August 2011/Prepared Foods -- What do the dairy, bakery and cereal, and beverage market segments have in common? They are the top three global product categories for functional foods, based on the definition of functional foods as products making health claims, according to a June 2011 report from Leatherhead Food Research titled, “Future Directions of Global Functional Foods.” The report adds, however, that if a broader definition is used, and energy- and mood-enhancing products are included, then the beverage category dominates. (See the chart “Global Functional Foods Market.”)
Although the functional product sales have and will continue to rise at a faster rate than the global food and drinks industry as a whole, growth in parts of the global functional foods market appears to be slowing, due mainly to economic reasons. Many functional foods are priced at the upper end of the market. Other factors include a slight maturing of certain sectors, consumer fatigue and the fact that various authorities have started to impose limits upon the health claims made by such food and drinks, Leatherhead notes. “Nevertheless, levels of new product activity remain reasonably high, and health trends observed throughout the developed world (such as rising obesity rates) suggest that the market potential for many types of functional foods remains positive.”