Special News Feature: Future is functional as market for active health foods booms, says NY Times

On Sept. 16, the New York Times Dining and Wine, not the business or the science section, featured a story on functional foods. The article, titled Superfood or Monster from the deep? gave creed to the notion that functional foods are not just another food fad. The question remains though, which specific products will fade with passing fads and which will be tagged as a long-term trend? (See sidebar for the answer)

The raft of launches — barely a day goes by without the arrival of a new functional food or beverage of some kind — suggests that either there is huge demand from consumers for these active health products or the unthinkable is true — that scores of manufacturers have horribly misread the market.

It is likely that the truth lies somewhere between the two. Just as it is with all new food and drink launches, some suppliers will press the right buttons and others will make mistakes. Many companies will do both.

One functional beverage supplier apparently doing very nicely is Chicago-based Vitalita Nutritional Products, distributor of a range of a non-alcoholic health drinks called Embodi, which contain antioxidants found in red wine. The company has just widened distribution of the brand after a successful US launch in Whole Foods Market stores in June.

"The initial consumer response to Embodi has been overwhelmingly positive and we have far surpassed our expectations for the first phase of our launch," said Dan Waters, CEO of Vitalita Nutritional Products. "We are very excited to offer Embodi through a wider number of stores allowing even more people to discover what tens of thousands of others already know — that Embodi is a convenient way to take charge of their health."

Quoting figures from Nutrition Business Journal, a sister title to Functional Ingredients, Waters said there was good evidence of a boom in functional foods.

"Unlike most other segments of the economy, the US nutrition industry continues to expand at a double-digit pace — and ended 2007 with its highest growth rate in nine years," he said. "In 2007, the US nutrition industry grew 10.7%. The functional food categories expanded 9.4% to $34.3 billion."

Wendy Acheson, regional sales manager at Touch Agency and sales consultant to Embodi, added: "Ageing boomers and young consumers have a much broader knowledge and interest in health. One of the major consumer interests is in the functionality of nutritional health benefits with a specific function, such as joint formula, digestion or, like Embodi, a convenient beverage which offers red wine health benefits including cancer prevention and heart health."

The boom in functional food products is good news for suppliers of the ingredients in them. One, Ocean Nutrition Canada, supplies omega 3 and it is expecting dramatic growth to continue in a functional food and drink sector that it believes is "still in its early growth phase".

"We believe consumers see the value [in functional foods]," said Ian Lucas, head of marketing at Ocean Nutrition Canada. "We have numerous success cases from customers including omega-3s, such as Tropicana Heart Healthy orange juice and Danino Yoghurt in Canada. The key is to deliver great taste first, and then the value of omega-3 EPA and DHA, and find relevance for the consumer so they connect with the benefits and rationale for their purchase."

Lucas said he believed the market for functional foods containing omega 3 would become a sophisticated category in its own right. "We believe there will be an entire category growing in the grocery store, similar to what has happened with organics. Consumers will have the choice to include omega-3s in their foods, and if they want to there will be a wide variety of products available so all members of the family will get their omega-3 through convenience of eating the foods they prefer to eat and the great taste from the brands they love."

Education remained important though, he said, particularly in terms of helping consumers understand how much omega 3 they should take. "Our industry works together with a trade association, Global Omega-3 EPA and DHA (GOED), and one of the focuses is to work towards an RDI in the US market. Once this happens there will be a significant movement in consumer understanding."

Consumer understanding of functional foods, and the ingredients in them, is perhaps the biggest challenge companies face. And the results of a recent survey suggest there is still work to do.

Like omega 3, probiotics are a popular addition to food and beverages. But a recent survey by dietary supplement supplier Ganeden Biotech found that 85% of Americans knew little or nothing about them. Two-thirds of respondents hadn't even heard the term "probiotics" before.

Despite this, however, US consumers spent $1 billion on probiotics last year. It doesn't take a wild imagination to imagine how much more they might spend on them if they actually knew what they were.

Functional Fad or Trend?
At a recent Prepared Foods conference, Lynn Dornblaser, director of CPG Trend Insight from Mintel Intl., explained to attendees when deciding on the next new flavour introduction what differentiates a passing fad from a trend. Though flavours aren't always functional, her advice is no less relevant. A fad has an AHA reaction with a quick spike in consumer purchases, but in the end is too confusing and hard to adopt. Conversely a trend represents: ?

  • Slow Steady Growth
  • Expands Across Categories and Countries
  • Common Language
  • Easy to Adopt
  • Must have an AHA reaction...in other words, "Why didn't I think of that?"
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