Innovation in Functional Food and Drinks: Growth opportunities from new nutraceutical ingredients

Table of Contents

Innovation in Functional Food and Drinks

Executive Summary

• Consumer drivers
• Market dynamics
• Key ingredients
• Innovation and NPD in functional brands
• Regulatory trends
• Actionable recommendations

Chapter 1

Consumer drivers

• Summary
• Introduction
• Health overview of consumers
• Heart health and cardiovascular disease
• Gut health
• Bone and joint health
  • Osteoporosis
  • Arthritis
• Cancer
• Mental health
  • Alzheimers disease
  • Stress
• Vision health
• Energy
• The over-the-counter drug market
• Preferences and behaviors of consumers
• Concern for health
• Consumer belief in functional health product efficacy for specific health concerns
• Influence of health benefits on functional purchases
• Consumer health concerns driving purchases of functional health products
• Combining long-term health maintenance with short-term benefits
• Consumers perceptions of nutrition labeling
• Main drivers and trends
• The trend towards health and well-being
• An aging population concerned with long-term health and beauty

Chapter 2

Market dynamics

• Summary
• Introduction
• Market size
• Trends in functional food and drink formulation
• Joint ventures for branding purposes
• Technological advancements have led to improved taste formulations
  • Improving bioavailability
  • Improving formulation
  • Improving taste and texture
• A shift in marketing focus is creating wider appeal
  • Shifting emphasis to address cultural preferences
  • Shifting emphasis on health benefits to grow market share
• Stricter regulations
• Key manufacturers
• Manufacturer opinion of the functional food and drinks market
• Top categories for functional products
• Features of functional products
• Manufacturer perceptions of healthy consumers
• Growth of on-the-go products and functional staple foods
• Manufacturer perceptions of consumer interest vs. consumer purchasing behavior
• Manufacturer perception of consumer health activity

Chapter 3

Key functional ingredients

• Summary
• Introduction
• Ingredients companies
• Suppliers
• Full-service providers
• Key ingredients in functional food and drinks
• Growth of the key ingredients
• Antioxidants
• Coenzyme Q10
• Lutein
• Lycopene
• Black cohosh
• Calcium
  • Calcium and weight loss
  • Calcium and heart health
• Cocoa flavanols
• Fucoidan
• Gingko, ginseng and echinacea
• Glucosamine
• Magnesium
• Omega-3/6 and Polyunsaturated Fatty Acids
• Pine bark
• Probiotics and prebiotics
• Soy isoflavones
  • Lecithin
• Whey
• Market opportunity of key ingredients

Chapter 4

Innovation and NPD in functional brands

• Summary
• Introduction
• Innovation in functional ingredients
• Innovation in functional food and drinks
• Innovation in formulation
  • Soft drinks with higher level functional benefits
  • Innovation in formulation for probiotic drinks
• Innovation in packaging
• Growth of the functional categories
• Dairy
• Bakery and cereals
• Snacks
• Ready meals
• Soft drinks
• Hot drinks
• Functional alcoholic drinks
• Delivery systems
• Foods and drinks
• Other delivery methods
  • Gums and sweets
  • Oral strips
  • Tinctures and drops
  • Oral sprays and mists
  • Nutrient patches

Chapter 5

Opportunities and threats in regulation

• Summary
• Introduction
• Regulatory trends in the US
• The Consumer Information for Better Nutrition Initiative
  • Opportunities
  • Threats
• The Bioterrorism Act of 2002
  • Issues with the regulation
• Good Manufacturing Practices
  • Threats of the GMP regulation
• The Dietary Supplements Safety Act (Bill S.722)
• Japan
• Opportunities
• Costs of FOSHU approval
• Europe
• Threats
• Opportunities
• Other regulations
• Canada
• South America
• Australia
• Conclusions

Chapter 6

Actionable recommendations

• Summary
• Introduction
• Marketing the functionality
• Broadening the target audience for functional ingredients
• Men
• Families
• Younger consumers
• Targeting both younger and elderly consumers
• Find the right functional supplier
• Convenient functional foods
• Five key elements to creating a successful functional staple food
• An availability identical to regular products
• Finding the right partner/supplier
• A clear, non-threatening benefit
• Benefit specificity for the target group
• "Own" the benefit
• Appendix
• Definitions
• Index

