Conveying health benefits to consumers remains an ongoing challenge for marketers of nutritional products. Kraft Foods’ Crystal Light makes no direct health claim, while Pepsico’s Quaker cereal utilizes an FDA-permitted claim for cholesterol.



2009 was a tough year, and for manufacturers of nutritional supplements and functional foods, it was more than the economy. Overseas, the European Food Safety Authority (EFSA), which covers 27 European Union member states, gave a negative opinion on a multitude of health claims associated with many high-profile and popular nutritional and medicinal-oriented ingredients. The first set of opinions appeared in the October 21Official Journal of the European Union, with others appearing shortly after. The industry voiced concern this conservative approach will cripple European innovation and ability to compete with other nations, in regards to advances in healthful foods and supplements.

In the U.S., tussles between various governmental groups, a critical media, and the food and supplement industry also arose. For example, The Kellogg Co. said it would remove a claim that its antioxidant and vitamin-containing Rice Krispies and Coco Krispies could help support a child’s immunity. In December 2009, the FDA issued a “Guidance for Industry: Factors that Distinguish Liquid Dietary Supplements from Beverages, Considerations Regarding Novel Ingredients, and Labeling for Beverages and Other Conventional Foods.” Its intention was likely meant to address the occasional “fuzzy logic” used by companies in deciding whether a product could be positioned as a dietary supplement or a food (i.e., beverage). (See http://tinyurl.com/y85fbcq.)

The industry, however, is not passively accepting all FDA’s efforts to reign in product claims. When the FDA took issue with the specific language of General Mills’ cardiovascular claim on Cheerios, suggesting it can prevent or treat heart disease, the company responded by noting the claim had been approved for 12 years, and FDA’s issue was with the label verbiage, rather than the science behind the claim.

In a sentence that itself needs a bit of studying, a January 22, 2010, Food Navigatornews item titled, “FDA has a month to respond to health claim contempt of court allegations,” relays: “The parties [Alliance for Natural Health USA (ANH-USA) and others] suing the FDA over its qualified health claims system have filed opposition to the FDA’s own opposition to their suit that accuses the regulator of health claim censorship and distortion of scientific data.”

While 2010 may shape up to be an interesting regulatory year for functional foods and supplements, industry estimates continue to predict growth rates higher than those of traditional foods and beverages. A Packaged Facts report published May 2009, “Functional, Fortified and Inherently Healthy Foods and Beverages in the U.S.,” noted the functional foods market was $30.7 billion in 2008 and projects it to grow to $43 billion in 2013. (Also, see the sidebar “Functional Foods Invigorating Industry.”) There are still opportunities in the functional foods arena.

Lost and Found Opportunities
Sales of products with certain health claims and ingredients ended on a high note during the 13-week period ending December 26, 2009, vs. the year before, according to The Nielsen Company. (See chart “Recovering Mainstream Sales.”) For example, sale of products noting they were “a good source of protein,” those noting the presence of an omega (fatty acid), those pointing out antioxidants on the label and those identifying the presence of fiber had increased dollar sales of 22.2, 25.3, 18.8 and 12.0%, respectively. All these increases were on top of already decent growth from the same period in 2007. On the downside for manufacturers/marketers of these products, most all had a greater increase in unit volume, as opposed to dollar sales indicating a downward price pressure. Other Nielsen data shows products touting some components, such as flax or hemp seed, iron and plant sterols, found it a challenge to maintain dollar sales.

Care should be taken, when interpreting what this means for any individual ingredient’s use. For example, this set of Nielsen data looks at manufacturer label claims rather than ingredient legends. Thus, flax seed is commonly used as a source of omega-3 fatty acids in many foods, such as baked goods and snacks, but manufacturers often or usually only tout the presence of the omega-3, not its flax seed source.

Driving sales of nutritional products involves a myriad of marketing and other business factors. These include consistent quality and efficient production, so manufacturing costs are held low enough that marketing and sales costs can be sustained; positive media in emerging nutritional information; a high-performing sales staff; and, of course, a product desired by consumers. This last crucial factor is met less often than many product developers would hope.

