Functional Foods and Beverages in the U.S., 4th Edition

Table of Contents

Chapter 1: Executive Summary

• Scope and Methodology
• Scope of Report
• Exclusions
• Report Methodology
• Introduction
• Nutraceuticals and Functional Foods
• Governmental Regulation of Health Claims
• Types of Health Claims
• FDA Warns Marketers of Drug Claims
• Global Market Context
• Health Concerns on a Global Scale
• Key Global Players
• Global New Product Introduction Trends
• Market and Marketer Overview
• Total U.S. Sales Reach $30.7 Billion
• Figure 1-1: U.S. Retail Sales of Functional Foods and Beverages, 2006-2008 (in billions of dollars)
• Functional Foods Less Vulnerable to Economic Downturn
• Growing Health Concerns and an Aging Population
• Aging Boomers and Chronic Conditions
• Market Projections: Sales to Hit $43 Billion by 2013
• Competing in Functional Foods and Beverages
• New Product Development
• "High Vitamins," "Upscale" Gain as Functional Product Tags
• Fiber and Whole Grains Galore
• Probiotics and Prebiotics: Focus on Digestive Health
• Half of Consumers Have Purchased High-Antioxidant Products
• Omega-3 Fatty Acids Going Strong
• Soy Products Proliferate
• Superfruits: Juices and More
• Beyond the Fruit: Chocolate, Tea and More
• Organic Introductions
• Products Targeting Women
• Products Targeting Children
• The Consumer
• High Levels of Receptivity to Functional Foods
• Figure 1-2: Distribution of Consumers by Level of Agreement with Statement, "I Am Buying More Foods/Beverages Because of Their Specific Nutritional Benefits," February 2009 (percent)
• Purchasing Rates by Product Characteristics
• Demographic Trends

Chapter 2: Introduction

• Market Definition
• Defining "Functional"
• Exclusions
• Nutraceuticals and Functional Foods
• Governmental Regulation of Health Claims
• Types of Health Claims
• Health Claims That Meet Significant Scientific Agreement (SSA)
• Qualified Health Claims
• Structure/Function Claims
• Nutrient Content Claims
• FDA Warns Marketers of Drug Claims
• Medical Organization Logos
• Marketers Identify Functional Products
• Key Nutrients and Ingredients
• Vitamins
• Minerals
• Dietary Fiber
• Probiotics and Prebiotics
• Soy Protein and Soy Isoflavones
• Omega-3 Fatty Acids Going Strong
• Herbal and Botanical Ingredients
• Table 2-1: U.S. Functional Food Market: Key Nutrients and Ingredients, 2009

Chapter 3: Global Market Context

• Health Concerns on a Global Scale
• Figure 3-1: Key External Drivers in the Global Food and Beverage Industry (percent)
• Nutrition and Obesity
• Key Global Players
• Table 3-1: New Functional Product Introductions from Leading Global Marketers, 2004-2008 (number of product introduction events)
• Global New Product Introduction Trends
• Table 3-2: New Functional Product Introductions: By Global Region, 2004-2008 (number of product introduction events)
• Figure 3-2: Share of New Functional Product Introductions: By Global Region, 2008 (percent)
• Regional Trends
• Table 3-3: Top Functional Product Categories: Asia/Pacific, 2004-2008 (number)
• Table 3-4: Top Functional Product Categories: Europe, 2004-2008 (number)
• Table 3-5: Top Functional Product Categories: Latin America, 2004-2008 (number)
• Table 3-6: Top Functional Product Categories: Canada, 2004-2008 (number)
• Opportunities in International Functional Food Markets
• Latin America
• Asia
• Russia and Eastern Europe
• Looking Ahead: Health Concerns Will Shape Marketing Strategies

