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We went to some of the top trend-tracking and resource groups to distill the shifts and changes in good-for-you product supply and demand of the past year. Organizations that contributed generously to this issue include Datamonitor USA (www.datamonitor.com), New York, as well as Business Insights Ltd. (www.globalbusinessinsights.com), London; Hort Research (www.hortresearch.co.nz), Auckland; Innova Market Insights (www.innova-food.com), Duiven, Netherlands; the International Food Information Council (www.ific.org), Washington; and Mintel International Group Ltd. (www.mintel.com), Chicago. Their invaluable input helps us provide you with a comprehensive picture of the trends impacting the quarter-trillion dollar healthy foods industry.
Market analysis group Business Insights Ltd. reported earlier in the year that “the following key market trends will comprise the lion’s share of the future of wellness foods and beverages:
And according to the Helmut Kaiser Consultancy group, Tubingen, Germany,(www.hkc22.com), about 400 Companies worldwide in R&D and Production use nanotechnologies and molecular science in food processing.
“Energy is top, and will remain top,” asserts Datamonitor’s “Insights Into Tomorrow’s Nutraceutical Consumers” report. “Energy is the biggest functional need driving U.S. nutraceutical sales. Americans bought energy-boosting products worth $6.5 billion in 2004, accounting for a third of total nutraceutical sales. Energy products are concentrated within the confectionery and soft drinks categories, but also include other products ranging from fortified peanuts through to nutraceutical flatbreads.”
Heart-health is the second largest category, reflecting millions of Americans' susceptibility toward cardiac problems. The market was worth $4.1 billion in 2004, and sales have been growing by more than 8 percent per year over the past five years. Heart-health products range from cereal to olive oil, covering all products that the FDA recognizes as reducing the risk of coronary disease.
Nutraceutical products targeted at gut health are of limited popularity in the U.S., despite being a leading category in Europe. This reflects the relative unpopularity of active yogurt in the US because of consumer wariness - a large proportion of gut health products in Europe are in this category. However, as tastes start to change, gut health has been by far the fastest-growing nutraceutical category in the US, with annual growth of more than 23 percent over the 1999 to 2004 period.
Designing and producing food by shaping molecules is the future of the food industry, according to Helmut Kaiser. The consultancy also predicts nanotechnology and nano-bio-info convergence will influence over 40 percent of food industries to 2015. The nanofood market doubled from $2.6 to $5.3 billion from 2003 to 2005 and is expected to reach $20.4 billion in 2010. The risk for the food companies lies not in not entering the nanotechnology, but entering too late.
Business Insights points to young adults as the key marketing targets for new healthy food and drinks: growing consumer awareness of the benefits of consuming certain ingredients, are likely to be more health conscious and have less cemented purchasing/consumption patterns.
The group believes snacks to be the most innovative category in healthy food and drinks. The reasoning is that snacks can easily be reformulated; single-serve products provide convenience to the functional food and drinks consumer.
According to Datamonitor, “Manufacturers believe the most important functional products to consumers are those targeting weight loss and energy needs, while long-term health concerns are the least important aspects of well-being. This reflects a tendency for nutraceutical consumers to focus on the short-term benefits of products, as would be expected from their general consumption behavior.”
Health Management is a broad category encompassing some of the driving forces behind many health trends that have come into their own over the last couple of years. Certain health crises and diseases, here presented as subcategories of health management, are doing the driving: cancer, heart disease and arthritis.
But immunity against these conditions is also included as representative of how a trend can result from a proactive direction; rather than react to disease states plaguing our population, developers of wellness foods and beverages are trying to get ahead of the curve.
According to Datamonitor’s report, “Insights Into Tomorrow’s Nutraceutical Consumers,” almost 25 percent of people suffer from heart-health problems, including high blood pressure — the key risk factor for most other lifestyle-related heart disorders. This reflects the high levels of stress and obesity, poor diet and limited exercise among Western consumers of all ages. There is a strong potential market in all countries considered for food and drink that can help heart health.
