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'Healthy foods' claim 20 per cent of US food market

Ageing populations, increased health-care costs and a period of unprecedented economic growth have combined to foster a booming healthy foods market in the US, according to a new report from California-based Nutrition Business Journal.

The market, defined by NBJ as natural and organic foods, functional foods and lesser-evil foods, has doubled in the past decade to be worth $109 billion in 2005. In this period, healthy foods went from representing 13.3 per cent of all food sales to 19.8 per cent, with average growth of 7 per cent to 9 per cent compared with 1 per cent to 4 per cent for conventional foods.

The strength of the trend is rapidly changing the dynamics of the market. ?The healthy foods industry is increasingly being populated by the largest multinational food corporations,? said principal author and NBJ editor Grant Ferrier. ?But this fragmented and evolving business still attracts thousands of entrepreneurs and is often paced by the innovation of small companies.?

Ferrier added: ?Food companies have migrated from convenience to health as the most important differentiator in the past few years. Price and taste are always important, but whether it?s for heart health, weight loss, energy, sports performance or disease prevention, a brand?s health profile is increasingly important in the competitive $560 billion US food business.?

The report singles out functional foods, with sales of $26.5 billion, as being crucial in the rise of healthy foods. "Whether it is soymilk, nutrition bars or the current obsession with energy drinks, different products have led growth at different times in functional foods, augmenting the steady growth of enriched products like fortified juice and baked goods," NBJ said. "Consumer awareness and application of new ingredients continues to grow in waves including activity around fibre, plant sterols, omega-3s and fish oils, soy, fruit and super-fruits, probiotics and yogurt-like cultures."

The organic and natural channel will continue to record robust growth figures, the report predicts. "Organic remains a hot category with strong double-digit growth and not at the expense of natural foods ? both have and are expected to grow into the future although exact health benefits are undefined."

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