Chapter 4: Market and Marketer Overview

• Retail Sales and Market Share Trends
• Total U.S. Sales Reach $30.7 Billion
• Figure 4-1: U.S. Retail Sales of Functional Foods and Beverages, 2006-2008 (in billions of dollars)
• Supermarkets at 39% of Sales
• Figure 4-2: Share of U.S. Functional Food and Beverage Sales by Retail Channel, 2008 (percent)
• IRI-Tracked Sales of Key Functional Categories at $10 Billion
• Table 4-1: Mass-Market Sales in Key Functional Food and Beverage Categories, 2003-2008 (in millions of dollars)
• Table 4-2: IRI-Tracked Sales of Key Functional Food and Beverage Product Categories, 2007 vs. 2008 (in millions of dollars)
• Foods Account for 59% of IRI-Tracked Functional Product Sales
• Table 4-3: IRI-Tracked Sales of Key Functional Food and Beverage Categories by Classification, 2003-2008 (in millions of dollars)
• Figure 4-3: Share of IRI-Tracked Sales of Key Functional Food and Beverage Categories: By Classification, 2003-2008 (percent)
• Market Outlook
• Introduction: Food Spending in Times of Economic Crisis
• Table 4-4: Quarterly Personal Consumption Expenditures on Food vs. Overall Goods & Services, 2006-2008 (in billions of dollars)
• Table 4-5: Consumer Price Increases for Food, Food at Home and Food Away From Home: May 2008 through February 2009 (percent increase)
• Figure 4-4: Consumer Distribution Based on Change in Financial Situation, 2008 (percent of U.S. adults)
• Table 4-6: Attitudes Toward Healthier Foods and New Nutritional Products in Relation to Personal Financial Situation, 2008 (percent and index)
• Functional Foods Less Vulnerable to Economic Downturn
• Changes in Spending Habits
• Rising Food Costs
• Figure 4-5: Consumer Price Index for Selected Food and Beverage Categories: 1999-2008
• Table 4-7: U.S. Functional Food and Beverage Market: Percentage Change in Dollar vs. Volume Sales by Product Category, 2007 vs. 2008 (in millions of dollars)
• Growing Health Concerns and an Aging Population
• Obesity and Health
• Consumers Seeking "Wellness"
• Aging Boomers and Chronic Conditions
• Table 4-8: Projected U.S. Population by Age Bracket: 2007, 2010 and 2015 (in thousands)
• IFIC Study on Diet and Health Connections
• Packaged Facts Survey Confirms High Consumer Interest in Functional Foods
• Table 4-9: Percent of U.S. Consumers Who Have Purchased Beverage Products in the Last 12 Months Because of Special Nutritional Benefits, 2009
• Table 4-10: Percent of U.S. Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Specific Nutritional Content, 2009
• Table 4-11: Percent of U.S. Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Their Nutritional Benefits in Relation to Specific Health Conditions or Concerns, 2009
• Table 4-12: Level of Agreement with Statement, "Rather Than Vitamin/Supplement Pills, I Prefer to Buy Foods or Beverages with Specific Nutritional Benefits," February 2009 (percent of U.S. adults)
• Figure 4-6: Level of Agreement with Statement, "I Am Buying More Foods/Beverages Because of Their Specific Nutritional Benefits," February 2009 (percent of U.S. adults)
• Ramping Up Research & Development
• The Role of Convenience
• Lessons from Organic Market
• Table 4-13: Consumer Attitudes About Buying Organic Foods and Beverages, 2009 (percent of U.S. adults)
• Traditional Supplements Still Going Strong
• Figure 4-7: U.S. Retail Sales of Nutritional Supplements: 2003, 2007 and 2012 (in millions of dollars)
• Competition from Restaurants and Take-Out
• Market Projections: Sales to Hit $43 Billion by 2013
• Table 4-14: Projected U.S. Retail Sales of Functional Foods and Beverages: 2008-2013 (in millions of dollars)
• Marketer Overview
• Competing in Functional Foods and Beverages
• Highlighting Naturally Health-Beneficial Ingredients in Existing Product Portfolios
• Extending Existing Brands with Fortified Products
• Acquiring Smaller Marketers Active in Functional Products
• Launching New Functionally Oriented Brands
• The Competitors
• Table 4-15: Selected U.S. Functional Food and Beverage Marketers, Brands and Products, 2009