“So much innovation is driven by `supply push,’ rather than `demand-pull,’” says Bob Jones, principal, Scientia Advisors LLC. “Ingredient suppliers and consumer packaged goods (CPG) companies alike sing variations on the theme of, ‘We can make it, so who can we get to buy it?’ Suppliers give impassioned descriptions of their nutritional ingredient, without thought as to whether a finished goods manufacturer can pass along the cost to their consumers. And, CPG companies say things like, `We’ve got a really efficient process to make cookies or salad dressing, can we add omega-3s to declare that we have a heart-healthy product?’”

“Functional foods is still a relatively new industry. Companies should be investing for leadership and ownership of this arena, rather than looking for huge sales within the first few years,” advises Jones. “Rather than focusing on the product, the focus should be on finding the customer. These are still niche markets, and it’s important to find the (niche-market) customers. Once that thinking has been adjusted, it’s surprisingly easy to find them. They aggregate in associations or organizations, read specific magazines, attract the attention of specific health care professionals and so on,” adds Jones.

Nestle, the world’s largest food company, appears to be striving for leadership in certain segments of the health and wellness arena. Its new product activities also provide clues as to the immediate future of functional foods. “It’s good to look at the leaders for overall trends,” says Lu Ann Williams, head of research, Innova Market Insights. Small companies are very innovative and often initiate new ideas, but, for a trend to “stick,” major companies need to take it mainstream, she adds.

Innova Market Insights divides healthy-positioned products into whether they have “active” or “passive” food claims. Active generally are “food plus” products, where nutritionally beneficial ingredients have been added or promoted on the label. Passive claims are “food minus” products, where ingredient components have been removed or lowered (such as no-fat or reduced-sodium).

In the U.S. in 2009, 64% of total Nestle launches had a health positioning. Of these, 41% had active claims, up from 37% in 2008, says Williams. “These numbers demonstrate the commitment Nestle has for health, and I expect we’ll see further increases in 2010.” Some 50% of Kraft’s U.S. launches in 2009 had a health positioning, of which 17% were active. Unilever’s numbers show a similar trend, with 46% of total 2009 launches with a health positioning. Some 43% of Unilever’s products carried an active health claim. All three companies showed a growth in passive health claims; 98% of total “healthy” launches from Nestle and Kraft had a passive health claim promoted on the pack. Unilever followed with 87%, a small drop from 2008, but active claims from the company increased from 35% in 2008, Williams relays.

What Consumers Want
One ongoing challenge to suppliers of nutritional products is how well the healthfulness and/or specific health benefits of their products are conveyed to consumers. Over the years, a variety of studies have investigated consumer awareness of specific nutrients.

One article, “Health and Wellness Product Devel­opment,” which appeared in the February 2010 issue ofPrepared Foods, provided data from the International Foods Information Council’s (IFIC) 2009 consumer survey, “IFIC Functional Foods/Foods for Health Consumer Trending Survey.” It noted consumers “overwhelmingly mention foods before food components,” when talking about products that can improve health. However, some of the top “functional foods” named by consumers include herbs/spices, fiber, tea, nuts, whole grains, vitamins and minerals. Marketing and media attention increases consumer awareness of nutritional ingredients. One ingredient segment benefiting from this was the Superfruit category (pomegranates, in particular).

However, although consumers may generally first think of foods in regards to healthful components, 2008 data from the Natural Marketing Institute’s 2008 Health & Wellness Trends Database (HWTD)™ shows consumer preferences as to whether to use a “food/beverage” vs. a “supplement” to prevent/treat specific health-related issues depend on the health issue. So says Greg Stephens, vice president of strategic consulting, Natural Marketing Institute, speaking atPrepared Foods’ 2009 R&D Applications Seminar-Chicago. Stephens’ presentation was titled, “Using the Latest Consumer Trends for New Product Development Success” (go to http://bit.ly/9FRRQn to view the presentation on the Internet). For example, in the area of bone and joint health, the NMI data shows about 74 and 70% of consumers who indicate they are “currently treating or concerned about preventing” the condition prefer to use supplements, respectively; about 55 and 34% say they prefer foods. For immune health, the gap narrows, with 2008 data showing some 63% saying they prefer supplement use, and 60% saying foods. For consumers indicating they are currently treating or concerned about preventing issues related to gastrointestinal health, diabetes or weight management, not surprisingly, foods are preferred more often than supplements (since these conditions are highly food-related). For example, with “gastrointestinal health,” some 70% of consumers concerned about the condition say they would prefer to use foods, while some 46% say supplements.

