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Functional Foods
Functional foods are those foods which contain increased levels of nutrients and other beneficial ingredients for specific health effects beyond those to be gained from the nutrients normally contained. They include products such as breakfast cereals and fruit juices which contain enhanced levels of vitamins, minerals and or fibre, cholesterol-lowering margarines and probiotic yoghurts/fermented-milk drinks. Although there may be a lack of consensus regarding the exact size of the functional food and drink market, there is no doubt that the main constituents are well understood and that they are growing at a faster pace than their mainstream counterparts.
The market is driven by continuing consumer interest in a healthier lifestyle, in conjunction with a general ageing of the population and the increasing need for better body maintenance. Two of the principal areas targeted by functional foods Ñ heart health through cholesterol-lowering products, and bone maintenance through products containing extra calcium and minerals Ñ address problems of old age. The other two major areas targeted are a balanced digestive system, achieved by eating products containing beneficial bacteria or extra fibre, and a healthy immune system, achieved by the intake of vitamins, minerals or the right bacteria.
Although a number of functional foods have been withdrawn from the market recently, many products Ñ such as Yakult and Actimel yoghurt drinks, Benecol and Flora pro.activ margarines, Tropicana Pure Premium Calcium and Multivitamin and Juice Up fruit juices, and Onken, Bio Activia and MŸller Vitality yoghurts Ñ have become major functional food products. Probiotic yoghurts/fermented-milk drinks now represent 15% to 20% of total yoghurt sales by value, and cholesterol-lowering margarines account for 10% of total sales of margarines and spreads. Functional products are estimated to account for some 20% of total breakfast cereal sales.
The main product categories within the functional food market are breakfast cereals, margarines and spreads, yoghurts/fermented-milk drinks and fruit juices. However, there is an increasing variety of other products on the market or available in other European countries. These include cereal bars, breads, milks, biscuits, cheese spreads, eggs, bottled waters and confectionery. Producers tend to be the major food and drink manufacturers such as Nestl?, Unilever, General Mills, Kellogg, Quaker Oats, Danone and Pepsico, although the sector has attracted other entrants such as Johnson & Johnson's McNeil Consumer Nutritionals and pharmaceutical companies such as Novartis. The combination of the research and development expertise of the pharmaceutical companies, with the marketing and distribution experience of food manufacturers, has given rise to successful alliances such as Altus Foods, the joint venture between Quaker Oats and Novartis. Other alliances exist involving functional ingredient suppliers such as Raisio and Forbes MediTech.
Advertising expenditure on functional foods has increased substantially each year since 1998, with half of the total now spent on yoghurts/fermented-milk drinks and over a third on margarines Ñ increasingly using television as the main medium. Additionally and importantly, the functional foods element now accounts for a significant percentage of total advertising expenditure within relevant food sectors, reflecting the importance of these products to manufacturers relative to longer-established brands.
Total sales of functional foods increased by a record 29.4% by value in 2000/2001 due to several major launches and relaunches. Sales of functional foods are forecast to increase at a significant rate Ñ although this will slow down in the medium term Ñ with growth rates continuing to outpace those achieved by their `non-functional' counterparts.
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