Chapter 5: New Product Development

• Trends in New Product Introductions
• Added Nutrients Fuel IRI New Product Pacesetters
• "High Vitamins," "Upscale" Gain as Functional Product Tags
• Table 5-1: Number of U.S. Functional Food and Beverage New Product Introductions: By Package Tag/Claim, 2006-2008
• Table 5-2: Number of U.S. Functional Food and Beverage New Product Introductions: By Package Tag/Claims for Selected Product Classification, 2008
• Functional Drinks Category Leads in Product Introductions
• Table 5-3: Number of U.S. Functional Food and Beverage New Product Introductions: By Product Category, 2003-2008
• Functional Ingredient Trends
• Fiber and Whole Grains Galore
• Probiotics and Prebiotics: Focus on Digestive Health
• Good Bacteria Growing in Popularity
• Probiotic Claims Require Careful Handling
• Prebiotics Encourage Friendly Flora
• Half of Consumers Have Purchased High-Antioxidant Products
• Superfruits: Juices and More
• Table 5-4: New Product Introductions with Select Superfruits, 2004-2008 (number)
• Table 5-5: Purchasing of Selected "Superfruit" Beverage Types Within The Past 12 Months, 2009 (percent of U.S. adults)
• Beyond the Fruit: Chocolate, Tea and More
• Omega-3 Fatty Acids
• Flax Seed as Source of Omega-3
• Omega-3 Market Growth in Question
• Despite Questions, Omega-3 Maintains Mainstream Appeal
• Soy Products Proliferate
• Organic Introductions
• Figure 5-1: Levels of Agreement with Statement, "I Am Usually Willing to Pay More for Organic Foods, 2009 (percent of U.S. adults)
• Targeted Functional Product Types
• Condition-Specific Products Aimed at Boomer Market
• Heart Disease and Cholesterol
• Beauty Foods Fight Signs of Aging
• Figure 5-2: Levels of Agreement with Statement, "I Like the Idea of Foods and Beverages That Provide Beauty Benefits," 2009 (percent of U.S. adults)
• Digestive Health and Immunity
• Performance-Enhancing Products - Not Just for Athletes
• Energy: Drinks and More
• Brain Health and Memory
• Products Targeting Women
• Products Targeting Children

Chapter 6: Competitor Profiles

• Groupe Danone
• Company Overview
• Company Tightening its Focus on Health, Core Brands
• Table 6-1: Selected U.S. Adult Demographics for Use of Dannon Yogurt, 2008 (index)
• Functional Products: Activia and Beyond
• Table 6-2: Selected U.S. Adult Demographics for Use of Stonyfield Farm Yogurt, 2008 (index)
• Table 6-3: U.S. Mass-Market Sales of Select Dannon Products, 2007-2008 (in millions of dollars)
• Company Banks on Information, Innovation
• International Expansion Also Health-Focused
• Kellogg Co.
• Company Overview
• An Emphasis on Innovation
• International Presence
• Kashi: Extending the Brand
• Table 6-4: Mass-Market Sales of Selected Kellogg Functional RTE Cereals, 2007-2008 (in millions of dollars)
• Table 6-5: Selected U.S. Adult Demographics for Use of Kashi GoLean Cold Cereal, 2008 (index)
• Table 6-6: Selected U.S. Adult Demographics for Use of Kashi Bars, 2008 (index)
• Functional Snacks and Beverages
• Kraft Foods, Inc
• Company Overview
• Health and Wellness Are Core Strategies
• Table 6-7: Selected U.S. Adult Demographics for Use of Kraft South Beach Frozen Pizza, 2008 (index)
• Table 6-8: Selected U.S. Adult Demographics for Use of Balance Bar, 2008 (index)
• Breaking New Ground in Healthy Foods
• Nestle SA
• Company Overview
• Health/Wellness - And Indulgence
• Nutrition in Developing Nations
• Bars, Dinners and Beverages
• Table 6-9: Selected U.S. Adult Demographics for Use of Original PowerBar, 2008 (index)
• Table 6-10: Selected U.S. Adult Demographics for Use of Boost, 2008 (index)
• PepsiCo, Inc.
• Company Overview
• Not Just a Soda Company
• SoBe
• Table 6-11: Selected U.S. Adult Demographics for Use of SoBe Functional Drinks, 2008 (index)
• Naked Juice
• Table 6-12: Mass-Market Sales of Naked Juice Functional Beverages, 2007-2008 (in millions of dollars)
• Tropicana Stumbles Due to Packaging Debacle
• Propel Fitness Water
• Quaker Oats Touting Functional Value Foods
• Table 6-13: Selected U.S. Adult Demographics for Use of Quaker Oats Oatmeal, 2008 (index)
• Nature' s Path Organic
• Company Overview
• Function and Taste
• Superfoods: Focus on Hemp
• Gluten-Free: A Serendipitous Development
• Environmental Responsibility and Cause Marketing
• Eat Well, Do Good
• Table 6-14: Mass-Market Sales of Selected Nature' s Path Categories/Brands, 2007-2008 (in millions of dollars)