Cardiovascular disease is the lead cause of mortality in the U.S. among both men and women in every major ethnic group. It accounts for nearly 1 million deaths per year and is responsible for about one in five deaths in the U.S. Stroke is the third leading cause of death in the U.S. after heart disease and cancer. According to the American Heart Assn., stroke accounted for one in every 15 deaths in the U.S. It’s estimated the number of persons suffering high blood cholesterol/triglycerides million will reach nearly a third of a billion 2015.
Anthocyanins and antioxidants (such as the carotenoids beta-carotene, lycopene, lutein, zeaxanthin) and isoflavones (and other soy ingredients) remain important functional ingredients, and all are experiencing strong upward-trending growth. These ingredients, and the products containing them, are marketed for their cancer-protective effects.
David Suriani, industry manager of food and beverage for BASF North America, Florham Park, N.J., has noted, “There has been increased interest in ingredients such as lycopene and omega-3 fatty acids as food processors begin to understand better the cardiovascular benefits of carotenoids and polyunsaturated fatty acids. In general, beta-carotene, lycopene, and lutein react synergistically they work more effectively in combination.”
|Coenzyme Q (CoQ-10), briefly on the health radar screen in the 1990s, may be poised for a more recognized return. The supplement is known to specifically strengthen the heart muscle. However, since few foods are rich in CoQ-10, it has to be added to formulations.|
Phytosterols and omega oils really pushed to the forefront this year. Phytosterols in their most natural format green tea – or as specific extracts or extract combos, such as DSM Nutritional Products Inc.’s Teavigo brand of epigallocatechin gallate (EGCG), and Cargill Inc.’s Corowise or ADM Corp.’s Cardioaid brand of sterols, phytosterols have been included in dozens of beverage and bar formulations, as well as yogurts and spreads.
Omega oils have enjoyed a wider dispersal into the food chain of late. Odorless, flavorless highly-stable versions of fish-derived omega 3s by such manufacturers as Ocean Nutrition Canada Ltd. (www.ocean-nutrition.com), Nova Scotia, plus increased availability of plant and algae sources, have seen the versatile nutraceutical supplied to products as diverse as breads, bars, breakfast foods and beverages.
While worldwide demand for omega oils in supplemental form more than doubled last year,” says Ian Lucas, executive vice president of global marketing for Ocean Nutrition, “our company alone has provided more than two billion servings of omega for foods and beverages across 10 different product types since January.”
Cancer is a class of diseases noted for unchecked, aberrant cell growth and proliferation. Suspected causes of cancer are numerous, but cell damage caused by genetic, environmental and dietary causes has been checked in studies by antioxidant compounds. In fact, the connection between antioxidant intake and reduction of cancer risk is one of the more heavily studied nutrition links, and shows some of the strongest results.
Controversial reports from new studies questioning the levels of efficacy of isoflavones, and soy in general, had some manufacturers worried earlier in the year. But soy showed its staying power as a healthful functional food. According to Tom Woodward, vice-president of Devansoy Inc. (www.devansoy.com), Carroll, Iowa, “Recent data show the U.S. soyfoods market will continue to steadily grow for years to come. In fact, the market for soyfoods in the U.S. is expected to grow at rates of nearly 20 percent per year through 2012. Included in this growth will be baked goods, desserts, beverages, cereals & energy bars and more.”
One seasoned veteran of the nutritional ingredient category is nuts (almonds, walnuts, pecans and others). The popularity of nuts for health continues to grow, and for a number of good reasons. Nuts are sources of omega 3 oils, antioxidants (including the antioxidant mineral selenium), minerals and protein.
|“Manufacturers should not only focus on the long-term benefits of nutraceutical products,” say Datamonitor experts, “but on the short-term ones as well – chiefly, beauty and anti-ageing properties. This should help to attract consumers who are not sufficiently motivated by the long-term effects to overcome their desire to stick with cheaper non-nutraceutical products.”|
Nuts are attracting new interest by manufacturers and consumers for their heart-health benefits specifically, too. A study from the University of Toronto, reported by the Almond Board of California, described how almonds, reduces inflammation by about the same level as taking a first-generation statin drug.
