive price premium—equivalent to around $67 (€50) per kilo of product. Yet it was Europe's most successful snack launch of the last three years, rocketing from zero to $40 million (€30m) in retail sales in France—equivalent to a $200 million (€150m) brand in the United States!
2012 is the year of stevia
Joël Perret, CEO of France's Stevia Natura, thinks 2012 will be stevia's year:
After years of waiting for market authorization, food and beverage companies were finally given the green light, on Dec. 2, 2011, to use stevia as a sweetener in the EU.
This means that in 2012, manufacturers can now give European consumers the sweetener they have been crying out for all along—one that offers them a natural way to reduce their sugar and calorie intake, and therefore help them to lead a healthier lifestyle.
As a result, I think demand for stevia-based ingredients in 2012 will quickly become very strong—even taking into account that at the outset consumer knowledge of stevia in Europe will be fairly low.
It is particularly good news that the European Commission has permitted the use of steviol glycosides, and not just the high-purity Rebaudioside A stevia extract. This will give companies more flexibility.
Steviol glycosides are also cheaper than Reb A. And with sugar prices so high right now, this will make stevia very attractive from a price point of view in 2012. It will present manufacturers with the opportunity to make cost savings by reducing sugar (while also reducing calories) without losing sweetness in products.
Time to reduce red tape
Nigel Baldwin, European director of scientific and regulatory consulting at Intertek Cantox, wants the EU to reduce red tape:
My personal hope for 2012 is that the European Union finally pledges to streamline the regulatory process for companies engaged in the functional ingredients, foods and supplements sector.
We've seen how tough Europe is being on health claims. This is hard enough, but it's only exacerbated by the pressure put on the industry by an increasingly complex regulatory system.
A good place to start would be to make it possible for suppliers to apply for novel foods and health claims approval at the same time. At the moment, companies requiring novel foods approval as well as authorization for a health claim must submit two expensive and time consuming dossiers.
In my view, the Commission needs to take a step back and look at the whole, not just the parts. Why are we assessing safety and efficacy separately, under regulations that cross over but which take no notice of each other?
Time is money and I fear that if things do not improve we are likely see many more small- and medium-sized enterprises go to the wall because their investors are seeing no clear progress towards obtaining approvals and profitability.
Green, pure and local
Lu Ann Williams, head of research at Netherlands-based Innova Market Insights, shares three key trends in Europe for 2012 and beyond:
Green is a given
Corporate social responsibility and sustainability strategies have taken on an increasingly important role. The focus is on reducing carbon emissions or packaging, or creating higher welfare or fairly traded lines. The "ingredientization" of commodities is also moving forward, with previously untapped waste materials used for their potential functional and health benefits.
'Pure' is the new natural
Natural products are becoming the rule rather than the exception in most western markets, despite ongoing issues with a clear definition of what "natural" encompasses. One way around this has been marketing the "purity" of a product. We've recorded a doubling in the number of products using the word "pure" between 2008 and 2009, with a further third added in 2010 and considerably more in 2011.
Location, location, location
Interest in where their foods are coming from has never been higher among consumers. This is being driven by an interest in supporting local suppliers, a desire for ethnic-style lines, concerns over the quality and safety of imported products, or the demand for authenticity.