Chapter 7: The Consumer

High Levels of Receptivity to Functional Foods

• Figure 7-1: Distribution of Consumers by Level of Agreement with Statement, "Rather Than Vitamin/ Supplement Pills, I Prefer to Buy Foods or Beverages with Specific Nutritional Benefits," February 2009 (percent)
• Figure 7-2: Distribution of Consumers by Level of Agreement with Statement, "I Am Buying More Foods/Beverages Because of Their Specific Nutritional Benefits," February 2009 (percent)
• Demographics to Functional Food Receptivity
• Table 7-1: Level of Agreement with Statement, "Rather Than Vitamin/Supplement Pills, I Prefer to Buy Foods or Beverages with Specific Nutritional Benefits": By Gender, 2009 (percent)
• Table 7-2: Level of Agreement with Statement, "I Am Buying More Foods/Beverages Because of Their Specific Nutritional Benefits": By Gender, 2009 (percent)
• Table 7-3: Level of Agreement with Statement, "Rather Than Vitamin/Supplement Pills, I Prefer to Buy Foods or Beverages with Specific Nutritional Benefits": By Age Bracket, 2009 (percent)
• Table 7-4: Level of Agreement with Statement, "I Am Buying More Foods/Beverages Because of Their Specific Nutritional Benefits": By Age Bracket, 2009 (percent)
• Table 7-5: Level of Agreement with Statement, "Rather Than Vitamin/Supplement Pills, I Prefer to Buy Foods or Beverages with Specific Nutritional Benefits": By Household Composition, 2009 (percent)
• Table 7-6: Level of Agreement with Statement, "I Am Buying More Foods/Beverages Because of Their Specific Nutritional Benefits": By Household Composition, 2009 (percent)
• Table 7-7: Level of Agreement with Statement, "Rather Than Vitamin/Supplement Pills, I Prefer to Buy Foods or Beverages with Specific Nutritional Benefits": By Highest Level of Educational Attainment, 2009 (percent)
• Table 7-8: Level of Agreement with Statement, "I Am Buying More Foods/Beverages Because of Their Specific Nutritional Benefits": By Highest Level of Educational Attainment, 2009 (percent)
• Table 7-9: Level of Agreement with Statement, "Rather Than Vitamin/Supplement Pills, I Prefer to Buy Foods or Beverages with Specific Nutritional Benefits": By Household Income Bracket, 2009 (percent)
• Table 7-10: Level of Agreement with Statement, "I Am Buying More Foods/Beverages Because of Their Specific Nutritional Benefits": By Household Income Bracket, 2009 (percent)
• Table 7-11: Level of Agreement with Statement, "Rather Than Vitamin/Supplement Pills, I Prefer to Buy Foods or Beverages with Specific Nutritional Benefits": By Race/Ethnicity, 2009 (percent)
• Table 7-12: Level of Agreement with Statement, "I Am Buying More Foods/Beverages Because of Their Specific Nutritional Benefits": By Race/Ethnicity, 2009 (percent)
• Table 7-13: Level of Agreement with Statement, "Rather Than Vitamin/Supplement Pills, I Prefer to Buy Foods or Beverages with Specific Nutritional Benefits": By Locale of Residence, 2009 (percent)
• Table 7-14: Level of Agreement with Statement, "I Am Buying More Foods/Beverages Because of Their Specific Nutritional Benefits": By Locale of Residence, 2009 (percent)
• Table 7-15: Level of Agreement with Statement, "Rather Than Vitamin/Supplement Pills, I Prefer to Buy Foods or Beverages with Specific Nutritional Benefits": By Region of Residence, 2009 (percent)
• Table 7-16: Level of Agreement with Statement, "I Am Buying More Foods/Beverages Because of Their Specific Nutritional Benefits": By Region of Residence, 2009 (percent)
• Purchasing Rates by Product Characteristics
• Table 7-17: Percent of Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Their Nutritional Benefits in Relation to Specific Health Conditions or Concerns, 2009
• Table 7-18: Percent of Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Specific Nutritional Content, 2009
• Table 7-19: Percent of Consumers Who Have Purchased Beverage Products in the Last 12 Months Because of Their Special Nutritional Benefits, 2009