Another macroingredient class seeing huge gains recently is the red and purple fruits, such as blue and blackberries, currants, tart cherries, grapes and tomatoes (botanically a berry). As whole fruits, dried fruits and fruit extracts, all are sources of antioxidant anthocyanins and polyphenolics. Added to this roster are pomegranate, açai, mangosteen and goji berries. All have become favorites of beverage and food manufacturers lately. Also, they’ve aided the sudden rush on other “exotic superfruits” high in antioxidants and other healthful compounds.
Açai is a sterling example of a superfruit trend, coming off a remarkable year that has seen it go from relative obscurity to household word faster than any ingredient since oat bran. Speaking of oats, that grain, barley and whole grains in general and are another group of macroingredients hitting the right note for processors focusing on heart health and other health management needs.
”Pomegranate has set the tone for the breakout of ‘superfruits’ with açai rapidly ascending,” says Tom Vierhile, director of Productscan Online for Datamonitor. “Black currants also are appearing more prominently these days, though these are much more common in Europe. Goji berries are just beginning to make a big splash in health and natural products circles, while mangosteen has yet to really break out but has potential to do so.”
Vierhile notes there are other fruits that could be included under the banner of superfruits but common high-antioxidant fruits such as blueberries, while not “currently grabbing headlines,” are important enough that there have been supply shortages, especially for the health and natural products industry.
Aging, including energy and memory, came up fast as trends secondary to the market demographic juggernaut of baby boomers who began to turn 60 in 2006. This Peter Pan generation is in charge and too busy to become the seniors its parents’ generation was. Having the stamina and mental acuity to stay in charge is of prime importance.
The trend toward foods to enhance immunity is indicative of how deeply science has become a part of food. Antioxidants are a big part of the immunity domain. Noting a nearly fourfold increase in products claiming to contain antioxidants or make an Immunity-related Claim since 2002 (see charts), Productscan director Vierhile explains, "There are a couple of different things going on. The first is that there is a certain “trendiness” to the antioxidants claim. It sounds more “sophisticated” to say a product is ‘high in antioxidants’ instead of ‘high in vitamins.’ I'm not sure the average consumer knows exactly what antioxidants are, but there’s a growing realization antioxidants are good for you.”
Anti-aging beauty benefits are an emerging niche, according to Datamonitor. Consumers are increasingly accepting the notion of “supplementing beauty from within.” The implication is a “moving away from a passive acceptance of deteriorating physical health and beauty caused by aging by taking a more active stance.”
Functional foods, drinks and dietary supplements offering beauty benefits, or as Datamonitor classifies them, “Oral Beauty Products (OBP),” are developing a growing following, particularly since the inception of Innéov, a joint venture between Nestlé and L’Oreal. A growing awareness of the link between diet and health – and by extension physical appearance – means many consumers are receptive to the concept of ‘beauty from within’.
The OBP market is still nascent – although markets are growing fast, running in excess of 10 percent in France and Germany and above 20 percent in the U.S. and the U.K. The current focus is on supplements rather than on functional foods and drinks, but this mirrors the historical development of the nutraceutical market (where vitamin supplements became popular earlier than fortified foods). As consumers become more used to the idea of specific “beauty pills,” so they will become more used to the idea of specific beauty foods and drinks.
Datamonitor reports that promoting nutrients for their role in skin and hair health leads consumers to “understand they can look beautiful and healthy on the outside while maintaining health on the inside.” However, also of great significance to our aging population is the nutritional role in maintaining supple joints and addressing the effects of menopause.
Anti-aging benefits are not exclusively relevant to middle-aged women (generally perceived as the core market for functional beauty products). According to Datamonitor, men are increasingly interested in anti-aging issues.
