Functional, Fortified and Inherently Healthy Foods and Beverages: The U.S. Phood Market

Table of Contents

Chapter 1: Executive Summary

• Scope and Methodology
  • Scope of Report
  • Two Classifications: Phoods and Bepherages
  • Report Methodology
• Overall Market Trends
  • Eating for Health
  • FDA Holds Hearing on Functional Foods Definition
  • Total Phood/Bepherage Sales Estimated at $24.8 Billion
  • Figure 1-1: Share of U.S. Phood Sales by Retail Outlet Type, 2006 (percent)
  • Sales to Near $39 Billion by 2011
• Phoods
  • Four Competitive Paths for U.S. Phood Marketers
  • Using Naturally Health-Beneficial Ingredients
  • Extending Existing Brands with Fortified Products
  • Acquiring Smaller Marketers
  • Launching New Brands
  • National Consumer Advertising Expenditures
  • “High Antioxidants” Coming on Strong
  • Product Usage Rates
  • Figure 1-2: Household Penetration Rates for Selected Phood Classifications, 2006 (U.S. households)
• Bepherages
  • Three Ways to Compete in U.S. Bepherages Market
  • Using Naturally Health-Beneficial Ingredients
  • Extending Existing Brands with Functional Beverages
  • Mergers & Acquisitions
  • National Consumer Advertising Expenditures
  • Vitamins, Antioxidants Score High in Bepherage Introductions
  • Tea Tops Bepherages with Functional Claims
  • Product Usage Rates
  • Figure 1-3: Household Penetration Rates for Selected Bepherage Classifications, 2006 (U.S. households)
• Looking Ahead
  • Trends & Opportunities

