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Growth in Functional Foods Continues

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Growth in Functional Foods Continues

Growth in Functional Foods Continues
June 13
12:19 2011

The global functional food market is continuing to exhibit healthy growth. Leatherhead Food Research’s latest report – Future Directions for the Global Functional Foods Market – values the functional foods market (defined as ‘food and drink products making a specific health claim’) at $24.2b in 2010. Since 2003, Leatherhead estimates that the market has grown substantially, increasing by almost 1.5 times. Moreover, the functional foods market has been growing significantly faster than the headline rate of growth of the global food and drink market of around 4% per year.

A number of factors have facilitated the growth of functional foods. Changes in consumers’ diet, lifestyles, awareness and interest in their own health and well-being are important factors creating a demand-pull for products with the potential to deliver beneficial health outcomes. Supply-push factors are evident too. Expanding scientific knowledge and technological capability, particularly ingredient exploration and development, has led to increased product innovation. Consequently, the number of new product introductions making functional claims has been growing by approximately 28% per year and the diversity of claims and suggested health benefits have been diversifying.

Growth Factors

The ability for the functional foods market to continue to grow is dependant on several factors:

* First, consumers want proof, substantiated by independent scientific research, that functional products deliver the benefits they promise.

* Second, whilst it appears as if the major economies have recovered from recession, for the next year at least household budgets are still under pressure (and in many cases are deteriorating) as unemployment continues to rise and governments implement tough fiscal measures to rebalance their economies. The positive news is that throughout the recession the functional foods market has continued to grow, indicating robust demand, but this should not be taken for granted.

* Third, EFSA decisions as to the efficacy of functional claims will have a significant impact on the development of the market. By legitimising functional claims consumers are more likely to trust and therefore buy functional products. However, the high rejection rate of claims by EFSA illustrates the difficulty companies face in getting new products to market with substantiated claims and this may slow down innovation.

* Fourth, health, nutrition and wellness are key features of many of the world’s biggest food and drink company’s strategies, and they are looking to the functional foods market for growth opportunities. Whilst we do not overlook the many SME’s that make up the functional foods market, the potential for significant expansion is more likely to come from multinational food giants and the rate at which they can bring new products to market.

A SenseReach survey of over 1,500 UK consumers revealed that functional food consumption is fairly widespread; over a quarter claiming to consume functional products daily and a fifth claiming to consume them fortnightly. However, just under a third of consumers surveyed claim they do not (and never will) consume functional food products because they do not believe they work. In fact, when all survey respondents were asked what would encourage them to eat more functional food products the majority stated they would like to see definitive proof, substantiated by independent science, that the product ‘does what it says on the tin’.

The SenseReach survey supports the widely held view that efficacy of health benefits claims is key to driving market growth and that consumption growth is more likely to come from increasing the frequency and volume of consumption of existing users rather than ‘converting’ those who do not buy into functional food products.

Future Directions for the Global Functional Foods Market updates Leatherhead’s ongoing research of the functional food market. This new report reviews sales of functional foods in the world’s key markets in areas such as anti-ageing and heart, gut and bone health, as well as discussing consumer attitudes. The report also discusses recent regulatory developments, industry structure and trends in new product activity. For further information visit www.leatherheadfood.com/functional-foods.

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