Joanna Cosgrove11.01.10
Simply put, the functional foods of today aren’t what they used to be. While the inventory of wildly formulated products stamped with outrageous (and largely unconvincing) health benefit claims circa 10 years ago has dwindled, it has been steadily replaced by foods and beverages that make better use of ingredients consumers already trust. The health benefits are also being pitched with a softer sell. The message has been finessed to appeal to consumers who welcome health benefits, but aren't willing to spend huge sums of money on the food and beverages they enjoy consuming.
The functional food segment is still transitioning in an effort to surmount ever-evolving marketplace demands. “The market has been hit by the recession, consumer skepticism, and stricter FDA guidelines,” commented Garima Goel Lal, a senior analyst at the market intelligence firm Mintel International Group Ltd. “Most functional food and beverages, and especially beverages, command higher than average price—a negative when consumers are looking to cut down on discretionary expenses. They are likely to look for cheaper alternatives—for example, a multivitamin tablet for vitamins/minerals intake. And supplements, which are much cheaper than food and beverages, are aimed at wider functional benefits—energy boost, omega 3, antioxidants, etc.”
In the realm of functional beverages, Ms. Lal said antioxidants tops of the list of desirable functional additives, and 51% of all functional drinks users look for antioxidants. “But many regular beverages, especially fruit juice/drinks, now make this claim and are cheaper than the antioxidant-rich (functional); therefore, with the lack of differentiation consumers are likely to gravitate toward the cheaper alternative,” she said.
While keeping an eye on cost, consumers are also shrewder label readers. “Consumers look for functional beverages/foods because they perceive these to provide added benefits, but if functional food/beverages are high in calories, consumers are not likely to pick it up—as the consumer trend toward low-calorie food to manage obesity and weight continues,” she said. “Additionally presence of artificial ingredients counters the consumer trend toward all-natural, organic and healthy.”
For example, Mintel data show that about 44% of all adults aged 18+ say that if functional drinks have too much sugar, they are not going to drink it; 48% agree that functional drinks sweetened with high-fructose corn syrup is unhealthy (Functional Beverages-U.S., May 2010).
Probably the biggest issue hampering the market is the fuzzy consumer perspective, according to Kirk Cornell, senior director, The Hartman Group. “The functional food category is not completely kaput but isn’t as exciting as it was to food managers five years ago,” he said. “In a lot of ways it’s never been particularly exciting to consumers in the sense that ‘functional foods’ is not a category to them. It’s not a naturally-occurring classification of products. To consumers, ‘functional foods’ is more of an industry-created idea.
“That being said,” he continued, “there’s certainly consumers that functional foods appeal to but from what we’re seeing right now, with what’s going on with whole food culture and the culture of health and wellness in the country, a lot of consumers are looking toward food and beverages more as enjoyment (not that they’re relaxing their health requirements). Instead of looking to specific nutrition requirements or highly targeted benefits, they’re eating a broad variety of things and expecting general health benefits, at the same time looking toward foods that are better, more fun, or higher quality to make it a more interesting food experience. It goes in lock step with what we’ve been seeing in American food culture for a while now.”
He went on to say that in most cases, consumers bristle at the notion of functional foods because they perceive them to be for people who have specific conditions and eat certain things at the advice of a doctor (i.e. Benecol). “Trying to project specific health conditions or target benefits toward a more general population seems medicinal,” he said. “When foods straddle the medicinal angle it can be a turnoff because it seems like consuming the food is something the consumer has to do like a chore rather the consuming the food for enjoyment purposes.”
Inside the Consumer Mind
Washington, DC-based International Food Information Council and Foundation (IFIC) has been monitoring consumer attitudes toward Functional Foods since 1998 and last summer published its 2009 IFIC Functional Foods/Food for Health Executive Research Report. Elizabeth Rahavi, RD, IFIC’s associate director, Health and Wellness, said the consumers polled for the report were more educated about functional foods and food benefits in comparison to the last iteration of the report published in 2007.
“When asked about their perceptions of functional foods, significantly more consumers (89%) agreed that certain foods have benefits that go beyond basic nutrition, and may reduce the risk of disease or other health concerns, than in 2007 (85%),” she said.
In terms of functional foods, one of the more exciting findings from the survey was that more than nine out of 10 Americans (92%) can name a food and its associated health benefit. “While this number has remained relatively stable over the past few iterations of the survey (92% in 2007 and 91% in 2005) it has increased significantly from when we first asked the question in 1998 (77%),” she noted. “This research suggests that the idea that food and beverages can provide health benefits has become well known among the American public.”