Chapter 2: Overall Market Trends

• Introduction
  • The Intersection of Foods and Pharmaceuticals
  • Two Classifications: Phoods and Bepherages
  • Exclusions
  • Nutraceuticals and Functional Foods
  • FDA Holds Hearing on Functional Foods Definition in December 2006
  • Health Claims
  • Types of Health Claims
  • Health Claims That Meet Significant Scientific Agreement (SSA)
  • Qualified Health Claims
  • Structure/Function Claims
  • Nutrient Content Claims
  • Medical Organization Logos
  • Key Nutrients and Ingredients
  • Vitamins
  • Minerals
  • Dietary Fiber
  • Probiotics and Prebiotics
  • Soy Protein and Soy Isoflavones
  • Omega-3 Fatty Acids
  • Herbal and Botanical Ingredients
  • Table 2-1: U.S. Phood Market: Key Nutrients and Ingredients, 2007
• Market Drivers
  • Consumer Health Concerns
  • Obesity: A National Health Crisis
  • Food Industry Under Fire
  • From Low-Carb Dieting to Balanced Eating
  • America on a Diet
  • The New Food Guide Pyramid
  • Eating for Health
  • The Role of Research & Development
  • Target Marketing: Boomers and Beyond
  • The Role of Convenience
  • The Health and Natural Foods Conundrum
• Retail Sales and Market Share Trends
  • Methodology for Estimates
  • Total Phood/Bepherage Sales Estimated at $24.8 Billion
  • Figure 2-1: Share of U.S. Phood Sales by Retail Outlet Type, 2006 (percent)
  • Figure 2-2: Estimated Mass-Market Sales of Phoods and Bepherages, 2002-2006 (in million of dollars)
  • Table 2-2a: U.S. Phood Market: IRI-Tracked Sales by Product Category, 2005 vs. 2006 (in millions of dollars)
  • Table 2-2b: U.S. Phood Market: Share of IRI-Tracked Sales by Product Category, 2005 vs. 2006 (in millions of dollars)
  • Phood Classification Bigger, But Bepherages Growth Faster
  • Figure 2-3: IRI-Tracked Sales of Phoods and Bepherages by Classification, 2005 vs. 2006 (in millions)
  • Superior Growth for Most Phood Categories
  • Slow and Steady in Cereal, Speedy Growth in Bars
  • Bread, Nutritional Liquid/Powder Segments Stagnant
  • Olive Oil, Dried Fruit, and Nuts Make Gains
  • Dairy Sees Explosive Growth
  • Juices, Waters, Teas Join Forces
  • Table 2-3: U.S. Phood Market: IRI-Tracked Sales and Share of RTE (Cold) Cereal, 2005 vs. 2006 (in millions of dollars)
  • Table 2-4: U.S. Phood Market: IRI-Tracked Sales and Share of Food Bars, 2005 vs. 2006 (in millions of dollars)
  • Table 2-5: U.S. Phood Market: IRI-Tracked Sales and Share of Hot Cereal/Oatmeal, 2005 vs. 2006 (in millions of dollars)
  • Table 2-6: U.S. Phood Market: IRI-Tracked Sales and Share of Fresh Bread, 2005 vs. 2006 (in millions of dollars)
  • Table 2-7: U.S. Phood Market: IRI-Tracked Sales and Share of Olive Oil, 2005 vs. 2006 (in millions of dollars)
  • Table 2-8: U.S. Phood Market: IRI-Tracked Sales and Share of Dried Fruit, 2005 vs. 2006 (in millions of dollars)
  • Table 2-9: U.S. Phood Market: IRI-Tracked Sales and Share of Refrigerated Yogurt and Yogurt Drinks, 2005 vs. 2006 (in millions of dollars)
  • Table 2-10: U.S. Phood Market: IRI-Tracked Sales and Share of Refrigerated Juice, 2005 vs. 2006 (in millions of dollars)
  • Table 2-11: U.S. Phood Market: IRI-Tracked Sales and Share of Cooking/Baking Nuts, 2005 vs. 2006 (in millions of dollars)
  • Table 2-12: U.S. Phood Market: IRI-Tracked Sales and Share of Refrigerated Soymilk, Kefir, and Milk Substitutes, 2005 vs. 2006 (in millions of dollars)
  • Table 2-13: U.S. Phood Market: IRI-Tracked Sales and Share of Bottled Water, 2005 vs. 2006 (in millions of dollars)
  • Table 2-14: U.S. Phood Market: IRI-Tracked Sales and Share of Shelf-Stable Bottled Juice Drink, Blend, or Smoothie, 2005 vs. 2006 (in millions of dollars)
  • Table 2-15: U.S. Phood Market: IRI-Tracked Sales and Share of Nutritional Liquid/Powder, 2005 vs. 2006 (in millions of dollars)
  • Table 2-16: U.S. Phood Market: IRI-Tracked Sales and Share of Fresh Milk, 2005 vs. 2006 (in millions of dollars)
  • Table 2-17: U.S. Phood Market: IRI-Tracked Sales and Share of Fresh Eggs, 2005 vs. 2006 (in millions of dollars)
  • Table 2-18: U.S. Phood Market: IRI-Tracked Sales and Share of Margarines/Spreads/Butter Blends, 2005 vs. 2006 (in millions of dollars)
  • Table 2-19: U.S. Phood Market: IRI-Tracked Sales and Share of Loose/Bagged Tea, 2005 vs. 2006 (in millions of dollars)
  • Table 2-20: U.S. Phood Market: IRI-Tracked Sales and Share of Refrigerated Tea, 2005 vs. 2006 (in millions of dollars)
• Market Projection
  • Sales to Near $39 Billion by 2011
  • Figure 2-4: Projected Total U.S. Retail Sales of Phoods and Bepherages: 2006-2011 (in billions of dollars)