“Male Early Seniors” and “Late-Midlifers” remain a relatively untapped market for functional beauty products. “Manufacturers could grow nutraceutical penetration among this group by focusing on their beauty and anti-aging needs,” note Datamonitor experts. “Beauty foods, beverages and supplements can also appeal to time-pressed younger consumers; swallowing a pill or drinking a fortified shake is less time-consuming than a nightly moisturizing and skin toning regimen. There is an opportunity for manufacturers to develop ‘beauty-supplementing’ foods and beverages.”
|As people become increasingly focused on health and nutritionally aware, the health concerns targeted by functional and other fortified products will shift. There will always be demand for weight-loss and energy-giving products, but the longer-term factors consumers currently sweep under the carpet will rise in importance — and consequently in consumption potential.
Much of this awareness will be driven by health campaigns on the part of government and the food and drinks industry. Already, awareness of heart-health issues is far higher than it was in the recent past. At the moment, this does not always tie into heart-healthy behavior, but this will change over time. Foods and drinks that target the heart, the eyes and the bones will become increasingly important across the U.S. and Europe. People will also increasingly consume nutraceutical products for anti-aging and beauty reasons.
Our aging population – the over-65 demographic is expected to roughly double in the next couple of decades – is bringing more attention to bone-health problems. The Datamonitor report, “Insights Into Tomorrow’s Nutraceutical Consumers,” reveals that the numbers of consumers with bone health problems have increased 1 percent a year in Europe and by more than 2 percent per year in the U.S. from 1999 to 2004.
This is significantly above population growth; there is a close correlation between poor bone health and age (so much so, official osteoporosis statistics only include people over 55 years old). The increased prevalence of arthritis has been driven almost entirely by population ageing.
Although calcium and vitamin D are the ingredients typically associated with bone health, recent research indicating their benefits for heart-health and even cancer protection has only helped to enhance their attraction. Calcium, especially, is finding its way into more and more products, especially beverages other than milk, soy and orange juice, for example waters and soft drinks.
Europe is way ahead of the U.S. when it comes to concerns regarding gut health. Social taboos in America made it hard to market foods and beverages for a “healthy bowel” until only very recently. That’s finally changing. Many nutraceutical products are targeted at maintaining gut health.
However, the number of consumers suffering from serious medical conditions affecting the gut (defined here as inflammatory bowel disease, which exists both as ulcerative colitis and Crohn’s disease) is low. There are only about one million people in the U.S. currently diagnosed with these bowel diseases. This has not stopped gluten-free products from landing at the starting gate of trendiness. The number of gluten-free products hitting the market has jumped, but whether they stay popular is too soon to tell.
But the data strongly suggest there are “outlying” consumers of gut-health products, specifically probiotic yogurts and similar products, who believe – correctly, for the most part – that these products enhance their health status. Probiotic yogurts contain live cultures which promote the growth of healthy bacteria.
Researchers have determined this growing popularity of gut health products is not only from their having been heavily marketed to health-oriented consumers but because such products are perceived as providing additional benefits, such as enhancing the immune system.
According to Datamonitor’s study, “New Consumer Insight: Overweight Consumers and the Future of Food and Drinks,” the obesity crisis is still growing. Awareness is no longer the problem. And, although significant urban populations live in “food deserts” that put little but fast food within their reach, for many American consumers the availability of healthier foods is sufficient enough to not block averting or reversing obesity.
Involved processors have been taking a more aggressive approach by ramping up the sheer number of choices for healthier foods and beverages for weight management.
Although the U.S. has by far the highest proportion of overweight and obese consumers, with 65.8 percent of the adult population estimated to be in the category in 2004, some European countries are not far behind. Germany and the U.K. in particular stand out in Europe, with 54.2 percent and 61.6 percent of consumers, respectively, being overweight and obese in 2004. However, the number of overweight consumers in the US will continue to grow fast.
According to the World Health Organization, obesity has reached epidemic proportions globally, with more than one billion adults overweight and at least 300 million clinically obese. The rising epidemic is a major contributor to the burden of chronic disease and disability and reflects the profound changes in society and in behavioral patterns of communities over recent decades.
