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 | | SUPPLEMENTING THE FUTURE
(INTERNATIONAL FOOD INGREDIENTS MAGAZINE: APRIL/ MAY 2008) | | | CMP | | 15/05/2008 | | | Eleni Grammenou, industry analyst with Euromonitor International, looks at how the role for vitamins and minerals in the food industry is likely to keep on growing
The global fortified food and beverages market was worth an estimated US$97Bn in 2006, almost double the size of that for vitamins and dietary supplements, Euromonitor International research has found. Value growth was notably higher in 2006 for functional foods and beverages combined at 10%, compared to only 5% for vitamins and dietary supplements. The consumption of fortified products is growing strongly, and a flurry of innovative product launches has helped
to give a new/healthier image to foods and beverages under existing product umbrellas.
As this market matures, a number of “me too” products are being introduced, stealing share from leading branded products. To withstand competition, manufacturers need to find “the” next functional ingredient, but they need look no further than the vitamins and dietary supplements market. Given the increasingly ageing population, it will be no surprise to see foods and beverages being introduced which contain glucosamine or calcium components targeting joint and bone health in the elderly.
Combination products drive growth
Increased urbanisation in most developed countries has led to faster-paced lifestyles, and the need to maintain optimum health. Time-pressed consumers have little time to spare and are seeking quick and easy-to-use solutions for consumption on the go. Multivitamin combinations have proven ideal solutions for “first time buyers”, but more sophisticated consumers are starting to look for ingredients targeting specific health conditions. Glucosamine, for example, can be used for the prevention of a wide range of age-related conditions such as bone, joint and heart problems. Some ingredients have been shown to improve mood, help the digestive system and improve general health, and these are all expected to help the category develop even further. Dietary combinations targeting the prevention or treatment of a condition are expected to represent the basis of segmentation in the vitamins and dietary supplements and functional foods markets.
Ingredients such as omega-3 or glucosamine, which help treat conditions such as heart disease and joint problems, are expected to be the main themes in 2008. However, it is evident that even simple combinations are becoming more complex. Omega-3 products have many benefits but, so far, have been mainly promoted for heart health. Other uses include improving cognitive ability and memory in both children and adults, and helping in alleviating painful conditions such as arthritis. The fish oils market, as measured by Euromonitor, was worth almost US$2 Bn in 2007 and increased by 13% on the previous year, a clear indication of consumer interest in this product.
While omega-3 is already used in functional foods, other ingredients are being neglected. Glucosamine supplements, for example, generated US$1.8 Bn in 2007, but there has been limited glucosamine use in food, despite being proven to help with arthritis, rising due to the ageing population.
Traditional ingredients do not have to be boring. Garlic, for example, is known to benefit cardiovascular health, but due to its long-standing presence, this US$0.5 Bn market is growing at less then 1% annually. The Japanese market has shown that even mature and well-known ingredients such as garlic can capture consumer attention. In 2006, Kobayashi Pharmaceutical introduced Kobayashi Seiyaku Kuro-ninniku Korai Ninjin, with black garlic and ginseng (black garlic is reported to be five times more potent than normal garlic). Functional food manufacturers can learn from such innovative examples of revitalising existing ingredients.
With rising affluence and declining birth rates, consumers are increasingly focused on their wellbeing and are willing to spend more on maintaining their health to prevent the onset of disease. Condition-specific products are not only aimed at the older consumer but also at women, with combinations for pregnancy and menopause, particularly as established hormone therapies continue to be called into question. Menopause specific combinations, for example, account for around 6% of all dietary supplements.
Condition-specific developments will remain a focus for manufacturers as ageing baby-boomers look for ways to sustain health and stave off the early effects of ageing. Combination products represent a value-added offering for manufacturers and the opportunity to expand their consumer base to a wider audience.