The IFIC study also investigated the ability of consumers to associate foods with health conditions. It found 72% of consumers associated beneficial cultures found in yogurt and fortified products to be helpful for maintaining health, and 71% made the association with immunity. Some 58% associated calcium found in dairy foods or fortified beverages to be associated with bone health; 56% associated fiber found in foods with reduced risk of heart disease; and an equal percent also associated fiber with digestive health, while 54% associated it with reduced risk of cancer. Some 54% also associated antioxidants found in fruit and vegetables, grains, teas and other products with protection against aging and chronic diseases.

Those were the responses of 1,005 adults taken at random in IFIC’s web-based survey. Is there room for improvement? Most certainly, and food and nutritional companies can benefit from efforts to educate consumers. If marketing’s promotion of foods and components builds awareness and thus sales, as in the case of pomegranate, that begs an interesting question: How knowledgeable is the food industry in regards to the health benefits of high-profile nutritional ingredients? This was the focus of “Prepared Foods’ 2010 R&D Trends Survey: Functional Foods” that investigated the likelihood of those in R&D and marketing to associate an ingredient with a specific health benefit.

An Emerging, Taboo New Claim
In general, thePrepared Foods’ survey shows associations made by product developers between nutritional components and their benefits are similar to those of the general public. For example, of the 22 ingredient/ingredient categories listed, vitamin D and calcium were the only ones indicated to be of noticeable importance for bone health. (See chart “Linking Ingredients and Health Conditions.”) Not dissimilarly, probiotic cultures and dietary fiber-type ingredients (oligosaccharides, pectin, prebiotics and, specifically, “dietary fiber”) were all identified as beneficial to digestive health.

A relatively large number of ingredients were associated with the ability to reduce the risk of cancer and cardiovascular disease. In contrast, for the condition of blood glucose maintenance, of the limited list of ingredients given to those surveyed, only oligosaccharides were identified as beneficial by more than 10% of respondents (data not shown). Fruit, dietary fiber and pectin also received some votes.

Marketers do not always see opportunities, when a food or ingredient is recognized as beneficial for a health condition. For example, health organizations and mainstream media have been effective in educating consumers on the importance of consuming certain foods to reduce cancer risk, as shown by the IFIC data. The FDA (supposedly) allows a litany of qualified health claims on package labels for cancer risk reduction. They include selenium supplements and cancer; antioxidant (vitamins C and E) supplements and cancer; green tea and conventional foods and dietary supplements that contain green tea and cancer; calcium supplements and colon/rectal cancer; tomatoes and/or tomato sauce and prostate, ovarian, gastric and pancreatic cancers. (See http://tinyurl.com/ycplc3k.) Even more difficult-to-obtain FDA health claims (meeting significant scientific agreement or SSA) are allowed for associations between reduced cancer risk and fiber-containing grain products; fruits and vegetables and cancer; and lower fat levels and cancer. (See http://tinyurl.com/yftqatq.)

Using Mintel’s Global New Products Database and searching for foods (excluding pet foods), beverages, and vitamin and dietary supplements that have the word “cancer” associated with them in any way resulted in a list of over 560 products introduced onto the North American market since February 1999, with a significant increase in the last few years. For example, in the three-year period of 2004-2006, some 139 new product launches claimed an association with cancer. Some 334 new products made this association in the 2007-2009 period, although, as a percent of all new products, those with this claim fell slightly in 2009. Many to most were “ethical” claims merely referencing the company’s support of organizations such as the Breast Cancer Research Foundations. For example, Northland Products Superfruits 100% juice, launched onto the U.S. market in December 2009, describes itself as “a blend of six fruit juices from concentrate, including raspberry, pomegranate and goji, with other added ingredients…[and] is a good source of antioxidant vitamins A, C and E. The brand is a proud partner of the Breast Cancer Research Foundation and donates $50,000 annually,” according to Mintel’s database. A number of products, however, have begun to utilize FDA-permitted claims. Lewis Bakeries launched whole-meal bread under the Roman Meal Sungrain brand in December 2009. The front label clearly carries the statement: “Diets rich in whole grain foods and other plant foods and low in total fat, saturated fat, and cholesterol may help reduce the risk of heart diseases and certain cancers.”

Ingredients Trends
One question appearing in most annualPrepared Foods’ R&D Trends: Functional Foods surveys asks, “During the next two years, do you expect the following ingredients to become more, or less important in your functional foods formulation efforts?” An unchanged list of 27 ingredients/ingredient categories is then provided.