Consumers of all ages are increasingly concerned about obesity, as obesity and overweight rates rise to record levels among adults and children alike. As a result, the market for diet products has reached $42 billion in the U.S., and is growing at a rate of about 3.5 percent per year. “Diet foods are not functional foods since they are characterized by an absence of calorific or fatty ingredients rather than the presence of other ingredients. However, there is scope for functional products to target dieting consumers in two major ways,” say Datamonitor experts.
|According to IFIC studies, 40 percent of women mentioned weight as a top point of interest whereas only 27 percent of men thought it priority one. However, 40 percent of men singled out heart disease or heart attacks though only 29 percent of women shared the same priority. Almost nine in 10 men and eight in 10 women wanted to learn more about incorporating healthful foods, although one third of Americans age 25 to 34 years made no changes to their diets. However, 40 percent in the 45 to 54 age group had made dietary changes. Of those, two-thirds did so by removing “less healthful foods and beverages.” And, nearly half of the women age 18 to 24 said they were “were most likely to augment their diets with healthful components.”|
One way is the manufacture of “low-and-light” nutraceutical products. Early examples were spreads, such as McNeil Nutritional’s Benecol and Unilever USA’s Promise, providing putative health benefits through reduction of dietary cholesterol. Even within energy drinks, products such as Diet Red Bull have achieved significant sales in many geographies. This suggests a demand for the caffeine and other fortified components without the sugar and its resultant calories.
But the emerging strategy is development of functional products specifically targeting consumer weight-loss needs not via displacing higher-fat foods, but by “having a direct functional effect that drives weight loss.” Such products are referred to as “negative calorie” products.
Negative calorie products are said to influence metabolism via stimulants, such as caffeine, guarana, ginseng or maté (also called “yerba maté”), to the point of using as many or more calories as is in the product itself. Maté, which provides stimulation from a chemical analog of caffeine called xanthine, is poised on the verge of mainstream popularity. A number of beverages containing mate have been rolled out in just the past few years.
Some negative calorie products are also marketed as appetite suppressors, a trait long associated with stimulants. So far, these products have emerged primarily in the beverage category. Beverages with no calorific value are more practical to produce than foods. However, there may be scope to develop functional foods with the same aspects, and in fact a few such confectionary products, such as chocolates, mints and breath strips, are already on the market.
Childhood nutrition needs figure large, especially considering the childhood obesity and diabetes crisis. According to the U.S. Surgeon General, an estimated 40 percent of overweight children and 70 percent of obese children will remain overweight or obese through adulthood. This suggests the obesity epidemic will be with us for at least another generation or more.
The millions of children who are either overweight or obese accounts for the dramatic surge in type 2 diabetes. As with their adult counterparts, obese children are far more likely than their contemporaries to suffer any number of concomitant health problems and risks.
An analysis of recent product launches on Productscan shows that in categories such as snacks, bakery and cereals and soft drinks, brands are targeting parents more than kids. But in 2001, kids’ brands in these categories targeted kids with exciting flavors, sweet tastes and a fun factor. For example, in 2001 manufacturers of ready meals targeted kids through bright colors, cartoon characters on the packaging and with food such as chicken nuggets and burgers in fun shapes.
|According to the International Food Information Council (IFIC), Washington, “Consumers want to embrace the latest trends related improving their nutrition and remain attentive to food and nutrition science, but they find themselves inundated with information that falls short of clearing confusion. In fact, nutrition messages often contribute to consumer misunderstanding and information overload. That is why everyone in the communication chain should focus on providing information tailored to boost consumer knowledge and support targeted behavior modification.
Previous qualitative and quantitative research from IFIC has shown that conflicting and impersonal nutrition messages on emerging dietary trends can lead to consumer frustration. For example, one day fiber reportedly helps prevent disease, but the next day it does not. Unfortunately those who report nutrition news often lack a technical background, so the messages provided do not fit within consumers’ lifestyles. The bottom line to achieve behavior change is the message must possess applicability and actionability.
Anyone communicating nutrition information, especially food manufacturers and product marketers, should incorporate the following tips for maximum consumer understanding and benefit:
For more information please visit: www.ific.org.
However, five years later manufacturers of ready meals are producing ready meals low in sugar, fat and sodium, as well as organic varieties. As a result, these processors are targeting parents’ concern for their child’s health more.
