Functional foods facing an uncertain future
Although the market seems set for further growth over the next five years, there remains considerable uncertainty over the future development of two key functional food categories: products promoting a heart health benefit and those that are marketed on an anti-ageing platform, according to the latest findings from Leatherhead Food Research.
Considerable confusion still exists around the concept of functional food with consumers receiving a barrage of contradictory messages from companies, the media, and government and medical authorities on the benefits of different types of products and how they should be consuming them. This has been a particular issue for phytosterol/phytostanol spreads, for example, which have had to compete against other heart-health polyunsaturated and omega-3 spreads, as well as other cholesterol-lowering foods. As such, they have seen sales stall, the report notes. The value of the cholesterol-lowering spread market in the UK in 2009 for example is forecast to be down by 10% on 2008, following a 10% decline in 2008 as well.
The regulatory situation is also key to the development of these markets, with the use of approved health claims increasing consumer confidence and allowing the market to develop along more clearly defined lines. The US has had regulations permitting certain types of claims for some years, but even there interpretation problems are causing difficulties. The ongoing review by EFSA in the EU could change the market radically, with market size and structure potentially altering drastically when claims are allowed or disallowed.
The heart-benefit foods sector has done relatively well out of the EFSA review to date, with approval for some claims concerning phytosterols and phytostanols, plus the Fruitflow anti-thrombotic tomato extract.
The EFSA review is likely to have wide reaching implications, with their expert opinions likely to be closely monitored here in Australia.
Despite considerable interest, continuing product innovation (over 150 product launches recorded between January 2007 and August 2009) and the fact that it is the largest sector of the functional foods market after digestive/gut health, the heart-benefit market remains relatively small in the context of the food market as a whole.
It accounts for less than 0.5% of the food and drinks markets across all countries covered in Leatherhead’s research, despite relatively high penetration levels in the US and Japan, with levels falling as low as 0.1% in countries such as Italy, Germany and France. This does offer considerable potential for future development, although the target audience is likely to remain largely limited to those who perceive themselves to be at risk from heart disease.
Key growth areas have been bakery and cereal products, due to the growing use of heart health claims relating to wholegrains in the US; fish and eggs, due to the increased marketing of oily fish on a heart-health platform; dairy products, where the active health drinks market has taken off; and soft drinks.
The principal heart-health ingredients being used tend to be those where scientific evidence of their efficacy is strongest and include soya, unsaturated fatty acids (including omega-3s), phytostanol and phytosterol esters, dietary fibre, vitamins C and E, folic acid, and potassium. Using recent patent activity as a guide to future trends, it is clear that phytosterols and phytostanols remain a particularly active area, following on from the acceptance of products such as Benecol and Flora pro.activ into the mainstream.
Another significant growth area is likely to be that of anti-hypertensive products containing ACE-inhibitory bioactive peptides. A number of products are now on the market, but most focus either on the Calpis Ameal S ingredient from Japan or on Evolus technology from Valio of Finland. A greater variety of products are likely to be launched in the future using more diverse sources.
Functional ingredients face the problem of establishing recommended intake levels and their efficacy in terms of the number of different health benefits attributed to them, including heart, brain and eye development.
Assuming that the claims situation does not undergo radical change resulting in the repositioning of certain products away from heart health, particularly in the US, overall sales in the heart benefit food and drink sector look set to rise at least 40% over the 2009 to 2014 period to reach over US$15.1 billion (A$16.4b).
Potential for growth
In view of the ageing structure of the population and the predicted increase in age-related disorders, there is significant scope for the further development of food and drink products containing selected anti-ageing ingredients. Many of the active ingredients used, such as antioxidant vitamins, omega-3 fatty acids, co-enzyme Q10 and glucosamine are already highly successful in the dietary supplements market in many countries, and awareness of their benefits is high, so it is a question of the extent to which growing interest in positive nutrition is likely to persuade consumers to buy fortified foods and drinks to consume as part of their everyday diets. The US is already addressing this issue in a number of areas by launching products straddling the supplements and everyday foods and beverages markets, offering lines with some of the characteristics and benefits of each.
Joint health and eye health are likely to see the most activity in terms of product development and consumer acceptance as they are clearly understood conditions and recent studies suggest strong evidence in the use of omega-3 fatty acids and glucosamine in the improvement of joint health, and the use of lutein in eye-related disorders.
As the proportion of older people within the total population increases and with rising concerns over dementia, Alzheimer’s and cognitive decline, the brain health category is set for strong growth over the next few years, although it remains to be seen how much in the way of sales the food and drinks market can take from the dominant supplements sector.
There are few brain health foods targeted specifically at older people, with many, particularly those fortified with omega-3 fatty acids, taking a more general health positioning or focusing on products for children and/or families. Focus on older consumers has been very limited to date, and this could be regarded as a key opportunity if scientific evidence can be provided and relevant claims permitted.
Skin health is also an emerging sector. The Japanese market is well established but now felt to be relatively static, while the US, European and Australian markets are virtually undeveloped and likely to see considerable growth over the next few years.
The market for the four sectors of joint/eye/cognitive/skin health is likely to more than double over the next five years, reaching at least US$5bn by 2014, with Japanese skin health/beauty foods and drinks continuing to dominate, although much faster growth rates are likely to be seen in the US and Europe, particularly for cognitive and skin health products.
Soft drinks seem set to remain the major product category involved in product development in anti-ageing foods, having already proved themselves as successful carriers of other types of functional ingredients. Mainstream activity has been growing strongly, particularly for juices and juice drinks, although there are also a growing number of enhanced water and RTD tea products.
The sector seeing most development over the past five years, however, is that of dairy products, which was previously largely limited to Japan, but emerged strongly into Europe, led by the launch of Danone’s Essensis skin care/beauty probiotic dose-delivery drink. Despite the failure of Essensis, the dairy sector has a strong existing presence in functional foods, particularly via dose-delivery active health drinks, and is likely to see further development in the future, Leatherhead Food Research concludes.