List of Figures

• Figure 1.1: Influence of health benefits on functional purchases, Instant Gratifiers vs. all respondents, % respondents answering "strong" or  "quite strong"
• Figure 1.2: Active engagement in improving external well-being by segment, % respondents answering "very" or "quite" engaged
• Figure 1.3: Frequency purchase of functional health products, Instant Gratifiers vs. all respondents, % respondents answering "frequent" or "sometimes"
• Figure 1.4: Percentage of interviewees wanting nutritional information on the label in each country
• Figure 1.5: Consumers awareness of nutritional information
• Figure 1.6: Consumers trust in nutritional claims
• Figure 1.7: Would the claim rich in calcium lead you to buy the product?
• Figure 1.8: Top health concerns, % respondents
• Figure 2.9: 8th Continent Light Soymilk
• Figure 2.10: Importance of functional categories, 2005-2008, "very" or "quite" important, % respondents
• Figure 2.11: Health benefits driving the functional health industry, 2005-2008, % respondents answering "strongly"
• Figure 2.12: Manufacturer perceptions of consumer interest vs. consumer purchasing behavior, % respondents answering "strongly interested" and "frequently purchase"
• Figure 2.13: Manufacturer perception of consumer health activity, % respondents
• Figure 2.14: Consumer health activity, % respondents answering "very engaged" and "engaged"
• Figure 3.15: Suppliers and full-service providers
• Figure 3.16: Popularity and market opportunity of key ingredients in the US, Europe & Japan
• Figure 3.17: % growth in terms of product launches of the key ingredients, 2003-2005
• Figure 3.18: POM Wonderful 100% Pomegranate Juice
• Figure 3.19: Eclectic Organic Water
• Figure 3.20: CocoaVia Chocolate Chew
• Figure 3.21: Joint Juice Glucosamine Dietary Supplement
• Figure 3.22: Well & Active Probiotische Molke Drink
• Figure 3.23: Market opportunity of key ingredients, importance vs. application
• Figure 3.24: Market opportunity of key ingredients, current market value vs. potential market value
• Figure 4.25: Innovation in functional ingredients, 2003-2005
• Figure 4.26: Innovation vs. growth of product launches containing key ingredients
• Figure 4.27: Zeria Chondrobi Noshuku Eki Junko
• Figure 4.28: Defense Effervescent Supplement Drink
• Figure 4.29: % growth of functional categories in terms of new product launches, 2001-2005
• Figure 4.30: % of dairy product launches with functional benefits, 2001-2005
• Figure 4.31: Becel Pro-Activ Diat-Joghurtdrink - Original
• Figure 4.32: Bravo! Pro Slammers Milk
• Figure 4.33: % of bakery and cereals product launches with functional benefits, 2001-2005
• Figure 4.34: Sara Lee Whole Grain White Bread
• Figure 4.35: % of snacks product launches with functional benefits, 2001-2005
• Figure 4.36: Lowell Sweets SesaKiss Sesame Seed Snack Bar
• Figure 4.37: % of ready meals product launches with functional benefits, 2001-2005
• Figure 4.38: Findus Feeling Great! Spansk Laxpasta
• Figure 4.39: % of soft drinks product launches with functional benefits, 2001-2005
• Figure 4.40: Powerade Power Option
• Figure 4.41: Coca-Cola Soft Drink - Furusato Dayori Kishu-San Ume no Tansan
• Figure 4.42: % of hot drinks product launches with functional benefits, 2001-2005
• Figure 4.43: Rest Health Brown Green Tea Drink
• Figure 4.44: Suntory Cocktail - Macadia Sparkling
• Figure 4.45: Consumer interest in delivery methods for functional health products, % respondents answering "very" or "moderately" interested
• Figure 5.46: Manufacturer perception of regulatory effects on industry, % respondents answering "very strong" or "strong"
• Figure 5.47: The FOSHU logo
• Figure 6.48: General Mills heart healthy symbols
• Figure 6.49: Consumer appeal of functional food and drinks
• Figure 6.50: Oscar Mayer Lunchables Fun Fuel Lunch Combinations
• Figure 6.51: Examples of high and low level convenience
• Figure 6.52: Key elements to creating a successful functional food or drink

List of Tables

• Table 1.1: Estimated prevalence of major cardiovascular diseases and hypertension and hypercholesterolemia in the seven major markets, 2004
• Table 1.2: Prevalence and incidence of Crohns Disease by country, 2004
• Table 1.3: Prevalence and incidence of Ulcerative Colitis by country, 2004
• Table 1.4: Prevalence of osteoporosis in and women men over 50 in the seven major markets, 2003
• Table 1.5: Growth in Rheumatoid Arthritis statistics, seven major markets (000s), 2003-2010
• Table 1.6: Cancer patient statistics across the seven major pharmaceutical markets, 2004
• Table 1.7: Prevalence of Alzheimers Disease across the seven major markets, 2004-09
• Table 1.8: Stress of affluent consumers
• Table 1.9: Estimated prevalence of cataracts, 2003
• Table 1.10: Estimated prevalence of open-angle glaucoma, 2003
• Table 1.11: European self-medication pharmaceutical market, (€m) 2002-2004
• Table 1.12: Per capita spend of OTC drugs in Europe, (€), 2002-2004
• Table 1.13: Consumer behavior by age, % respondents
• Table 1.14: Consumer behavior by gender, % respondents
• Table 1.15: Consumer health concerns by segment, % respondents
• Table 1.16: Influence of health benefits on functional purchases, % respondents answering "strong" or "quite strong"
• Table 1.17: Consumer belief in functional health product efficacy for specific health concerns, by segment, % respondents
• Table 1.18: Consumer health concerns driving purchases of functional health products by segment, % respondents answering to a "very high" or "high" degree
• Table 1.19: Consumer purchase of functional health products by segment, % respondents answering "frequently" or "sometimes"
• Table 1.20: Long-term consumer health concerns by age group, % respondents
• Table 1.21: Short-term consumer health concerns by age group, % respondents
• Table 1.22: Population of over 60s by country, (m), 2004-2010
• Table 2.23: Functional food and drink sales by value ($m), 2004-2008
• Table 2.24: Key manufacturers and new functional food and drink development, 2004-2005
• Table 2.25: Key manufacturers and new functional food development, 2004-2005
• Table 2.26: Manufacturer perceptions of consumer nutrient awareness vs. actual consumer response, % respondents
• Table 2.27: Manufacturer perceptions of consumer purchasing nutrients vs. actual consumer response, % respondents
• Table 3.28: Health conditions and nutrients associated with beneficial usage
• Table 4.29: % of types of innovation within innovative functional products, 2003-2005
• Table 5.30: Approved language for qualified health claims
• Table 6.31: Key growth opportunities in ingredients by consumer group
• Table 6.32: Advantages and disadvantages of the methods food and drinks companies can use to acquire functional ingredients