Additionally, in 2001, fruit and vegetables were targeting parents, since children were not interested in eating fruit and vegetables. Today, manufacturers of produce are packaging their products in convenient, hand-held, no-mess portioned packets while using popular cartoon characters to attract attention to the healthy products.
The child obesity crisis has led to a renewed interest in earlier healthy food starts. According to a recent report by Mintel, baby food and drink companies are looking for new options to boost sales within the $3.5 billion-plus baby food and drink market. The report states, “Toddler-focused foods and organic products are new avenues manufacturers can explore to address new markets within the category.
"There is a stronger emphasis placed on nutrition and combating obesity in the younger years than ever before," said Erin Fowler, analyst for Mintel. "Parents are looking for the proper nutritional mix for their children earlier. However, they are still feeling the pressures of a time-deprived society, so more convenient offerings that can promote better health for toddlers are a necessity.”
The organic baby food and drink category has experienced growth and is positioned for greater development. Premium prices have supported sales growth for several organic brands, according to Mintel, and the healthy images organic brands portray influence some consumers to “open their wallets a little wider.” Additionally, more than 60 percent of consumers surveyed by Mintel say that “a food being ‘all natural’ is ‘very important’ when they are choosing baby foods and drinks.”
Other top ingredients poised for growth, according to Fortitech, include fibers, proteins, soy isoflavones, CoQ10, plant extracts and probiotics. Fanion cautions, “The challenge for manufacturers is incorporating these ingredients and other nutrients into beverages, while avoiding the bad taste, sedimentation and other consequences that often result from ingredient interaction.”
“The demand for functional foods and fortified products continues to surpass most industry professionals’ expectations with each passing year,” says Mark Fanion, communications manager for Fortitech Inc. Schenectady, N.Y. (www.fortitech.com). According to Fanion, 2006 was no exception. “The booming industry had led to a still-growing surge for products with added-nutrients.”
In a 2006 Nutrition Market Trends report based on surveys of Fortitech’s list of nutraceutical ingredient purchasers, there was noted a growing demand worldwide for the health benefits from fortified products, particularly those with organic, natural or energy-boosting ingredients.
According to the report, this trend is “reflective of the consumers desire to maintain and improve energy, reinvigorate and replenish body fluids, manage weight gain and enhance the nutritional value of popular foods and beverages.”
Among the “high-demand ingredients” the company noted being researched by consumers are: calcium for bone health, beta-carotene, a beneficial antioxidant and antioxidant vitamins including A, C and E. “Iron, selenium and Omega 3’s are also quickly rising in popularity,” the report noted.
“Yogurt and oils containing DHA/EPA as well as mixed tocopherols also have solid market potential in the coming years,” says Fanion. “In addition, phytonutrients and sterols are becoming popular additions to many emerging products maintaining taste, texture and stability in finished products.”
Not surprisingly, children and teens combined account for the most researched market for 2006. Because of differing food patterns and high requirement for certain nutrients in children compared to adults, children are at greater risk of developing deficiencies of key nutrients and micronutrients.
Product manufacturers and nutrition professionals are just now scratching the surface of the potential demand in fortified products dealing specifically with the boomer market. too. Bottled water and functional beverages overall are still rapidly growing in popularity, with no decline anticipated.
There are growing numbers of functional soft drink products ranging from health-driven nutraceutical and vitamin-enhanced products, including waters and energy drinks offering specific benefits for specific health concerns. The beverage market is dynamic, with virtually unlimited potential. The factors that will shape the future of the beverage industry include health, flavor and ingredient innovation, and targeting of specific age groups.
Many studies have shown consumers are as concerned with good health as they are about maintaining a high quality of life. The majority of consumers believe some foods and beverages contain active ingredients that reduce the risk of disease and improve long-term health. Higher nutritional education, among all demographics, has a lot to do with this increase in demand. This new awareness of the beneficial health impacts of food and beverage fortification has fueled the double digit growth of the functional foods and beverage market worldwide and will continue to do so for many more years.
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