IFT Annual Meeting and Food Expo exhibitors talk about this complex market.
Functional food is deemed the “tomorrow” of CPG nutrition, but how many of today’s shoppers are actually buying? Consumers are certainly curious enough. Nine in ten Americans are interested in learning more about functional foods, according to the International Food Information Council’s (IFIC) 2013 Functional Foods Consumer Survey. But are consumers willing to pay-usually more-for a food that provides added health benefits beyond simple nutrition? The answer to this question is complex, in part because the path to functional food success is complex. Exhibitors at the upcoming IFT Annual Meeting and Food Expo in New Orleans spoke to Nutritional Outlook about some of the biggest challenges facing an industry poised for greatness.
“It is difficult to determine if consumers will pay extra for a nutritional benefit [with functional foods],” says Tim Hammond, vice president of sales and marketing, Bergstrom Nutrition (Vancouver, WA). “With possible exceptions such as energy or fiber, many functional ingredients need to be taken on a daily basis to provide the benefit. Will consumers use functional foods in addition to supplements?”
Education is the market’s biggest stepping-stone. “Functional foods are perceived as positive, and better for you, but attitudes toward functional foods are dependent on consumers’ knowledge of the specific health benefits,” says Patrick Luchsinger, nutrition marketing manager, Ingredion Inc. (Westchester, IL).
Thanks to early marketing, most mainstream consumers understand the benefits of certain well-known vitamins, minerals, and nutrients-vitamin C and calcium, for instance, or fiber and whey protein-while others (omega-3 fatty acids, probiotics, and vitamin D) are gaining awareness through growing media coverage. But what about lesser-known but effective nutrients like curcumin, beta-glucan, enzymes, or prebiotics? How do mainstream consumers learn about these? Moreover, do consumers understand that a well-known ingredient like fiber has many benefits beyond digestive health, including managing satiety and blood glucose?
For now, condition-specific marketing is the bridge to mainstream understanding. Consumers may not grasp the intricate benefits of every ingredient (nor do they need to), but the appeal of a food simply marketed to “support heart health” or “support healthy joints” is simple. Understandable messaging is key. The IFIC survey indicates that 58% of consumers won’t buy a functional food if they feel they do not understand some aspect of a health claim. Other simple messages that consumers definitely comprehend include better-for-you reductions-reduced sugar, for instance, says Pam Stauffer, global marketing programs and communications manager, Cargill (Wayzata, MN).
Of course, even “simple” messaging faces obstacles these days. In light of EFSA claims rejections in the EU, marketers are currently dealing with the frustrating dilemma of the need to educate consumers about lesser-known ingredients without being able to make any claims associated with the health conditions they benefit. Lu Ann Williams, head of research at Innova Market Insights, comments on this Catch 22.“With the tightening up of regulations on health claims, particularly in the EU, it is increasingly apparent that consumer awareness and understanding of functional ingredients is necessary for the development of newer markets;” however, “the number of overt functional health claims is continuing to fall away in the wake of this, as it has necessitated a rethink by companies already in the market, often to the use of softer claims while benefiting from existing consumer awareness of the potential benefits of certain products and ingredients.” Put simply, if consumers are not already familiar with the health benefits of your ingredient, it may be difficult to get the message across at this time.
In the meantime, the path to health claims is ingredient science-something the industry is working diligently on. “Significant investment in R&D will be required to prove ingredient benefits," Williams confirms. Indeed, consumers need to trust that functional foods work. The IFIC survey notes that 72% of consumers are “skeptical of food manufacturers’ motives for adding health components to so many products.” Good science is a way to gain that trust.
“The industry as a whole could be ruined by manufacturers or suppliers that make false or misleading claims about ingredients or finished products. Now more than ever, consumers need solid science and honest information as well as the assurance that companies are taking the proper steps to ensure purity, quality, and efficacy,” Bergstrom’s Hammond says.
