Natural Foods Merchandiser

Functional Foods—Past, Present and Future

Current industry buzz is that functional foods and nutraceuticals continue as one of the hottest and most interesting categories for new products entering the marketplace. So what are functional foods and nutraceuticals? And how do they differ from dietary supplements? What do retailers need to know about this category, with new entrants coming into the market everyday?

Functional foods and beverages are not really new. The first functional beverages were wine and beer because they were consumed for their functional effects rather than just hydration. Tea is the most common functional beverage used worldwide today. Gatorade was one of the first modern functional products; it was specifically designed to replace sugars, calories and minerals lost during exercise. Now, the functional foods trend is capitalizing on consumers' knowledge that diet has a major impact on health—both positive and negative. In the 1980s and early 1990s, the emphasis was on removing negatives—no salt, sugar or fat. Now, the trend has shifted to adding more positive benefits to the diet.

Recent scientific research supports the health benefits of many common foods, and consumers increasingly recognize that incorporating more orange juice, carrots, broccoli, fish, garlic and green leafy vegetables into their diets can make a difference. Consumers are making the connection between a good diet and optimal health or disease prevention, but they do not really understand the term "functional foods." The International Food and Information Council reported "low to moderate" consumer awareness for functional foods, although awareness of foods that reduce cancer or heart disease risk was "fairly high."

Retailers can help their customers sort out the difference between functional foods, fortified foods, nutraceuticals and dietary supplements. Here are some commonly accepted definitions.

Functional food is a term used more readily by food marketers to describe a segment of products in the marketplace. Technically, functional foods are "any food or food ingredient that may provide health benefits beyond the traditional nutrients it contains." Traditional nutrients primarily refers to vitamins and minerals or nutrients that have a Reference Daily Intake. These nutrients are considered essential to the diet, such as vitamins C and E or calcium.

Nutrients not recognized as essential by the United States Department of Agriculture are becoming better understood. For example, in 1999 the Food and Drug Administration approved use of soy protein health claims based on evidence indicating soy can reduce the risk of cardiovascular disease. Other examples: Beyond the nutritional value of cranberry juice, its proanthocyanidins may support urinary tract health; the probiotics in yogurt can help support a healthy immune system.

Fortified foods are enriched with vitamins and minerals up to 100 percent of the RDI. Some of these foods, including many grain products, are required by law to be fortified to replace the vitamins lost during processing. Since the 1940s, breakfast cereal manufacturers have fortified their products with 25 percent to 33 percent of the RDIs for vitamins and minerals. Many consumers do not consider fortified foods unique because these types of foods have been around for decades. Foods fortified to more than 100 percent of the RDI are relatively new to the marketplace and bear similarities to dietary supplements.

Dietary supplements are defined as any product (other than tobacco) that is intended to supplement the diet and contains one or more of the following: a vitamin, mineral, herb or botanical; an amino acid or metabolite; an extract; or any combination of the above. According to the FDA, a dietary supplement may be marketed in food form as long as it is not represented as a food. The Hain Celestial Group's product of a few years ago, Kitchen Prescription, was pulled from the market because it was a soup labeled as a dietary supplement. The FDA maintained Kitchen Prescription was a food product because it described flavor, aroma and showed serving options.

There are many functional foods labeled as dietary supplements. That's because the regulations for using ingredients and making claims are more liberal for supplements than foods because of the Dietary Supplement Health and Education Act. For example, stevia leaf may be added to herbal teas labeled as dietary supplements, but not to beverage teas, which are regulated as foods.

Nutraceuticals, a term often used interchangeably with functional foods, is, more accurately, "parts of a food or a whole food that have a medical or health benefit, including prevention or treatment of a disease." Thus, the nutraceuticals definition is broader than that of functional foods. Included are dietary supplements or medical foods and functional foods. (See "Making Sense Of The Medical Foods Market") Nutraceutical is a variant on the term pharmaceutical and has spawned other terms, such as cosmeceutical, which is used to describe personal care products with defined benefits. (See "Cosmeceuticals: Functional Food For The Skin.")