Fashionable ingredients
Some of the most popular ingredients found in foods and beverages in the European market, and particularly in the UK, are probiotics, antioxidants, omega-3 and calcium. The functional/fortified market is a lucrative one, capturing the interest of many global food and drinks giants. Diet Coke Plus with vitamins and antioxidants, for example, was one of the most notable launches in the industry in 2007, with a successful strategy showing how traditional products can achieve a “healthier” makeover.
Functional packaged food could be favoured by consumers who like to supplement their diets in a more natural way. It is also a discreet way of supplementing the diets of fussy children. Omega-3, for example, has already been successfully incorporated into milk drinks and cereals.
Regional focus
Asia-Pacific is the biggest market for vitamins and dietary supplements and functional foods. The economic boom in the East, particularly in China and India, has raised overall levels of affluence, and increased consumer interest in personal appearance which, in turn, is stimulating a greater willingness to spend money on health, fitness and beauty.
In addition to the economic boom, consumers are becoming aware of the benefits of a good diet and are more conscious of the need to lead healthy lifestyles, stimulating interest in more beneficial food choices. However, at the same time, obesity levels are rising throughout the region.
As a result, food, drinks and consumer healthcare companies are under increasing pressure to take more responsibility for countering this global epidemic and respond to changing consumer needs. Their solution has been to introduce a range of fortified and functional foods, beverages and dietary supplements which claim to boost and promote optimal health.
The SARS and avian ‘flu outbreaks that swept the region in 2003 initiated widespread interest in functional products, vitamins and dietary supplements as a means of prevention and of boosting the immune system. At the same time, the global obesity epidemic and lack of nutritional balance also helped to stimulate early interest in these products. Current market statistics from Euromonitor show that strong demand for these products is expected to continue until 2010. This will be stimulated, in part, by new product launches as well as lifestyle changes resulting from the ever increasing fast pace of life in the region.
The Japanese functional foods market is the most innovative globally, and accounts for nearly half of the total value sales in Asia. Innovative launches have included Kagome Bifidus & Collagen yoghurt drink, which claims to improve overall skin health and beauty, and Shiseido Beauty Foods Pure White, a beauty drink with alpha-lipoic acid, vitamin C and enzymatically processed hesperidin, promoting whitening of the skin. GABA (gamma-aminobutyric acid), an inhibitory neurotransmitter offering a calming effect, has also been introduced in many drinkable formats for consumers wanting to alleviate stress.
Although Japanese consumers are open to new product innovations, the downside is that they are also very fashion-conscious, and products introduced in this market have a short shelf life. Thus, the need to innovate is a must to stimulate consumer interest and maintain company revenues.
Legislation to hinder growth?
In most European countries and the US, regulatory approval for functional products is inconsistent and can severely delay or restrict market access.
The only country with an established regulatory system in place for functional products is Japan. The FOSHU system is unique in that it focuses on the health claims of specific products. It is based on a list of approved product ingredients, which are permitted to make health claims on product labels if manufacturers can provide scientific evidence demonstrating the medical or nutritional basis for the health claim and ingredient safety information. FOSHU labelling is rapidly growing and increased the number of approved functional products from 442 in 2004 to 541 in 2005, an increase of 22%, and a favourable indicator for companies operating in this market.
A growing market
Fortified/functional products is an emerging market offering lucrative prospects for both food and beverage manufacturers looking to tap into the health and wellness trend, which is making its presence felt in most countries globally. Euromonitor believes that this market will grow dynamically by 34% over 2006-2011. Although segmentation in the functional products market is becoming more sophisticated and driving growth, legislation in most countries, however, is expected to restrict its potential.
Functional foods offer a natural way to supplement the diet, and these products will increasingly benefit from the growing vitamins and supplements market. Sophisticated segmentation, targeting specific lifestyles or health conditions, is expected to be the main driver of growth.
A key consumer demographic will be the elderly, looking to fend off age-related diseases. According to Euromonitor, the global vitamins and dietary supplements market is expected to grow by 18% over the 2007-2012 period.
All in all, consumers are expected to look to a combination of functional foods and vitamins and dietary supplements as the boundary between the categories becomes increasingly blurred.
www.euromonitor.com | |
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