Another challenge for functional food marketers is ensuring they reach the right audience. The senior market should be the ripest of all for functional foods, but in previous Nutritional Outlook articles, Innova Market Insights pointed out that many functional food marketers fail to address seniors in key markets like brain health and general antiaging. Innova also points out that functional foods miss out on key opportunities such as eye health and joint health.
“Baby boomers are the single largest consumer demographic at the moment and for the foreseeable future,” says Patrick Morris, communications manager, Fortitech Premixes by DSM (Schenectady, NY). “The concept of 'healthy aging' isn't just hype. This is a group of consumers that actively look for functional products to address the issues all of us face as we grow older.”
Regarding “the 50+ population, this group’s buying power, coupled with an increased interest in health and wellness, creates the potential for increased functional food sales,” says Barb Murphy, director, consumer insights, Corbion (Lenexa, KS). She also points out that as functional foods also look toward broader audiences, “the opportunity requires a shift in perspectives, a different approach.” For sports nutrition, for instance, “Marketers have traditionally focused on sports teams and hardcore athletes, rather than women, weekend warriors, and other consumers pursuing individual sports and fitness activities. Now, the newest sports drinks are designed to appeal to all ages-from flavors and ingredients to packaging. As part of this marketing shift, more and more packaging graphics and messages communicate energy and fitness without relying on traditional sports imagery.”
And what of technical challenges? According to IFIC, up to 70% of consumers are also worried that functional foods won’t taste as good. Through the years, ingredient suppliers and food formulators have made great strides in making functional nutrition tasty and sidestepping formulation challenges. Read a recent Nutritional Outlook article detailing some of specific ingredient solutions pertaining to functional foods.
If it can navigate these challenges, the functional foods market has a lot of powerful benefits working to its advantage.
Convenience and the ability to fill nutrient gaps on the go is one. “Many consumers manage fast-paced and oftentimes over-scheduled lifestyles for themselves and/or their families. Functional foods allow consumers to get a bigger bang for the buck by providing benefits beyond basic nutrition,” says Cargill’s Stauffer.
“Our lifestyles have us running 24/7, not leaving a lot of time for a balanced diet, which ideally would support our nutritional needs. A fortified food or beverage can help fill the nutritional gaps that we may experience due to the hectic pace of our lives,” seconds Fortitech’s Morris.
Jane Duvauchelle, East Coast sales director, Bergstrom Nutrition, adds, “Not only is orange juice easy to sip as we run out the door in the morning, the vitamin C offers ingredients that support connective tissue that is complemented by the orange juice. While this objective or definition of functional foods hasn’t changed for many in the industry, the practically of it has.”
And, Corbion's Murphy reminds, “while energy drinks are a big seller, the flip side is paying off too: The faster life’s pace, the greater the need to slow it all down, at least once in a while. Look for functional foods and beverages that promote relaxation to increase in popularity as the market searches for a remedy to the stresses of day-to-day life. “
Most crucial to the functional food cause is the fact that today’s customers want to be healthier. “Consumers have an ongoing interest in improving their health and are still keen to buy healthier options,” says Innova’s Williams.
“Baby Boomers have been hearing the ‘you are what you eat’ advice since they were in elementary school. As health awareness continues to expand, an increasing number of people are looking for healthier alternatives within their existing diets,” says Rodney Benjamin, technical director, Bergstrom Nutrition.
Opportunities abound worldwide. “The United States definitely offers tremendous potential, but the international landscape offers a lot of opportunity as well,” says Fortitech's Morris. “The economies within the BRIC countries (Brazil, Russia, India, and China) are growing exponentially, and as people's incomes increase, their propensity to, at the very least, try a functional product increases.”
Functional foods are a tool by which consumers can take control of their health-an attractive proposition for the modern consumer, Ingredion’s Luchsinger points out. Functional food “fits in with today’s increasingly individualistic consumer, which places considerable value on self-expression and asserting their individual identity- leading to nutritional individualization. Functional foods, therefore, offer the consumer a way to ‘self-manage’ health and think of themselves more as a unique person with unique needs and less as a target group.”
Nutritional Outlook magazine