Women Are the Prime Consumers

• Table 7-20: Percent of Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Their Nutritional Benefits in Relation to Specific Health Conditions or Concerns: By Gender, 2009
• Table 7-21: Percent of Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Specific Nutritional Content: By Gender, 2009
• Table 7-22: Percent of Consumers Who Have Purchased Beverage Products in the Last 12 Months Because of Their Special Nutritional Benefits: By Gender, 2009

Varied Patterns by Age

• Table 7-23: Percent of Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Their Nutritional Benefits in Relation to Specific Health Conditions or Concerns: By Age Bracket, 2009
• Table 7-24: Percent of Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Specific Nutritional Content: By Age Bracket, 2009
• Table 7-25: Percent of Consumers Who Have Purchased Beverage Products in the Last 12 Months Because of Their Special Nutritional Benefits: By Age Bracket, 2009

Patterns by Household Composition

• Table 7-26: Percent of Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Their Nutritional Benefits in Relation to Specific Health Conditions or Concerns: By Household Composition, 2009
• Table 7-27: Percent of Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Specific Nutritional Content: By Household Composition, 2009
• Table 7-28: Percent of Consumers Who Have Purchased Beverage Products in the Last 12 Months Because of Their Special Nutritional Benefits: By Household Composition, 2009

Strong Correlation with Higher Education and Income

• Table 7-29: Percent of Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Their Nutritional Benefits in Relation to Specific Health Conditions or Concerns: By Highest Level of Educational Attainment, 2009
• Table 7-30: Percent of Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Specific Nutritional Content: By Highest Level of Educational Attainment, 2009
• Table 7-31: Percent of Consumers Who Have Purchased Beverage Products in the Last 12 Months Because of Their Special Nutritional Benefits: By Highest Level of Educational Attainment, 2009
• Table 7-32: Percent of Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Their Nutritional Benefits in Relation to Specific Health Conditions or Concerns: By Household Income Bracket, 2009
• Table 7-33: Percent of Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Specific Nutritional Content: By Household Income Bracket, 2009
• Table 7-34: Percent of Consumers Who Have Purchased Beverage Products in the Last 12 Months Because of Their Special Nutritional Benefits: By Household Income Bracket, 2009

African-Americans and Asian-Americans as Prime Consumers

• Table 7-35: Percent of Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Their Nutritional Benefits in Relation to Specific Health Conditions or Concerns: White Non-Hispanics, 2009
• Table 7-36: Percent of Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Specific Nutritional Content: By Race/Ethnicity, 2009
• Table 7-37: Percent of Consumers Who Have Purchased Beverage Products in the Last 12 Months Because of Their Special Nutritional Benefits: By Race/Ethnicity, 2009

Urban/Suburban and Coastal Skews

• Table 7-38: Percent of Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Their Nutritional Benefits in Relation to Specific Health Conditions or Concerns: By Locale of Residence, 2009
• Table 7-39: Percent of Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Specific Nutritional Content: By Locale of Residence, 2009
• Table 7-40: Percent of Consumers Who Have Purchased Beverage Products in the Last 12 Months Because of Their Special Nutritional Benefits: By Locale of Residence, 2009
• Table 7-41: Percent of Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Their Nutritional Benefits in Relation to Specific Health Conditions or Concerns: By Region of Residence, 2009
• Table 7-42: Percent of Consumers Who Have Purchased Food or Beverage Products in the Last 12 Months Because of Specific Nutritional Content: By Region of Residence, 2009
• Table 7-43: Percent of Consumers Who Have Purchased Beverage Products in the Last 12 Months Because of Their Special Nutritional Benefits: By Region of Residence, 2009