Chapter 3: Phoods

• Marketer Overview
  • The Competitors
  • Different Marketing Thrusts for Food vs. Pharmaceutical Companies
  • Phood Patents
  • Table 3-1: Selected U.S. Phood Marketers and Products, 2004
• Competitive Trends
  • Four Competitive Paths for U.S. Phood Marketers
  • Using Naturally Health-Beneficial Ingredients
  • Extending Existing Brands with Fortified Products
  • Acquiring Smaller Marketers
  • Launching New Brands
  • Market Segmentation and Demographics
  • Whole Grain-the Heart of the Matter
  • Health Nuts and Other Inherently Healthy Phoods
  • Fast-Growing Food Bars
• Advertising Trends
  • National Consumer Advertising Expenditures
  • Advertising Positioning
  • Kids in the Spotlight
• New Product Trends
  • “High Antioxidants” Coming on Strong
  • Table 3-2: Number of New Phood Products by Functional Package Tag/Claim, 2004-2006
  • Snack Bars Classification Out Front in Functional Claims
  • Table 3-3: Number of New Phood Products by Functional Package Tag/Claim and Product Classification, 2006
  • Omega-3 Fatty Acids
  • Figure 3-1: “Omega Claims” by Product Classification, 2006
  • Another Source of Omega-3s: Flax Seed
  • Soy
  • Yogurt and Probiotics
  • Oils
  • Figure 3-2: Number of New Olive Oil Products by Functional Package Tag/Claim, 2006
  • Phytochemicals and Plant Extracts
  • Whole Grains
  • Figure 3-3: Number of New Phood Products Making High Fiber Claims by Product Classification, 2006
  • Organic Introductions
  • Children' s Products
  • Portability and Portion Control
• Brand Profiles
  • RTE Cereal (Kellogg' s Special K)
  • Hot Cereal/Oatmeal (Quaker Take Heart)
  • Yogurt/Yogurt Drinks (Dannon DanActive and Activia)
  • Chocolates (Mars CocoaVia)
  • Nutritional/Intrinsic Health Value Bars (Kraft South Beach Diet Bars)
• Consumer Trends
  • Note on Simmons Survey Data and Tables
  • Product Usage Rates
  • Figure 3-4: Household Penetration Rates for Selected Phood Classifications, 2006 (U.S. households)
  • Product Purchasing Patterns
  • Patterns by Age Bracket
  • The Gender Skew
  • Patterns by Race/Ethnicity
  • Geographic Distribution and Local Eating Habits Affect Regional Patterns
  • Patterns by Household Income
  • Patterns by Household Size
  • Demographic Characteristics Favoring Use of Selected Phood Categories and Brands
  • Table 3-4: Household Penetration Rates for Selected Phood Classifications, 2004-2006 (U.S. households)
  • Table 3-5a: Indices for Use of Selected Phood Classifications: By Adult Age Bracket, 2006 (U.S. households)
  • Table 3-5b: Indices for Use of Selected Phood Classifications: By Adult Age Bracket, 2006 (U.S. households)
  • Table 3-6: Indices for Use of Selected Phood Classifications: By Gender, 2006 (U.S. households)
  • Table 3-7: Indices for Use of Selected Phood Classifications: By Race/Ethnicity, 2006 (U.S. households)
  • Table 3-8a: Indices for Use of Selected Phood Classifications: By Region, 2006 (U.S. households)
  • Table 3-8b: Indices for Use of Selected Phood Classifications: By Region, 2006 (U.S. households)
  • Table 3-9a: Indices for Use of Selected Phood Classifications: By Household Income Bracket (in Thousands), 2006 (U.S. households)
  • Table 3-9b: Indices for Use of Selected Phood Classifications: By Household Income Bracket (in Thousands), 2006 (U.S. households)
  • Table 3-10: Indices for Use of Selected Phood Classifications: By Household Size, 2006 (U.S. households)
  • Table 3-11: Demographic Characteristics Favoring Use of Whole-Wheat, Multi-Grain, Oat, or Bran Bread, 2006 (U.S. households)
  • Table 3-12: Demographic Characteristics Favoring Use of Unsalted or Unroasted Nuts, 2006 (U.S. households)
  • Table 3-13: Demographic Characteristics Favoring Use of Wheat Crackers, 2006 (U.S. households)
  • Table 3-14: Demographic Characteristics Favoring Use of Cheerios (Regular, Honey Oat, Multi-Grain), 2006 (U.S. households)
  • Table 3-15: Demographic Characteristics Favoring Use of Old Fashioned Quaker Oats, 2006 (U.S. households)
  • Table 3-16: Demographic Characteristics Favoring Use of Smart Balance, Benecol, or Take Control Margarine, 2006 (U.S. households)
  • Table 3-17: Demographic Characteristics Favoring Use of Total Cereal-Any Variety, 2006 (U.S. households)
  • Table 3-18: Demographic Characteristics Favoring Use of Special K-Any Variety, 2006 (U.S. households)
  • Table 3-19: Demographic Characteristics Favoring Use of Yoplait Drinkable Yogurt, 2006 (U.S. households)
  • Table 3-20: Demographic Characteristics Favoring Use of Dannon Drinkable Yogurt, 2006 (U.S. households)
  • Table 3-21: Demographic Characteristics Favoring Use of Stonyfield Farm Yogurt, 2006 (U.S. households)
  • Table 3-22: Demographic Characteristics Favoring Use of Wheaties, 2006 (U.S. households)
  • Table 3-23: Demographic Characteristics Favoring Use of Ensure Liquid Nutritional Supplement , 2006 (U.S. households)
  • Table 3-24: Demographic Characteristics Favoring Use of Smart Start Cereal, 2006 (U.S. households)
  • Table 3-25: Demographic Characteristics Favoring Use of Boost Liquid Nutritional Supplement , 2006 (U.S. households)
  • Table 3-26: Demographic Characteristics Favoring Use of Luna Bars, 2006 (U.S. households)