Whole And Enhanced Foods
Though less publicized, traditional food items in a typical natural products store are functional and have a defined health benefit derived from a "non-nutrient" source. There is a great opportunity for retailers to point to whole food items in their stores as having health benefits as opposed to only suggesting dietary supplements to customers. A diet optimized for wellness should always rely on a core group of healthful whole food items first, with supplements added as necessary.

In what seems like an effort to make whole foods even more whole, several products have come to the market with additional functional components. For example, there are eggs that contain DHA and vitamin E. The quantities of these nutrients are enhanced in the eggs by feeding chickens a special diet. Yogurts are now fortified with additional probiotic bacterial strains or inulin, a prebiotic that helps support gastrointestinal health. Some salmon burgers are fortified with extra essential fatty acids; orange juice with additional vitamin C and calcium; and chewable confectionery products with dietary supplement ingredients ranging from calcium to glucosamine sulfate.

In addition to enhancing whole foods, manufacturers are adding new ingredients, to bars and beverages: arabinogalactan for immune system support and calcium D-glucarate for detoxification.

Dose Matters
Probably the most controversial aspect of functional foods is the explosion of products containing herbs and other botanicals. The Center for Science in the Public Interest has accused the natural products industry of using ingredients that are unproven, of using them at inconsequential doses and of using ingredients that are not Generally Recognized As Safe in foods.

Some new beverages and snacks have come under fire for having little scientific support for their claims and fairy dust levels of herbs. Retailers must demand to know how much of an ingredient is contained in the food, and how much is required for an efficacious effect. Most manufacturers say an adequate amount ranges from 25 percent to 33 percent of a supplement dose. This allows a consumer to have more than one serving a day without concern for adverse effects.

It is important to distinguish between the products that are truly functional and those that are mostly marketing hype.

Communication Is Key
The International Food Information Council Foundation completed a consumer telephone survey in 2000 in which it asked shoppers to identify their sources of information to determine health benefits of food. Respondents named medical sources and the popular media as their primary sources. Consumers do not perceive media sources (such as consumer magazines) to be as credible as medical sources (physicians, dietitians and nutritionists). Therefore, it is important for the natural products industry to educate not only consumers, but also key decision-makers in the health care field about the health benefits of functional foods and nutraceuticals.

Mary C. Mulry is a technical consultant for the natural products industry. Contact her in Boulder, Colo., at [email protected]

Natural Foods Merchandiser volume XXIII/number 3/p. 76, 82

Functional Foods: Give Shoppers Good Information

IFIC recommends these tips for communicating with consumers:

  • Accentuate the positive—consumers are tired of being told what not to eat. Take the opportunity to tell them what is good for them to eat.

  • Always cite credible scientific research when discussing functional foods.

  • Place functional foods in the context of traditional food.

  • Use terminology accepted by the FDA, such as "supports the health of" or "promotes normal healthy function of," as opposed to "cures" or "prevents" illnesses.

  • Health claims on packaging are not as powerful as information found in the media and elsewhere.

  • Emphasize that a varied diet is a healthful diet and that functional foods are not a panacea; they should be incorporated into an overall healthy diet.

Natural Foods Merchandiser volume XXIII/number 3/p. 82

Examples of Functional Foods

Functional Food

Key Component

Potential Health Benefits

Black and green tea


Reduce cancer risk



Reduce cancer risk


Omega-3 fatty acids

Reduce heart disease risk

Fruits and vegetables

Many different phytochemicals

Reduce cancer and heart disease risk


Sulfur compounds

Reduce cancer and heart disease risk

Oats and oat-containing foods

Soluble fiber beta-glucan

Reduce cholesterol

Purple grape juice

Polyphenolic compounds

Support normal, healthy cardiovascular function

Soy foods

Soy protein

Reduce cholesterol

Tomatoes and tomato products


Reduce cancer risk

Yogurt and fermented dairy products


Improve gastrointestinal health

Natural Foods Merchandiser volume XXIII/number 3/p. 82

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