This year’s responses do not differ greatly from those in 2008. The very broad and generic category of “antioxidants” still holds top place, with 60% of the 2008 respondents and 55% of those in the 2010 survey saying it would be more important to their efforts. Dietary fiber, omega-3 fatty acids, organic ingredients and probiotics were ranked second to fifth place in the 2010 survey. Calcium and whole fruits tied for sixth and seventh place. Similarly, in 2008, omega-3s and organic ingredients were tied for second place as ingredients to become more important in formulations; they were followed by dietary fiber, calcium, probiotics and whole fruit. Despite their popularity in supplements and backed by good scientific support, components, such as carnitine, isoflavones and the carotenoids lutein and lycopene, land toward the end of the list—a reflection of their more niche, or rather less generic, position in the health industry.

As helpful as it is to spot trends, such as omega-3-containing foods or those positioned for digestive health, the probability of success for any individual product is less dependent on whether a “hot” ingredient is used as it is, or whether the product is focused on the customer.

Scientia Advisors’ Jones offers five pieces of advice to companies interested in developing foods for health.
1. Understand the consumer. For example, if the desire is to market a food that lowers blood pressure, it may be found that consumers who actually care about their blood pressure have already solved the problem, using medication.
2.  Do not mistake “need” for “want.” Some overweight consumers do not care about their weight and are not interested in a weight management product, while some trim consumers control their weight very carefully and would be more likely to buy a weight management product.
3. Offer the health solution in an appropriate product format. While some weight-loss ingredients may formulate well into ice cream, most consumers find it counter-intuitive that they should eat ice cream to lose weight.
4. Whenever possible, provide a benefit the consumer feels (or sees) right away.  A product that relieves arthritic pain would tend to be purchased more readily than one that lowers cholesterol.
5. Do not forget the regulatory agencies.  Just one product recall can spoil the whole day...NS

Functional Foods Invigorating Industry
In the March 15, 2010, issue ofE-dition, Prepared Foods’ electronic newsletter, Bob Jones, principal, Scientia Advisors, provides further insights into the functional foods market. Scientia Advisors predicts the total global market for functional foods will have a compound annual growth rate of 7%, through at least 2012, to reach almost $200 billion that year. He discusses factors driving this sustained growth and reports probiotics, bioactive lipids (omega-3s and phytosterols) and certain segments of the fiber market will be the fastest-growing segments. Jones also comments briefly on the science behind certain claims and suggests care be taken in this arena.

For more information, contact Bob Jones, Scientia Advisors, www.scientiaadv.com, BJones@scientiaadv.com, 617-299-3011. To subscribe toE-dition , go to PreparedFoods.com/enews. The completeE-ditionarticle can be seen at http://bit.ly/cb1GAH.

Going Global: Soy They Say
A 2009 USDA Foreign Agricultural Service GAIN report titled, “The Mexican Market for Soy Beverages,” notes Mexico’s healthy beverage market has grown at an average annual rate of 12-15%, with soy-based beverages showing 15-20% growth, since being introduced onto the market several years ago. However, despite increasing consumer awareness of their health benefits, the current economic situation has slowed their growth to “a best case scenario” prediction of 4-6% per year. In efforts to continue to gain market shares, products with innovative flavors and added vitamins, minerals, fiber and so on are being launched. Over 30 Mexican companies produce products for health-conscious consumers, including powdered soymilks, natural and flavored soymilks, and soy fruit juices. Over 95% of the isolates, blends and proteins used by these products are imported from the U.S. The soy beverage market can be divided into soy drinks and soy juices; powdered soy milk; and functional beverages (such as those for athletes and special dietary needs). Most finished products in this last, smallest category are imported.

The USDA report notes Unilever’s Ades brand has over 80% of the soymilk market and 16% of the soy juice market. In 2008, it launched its Tropical Fruits and Lime-Limon drink mixes (a coconut flavor launched in November 2009 is shown). Mintel’s GNPD reports on other products launched in the last year, such as Wal-Mart’s Equate Suplemento Alimenticio Sabor in three different flavors and containing whey and soy proteins, as well as fructo-oligosaccharides and “28 vitamins and minerals.”
PHOTOS COURTESY OF MINTEL INTERNATIONAL’S GNPD