Chapter 4: Bepherages

• Marketer Overview
  • The Competitors
  • Opportunities Abound in Growing Bepherage Market
  • Table 4-1: Selected U.S. Bepherage Marketers and Products, 2007
• Competitive Trends
  • Three Ways to Compete in U.S. Bepherages Market
  • Using Naturally Health-Beneficial Ingredients
  • Extending Existing Brands with Functional Beverages
  • Mergers & Acquisitions
  • Soft Drink Marketers Recoup Losses
  • Overcoming Juice' s Negative Image
  • Divide and Conquer
• Advertising Trends
  • National Consumer Advertising Expenditures
  • Advertising Positioning
• New Product Trends
  • Vitamins, Antioxidants Score High in Bepherage Introductions
  • Tea Tops Bepherages with Functional Claims
  • Table 4-2: Number of New Bepherage Products by Functional Package Tag/Claim, 2004-2006
  • Table 4-3: Number of New Bepherage Products by Functional Package Tag/Claim and Product Classification, 2006
  • Water
  • Fruit Juices and Fruit Drinks
  • Energy & Calorie-Burning Drinks
  • Milk and Milk Substitutes
  • Smoothies
  • Probiotics and Prebiotics
  • Functional Tea, Coffee, and Now-Beer
  • Condition-Specific Bepherages
• Product Profiles
  • Juice Blends and Smoothies: Naked Juice
  • Energy Drinks: Fuze Beverage
  • Bottled Water: Glaceau vitaminwater
  • Tea: Coca-Cola/Nestlé' s Enviga
  • Fruit Juice: Ocean Spray Cranberry
• Consumer Trends
• Demographics
  • Note on Simmons Survey Data and Tables
  • Product Usage Rates
  • Figure 4-1: Household Penetration Rates for Selected Bepherage Classifications, 2006 (U.S. households)
  • Purchasing Patterns
  • Patterns by Age Bracket
  • The Gender Skew
  • Patterns by Race/Ethnicity
  • Geographic Distribution and Local Eating Habits Affect Choices
  • Patterns by Household Income
  • Patterns by Household Size
  • Key Demographics for Selected Categories and Brands
  • Table 4-4: Household Penetration Rates for Selected Bepherage Classifications, 2004-2006 (U.S. households)
  • Table 4-5a: Indices for Use of Selected Bepherage Classifications: By Adult Age Bracket, 2006 (U.S. households)
  • Table 4-5b: Indices for Use of Selected Bepherage Classifications: By Adult Age Bracket, 2006 (U.S. households)
  • Table 4-6: Indices for Use of Selected Bepherage Classifications: By Gender, 2006 (U.S. households)
  • Table 4-7: Indices for Use of Selected Bepherage Classifications: By Race/Ethnicity, 2006 (U.S. households)
  • Table 4-8a: Indices for Use of Selected Bepherage Classifications: By Region, 2006 (U.S. households)
  • Table 4-8b: Indices for Use of Selected Bepherage Classifications: By Region, 2006 (U.S. households)
  • Table 4-9a: Indices for Use of Selected Bepherage Classifications: By Household Income Bracket (in Thousands), 2006 (U.S. households)