When asked to name a functional food without being prompted, those polled tended to mention foods or categories of food first such as fruits and vegetables; fish, fish oil and seafood; dairy (including milk and yogurt); meat and poultry; and herbs and spices. The one exception to the rule was fiber, Ms. Rahavi said.
She went on to add that IFIC believed that the positive tone of the report indication optimistic news for the functional foods industry. “People do believe that foods can provide a host of health and wellness benefits,” she said. “Topping our list was improving hearth health (85%), contributing to healthy growth and development in children (83%); improving physical energy or stamina (82%); improving bone health (82 percent); and maintaining overall health and wellness (82%).
“Further, more than 85% of Americans say that they are currently consuming or would be interested in consuming foods or beverages for specific health and wellness benefits.”
But despite the increased consumer awareness of functional foods benefits, implementing that knowledge into responsible consumption is where things started trailing off. “While we saw significant increases in awareness of certain diet and health relationships, reported consumption falls short,” Ms. Rahavi explained. “For example, the number of Americans who said that they are aware of probiotics and maintaining a healthy digestive system increased from 58% in 2007 to 72% in 2009, yet only 38% of those who are aware of the relationship are already consuming probiotics for this benefit. Another 47% would be interested in consuming probiotics for this benefit.”
Still, the Americans polled remain “highly interested” in learning more about functional foods—43% reported being “very interested” and another 41% were “somewhat interested.”
“I think the biggest challenge facing the industry is finding ways to discuss the state of the science related to specific functional components, while not overpromising on what an individual product can deliver,” commented Ms. Rahavi. “We also need to provide more actionable advice that helps consumers move past awareness of specific diet and health relationship and into action. The good news is that most Americans are primed and ready for actionable advice about how they can use food, beverages and dietary supplements to meet their health and wellness goals.”
Delivering the Goods
So with consumer awareness and inclinations and sorted out, one question remains: what can functional food formulators do to maintain the American consumer’s attention?
“If a food is to be functional it needs to be functional in a subtle way; it shouldn’t scream that it has the benefits of a functional food,” asserted The Hartman Group’s Mr. Cornell. “It first has to be a food or beverage that seems as interesting and tasty and high quality as a regular food or beverage but with function.
“There are already some indications that manufacturers are catching on to this,” he went on to say. “Some product function messages are migrating a little bit from the front panel to the back panel, or the functions are so obvious and naturally occurring that everyone understands them anyway. Whole grains are great—Fiber One has done a great job, probably because it tastes so good. But if you’re screaming ‘Fiber for Regularity!’ it’s probably not your best bet.”
Comparable to the success of Fiber One, said Mr. Cornell, is kombucha tea. “Kombucha tea isn’t exactly mainstream, but there are a lot of people aware of it today," he said. “A lot of people believe it to be multi-functional but it’s not specifically functional. To some people it’s a digestive, while to others it’s an energy beverage or a balancing drink. But for the most part, it’s sold simply as kombucha tea without making any claims. It got to where it is today by being exotic and by the notion of perhaps enticing consumers to experiment with foods and beverages.”
Logically speaking, though, the most successful functional foods are those associated with breakfast. For functional beverages, it’s sports drinks, in Mr. Cornell’s opinion. “Breakfast is inherently functional,” he said. “It’s about fueling the body with vitamins, minerals and fiber and already has a somewhat somber tonality. Functional foods are most appropriate to the breakfast occasion and also in the beverage segment, especially when you’re referring to sports drinks, which already have the highly functional angle tied into the consumption occasion.”
What’s more, Mintel’s Ms. Lal suggested that functional food and beverage makers can back their claims by proven research to gain consumer trust. “Also,” she added, “if functional food/beverage makers could show that a functional benefit will actually help in saving medical costs either through prevention or cure of a certain condition, and provide cost-benefit analysis to consumers, many consumers, especially aging Baby Boomers are likely to pay attention. Some 60% of all adults aged 18+ agree they are more likely to purchase a functional food or beverage if the claims are backed by proven research.”
Ms. Lal stated that consumers are more likely to turn to functional foods when they are in search of specific benefits that improve their quality of life. “Claims such as weight loss, energy boost and stress relief are likely to find favor among consumers,” she said. “Beverages that claim to provide relaxation have shown some growth, though overall sales for such beverages remain small.”