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Functional Foods & BeveragesA Matter of Positioning?

The global health and wellness market has managed to surpass the US$600 billion mark for the first time, according to Euromonitor International's latest health and wellness statistics. The United States remains the world's biggest market for health and wellness foods and beverages. Generating US$153 billion in retail value sales in 2010, it accounts for one-quarter of global sales.

In 2011, Euromonitor International identified 15 key categories possessing the most significance in todays health and wellness market environment, including general well-being, immune support, energy boosting and cardiovascular health. 

General Well-Being Thrives on Mass Market Appeal

The largest category, accounting for close to 40 percent of U.S. health and wellness sales, is that of general well-being. Among the leading brands in terms of value share are many naturally healthy juice brands such as PepsiCo's Tropicana and its Coca-Cola rival Minute Maid, as well as Kraft's naturally healthy nuts brand Planters. Organic packaged foods and beverages make up a sizeable chunk of this category.

Part of the reason why general well-being is such a popular health and wellness platform is precisely because it does not make any overt allusions to disease. It is true that consumers, who have already been diagnosed with a specific condition, such as high blood pressure or diabetes, will purposely seek products that claim to alleviate or help with the management of these ailments. In many cases, however, it is unnecessaryor even counterproductivefor manufacturers to label their offerings in such a specific way. Besides having to traipse carefully around the issue of which precise wording and claims FDA may currently permit, forging connotations between a product and a disease effectively confines the appeal of a product to a small target group, rather than attracting a broad mainstream audience. 

The media have done much of the groundwork in educating the consumer base. Most U.S. consumers have a broad awareness of which foods and beverages are healthy and which ones are not, and all the media attention lavished on the impact nutrition on specific health conditions, including the power of superfoods, has ensured consumers know what to look out for in the aisles of supermarkets and health food stores. For instance, products labeled as high in antioxidants and/or omega-3s are just as suitable for consumers concerned about cardiovascular disease (CVD) as they are for those worried about cognitive health. Partly for this reason, no notable market exists yet in the United States for products leveraging brain health and memory as a prime positioning platform, although this is likely to change in the future.

Immune SupportProbiotics and Beyond

Immune support emerged as the highest growth category over the 2005 to 2010 review period, achieving an eight-fold increase in value, albeit from a small base of sales. Dannons DanActive probiotic drinking yogurt claimed 90 percent of category sales; but, complaints made to FTC led the company to drop its immunity health claims relating to the prevention of colds and the flu in December 2010.

This does not mean, however, that probiotics are finished as immune-support-positioned ingredients. With the muscle of major industry players behind them and strong consumer demand, it is only a matter of time before probiotics accrue the necessary scientific evidence to substantiate claims.

However, probiotics are not the only way to gocompanies are constantly launching innovative functional ingredients aimed at optimizing immune system functioning. Frutarom USA, for example, introduced an herbal immunity-boosting ingredient made from pelargonium (geranium) root extract in April 2011. According to the company, its EFLA956 Pelargonium Root Extract showed in clinical tests that it had the capacity to reduce the severity and duration of throat, nose and bronchial irritations, and was found safe for adults and children suffering from colds. This makes it highly suitable, for instance, as an active ingredient in medicated sweets.

Energy Boosters Well Received

Taken over the 2005 to 2010 review period, the energy-boosting prime positioning platform delivered the second highest value growth rate. Energy drinks posted another fairly solid year in 2010, managing a 3-percent value increase. While there was a slowdown in new products introduced to the market, the top three brandsRed Bull, Monster and Rockstarenjoyed unabated popularity, all gaining in value share. This was helped greatly by the proliferation of energy shotssmaller 2-oz. (59 ml) versions of their popular standard-sized counterparts. Energy drinks' core consumer group are young males, and as the recession did not negatively impact younger consumer groups as much as it did the more mature ones, the uptake of premium-priced energy drinks remained strong. Despite the buzz of functional drinks, snack bars emerged the top-performing category among energy-boosting-positioned products in 2010.

Cardiovascular Health Platform as Prime-Positioning Focus

Although much can be said in favor of the non-specific general well-being positioning platform, which appeals to the widest possible audience, there is, of course, plenty of scope for products with a more specific focus, especially as the Baby Boomers age, and the incidence of chronic disease continues to rise.

CVD, for instance, is particularly widespread. According to the Centers for Disease Control and Prevention (CDC), 26.8 million non-institutionalized adults are diagnosed with heart disease in the United States. The number at risk of developing heart disease, e.g., due to other conditions such as obesity, diabetes, hypertension, elevated cholesterol and/or triglyceride levels, or because they engage in risky behavior such as smoking, is much higher still. Euromonitor International's prime-positioning statistics show that just under US$4 billion of health and wellness foods and beverages were chiefly aimed at cardiovascular health, and although the recession caused a marginal decline of 1 percent in 2010,  this positioning platform is set to gain in importance in the long-term.

Other prime positioning platforms for packaged foods and beverages, which are negligible right now, but which should gather force in the future, are brain health and memory, and vision health. The latter, for instance, will receive increasing stimulus as diabetes rates soar, because visual impairment is a major complication resulting from the condition. 

NOTE: For a more detailed look at the market and trends in functional foods and beverages, Ewa Hudson will present the seminar "Global Performance of Health-Positioned Food and Drinks" on Thurs. Oct. 13, from 9am to 9:50am, at SupplySide West trade show in Las Vegas. Visit the SupplySide West education listing for more information .


Ewa Hudson heads health and wellness foods and beverages research at Euromonitor International , which she joined in March 2003. Hudson is responsible for working with the international client base of Euromonitors online Health and Wellness Foods and Beverages Passport. Before joining Euromonitor, she worked as a senior analyst for Snapshots International overseeing consumer market research for Eastern Europe, the UK and United States. Hudson has a masters degree in economics from the University of Poznan, Poland, and studied post-graduate marketing at the University of Westminster, London.

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