  • Table 4-9b: Indices for Use of Selected Bepherage Classifications: By Household Income Bracket (in Thousands), 2006 (U.S. households)
  • Table 4-10: Indices for Use of Selected Bepherage Classifications: By Household Size, 2006 (U.S. households)
  • Table 4-11: Demographic Characteristics Favoring Use of Cranberry Juice/Blend, 2006 (U.S. households)
  • Table 4-12: Demographic Characteristics Favoring Use of Ready-to-Drink Orange Juice with Calcium, 2006 (U.S. households)
  • Table 4-13: Demographic Characteristics Favoring Use of Frozen Orange Juice with Calcium, 2006 (U.S. households)
  • Table 4-14: Demographic Characteristics Favoring Use of Soymilk, 2006 (U.S. households)
  • Table 4-15: Demographic Characteristics Favoring Use of Ocean Spray Cranberry Juice/Blend, 2006 (U.S. households)
  • Table 4-16: Demographic Characteristics Favoring Use of Northland Cranberry Juice/Blend, 2006 (U.S. households)
  • Table 4-17: Demographic Characteristics Favoring Use of Celestial Seasonings Herbal Tea, 2006 (U.S. households)
  • Table 4-18: Demographic Characteristics Favoring Use of Tropicana Ready-to-Drink Orange Juice with Calcium, 2006 (U.S. households)
  • Table 4-19: Demographic Characteristics Favoring Use of Minute Maid Ready-to-Drink Orange Juice with Calcium, 2006 (U.S. households)
  • Table 4-20: Demographic Characteristics Favoring Use of Minute Maid Frozen Orange Juice with Calcium, 2006 (U.S. households)
  • Table 4-21: Demographic Characteristics Favoring Use of Red Bull Energy Drink, 2006 (U.S. households)
  • Table 4-22: Demographic Characteristics Favoring Use of SoBe Adrenaline Rush Energy Drink, 2006 (U.S. households)
  • Table 4-23: Demographic Characteristics Favoring Use of Arizona Extreme Energy Shot, 2006 (U.S. households)

Chapter 5: Looking Ahead

• Trends and Opportunities
  • Product Trends: What' s Next
  • Probiotics Growth Continues
  • Whole Grains in a Variety of Formats
  • Omega-3 Fatty Acids as Ingredient of Choice
  • Spicing It Up
  • Bepherages Coming on Strong
  • Bottled Water Makes a Splash
  • Energy Drinks Broaden in Appeal
  • Drink Blends Blur Boundaries
  • Research and Development Crucial to Phoods Success
  • Regulating the Industry
  • Target Marketing: Who' s Next
  • Gender and Age Demographics
  • Condition-Specific Products
• Looking Abroad
  • Europe
  • Functional Food Preferences
  • Pros and Cons of Nanotechnology
  • European Probiotic Supplier Makes Headway in U.S.
  • Asia
  • Soy-Ready
  • Focus on the Elderly
  • Functional Cosmetics
  • Omega-3 Demand Grows Despite Price Barriers

Appendix: Addresses of Selected Marketers