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September 16, 2016
In today’s market, when we talk innovation, the functional food and beverage segment is at the top of the totem pole. Sales projections for this category are US$279 billion by 2021, which signifies more than 60 percent growth from 2014. According to the market research firm HealthFocus, consumers are most interested in food and beverages that deliver the following benefits:
• eyesight maintenance,
• metabolism boosting,
• cognitive health improvement, and
• the promotion of stronger bones.
Consumer demand for functional products is increasing, which presents a unique set of challenges for product developers. However, it is possible to create beverage products that incorporate functional ingredients and make them taste good. There are just a few important guidelines to follow.
First, get off to the right start by remembering beverage development (or any product development project) doesn’t or shouldn’t happen in a silo. It’s crucial to assemble a multidisciplinary team to define the attributes of your product from the very beginning. Everyone on the team is working toward the same goal—making the best possible product that exceeds consumer expectations—but the earlier they’re all involved in the conversation, the better. If the marketing team wants to make certain claims on the front of the package, for instance, it’s critical the product developers are informed of those claims so they don’t have to reformulate to meet those conditions at a later date.
Next, know your cost targets. Recently, a client instructed our research and development (R&D) team to formulate using stevia because the brand holder wanted the product to be naturally sweetened. We created a product the client loved; however, once the operations team got involved, the client realized the formulation exceeded the budget, so it was necessary to switch to a less expensive, artificial equivalent. This last-minute change cost time and resources—and could have been avoided if the client had aligned its internal teams earlier in the project. Know costs targets upfront so you can formulate accordingly.
This illustrates how important it is to have a high-order discussion. Instead of having to say, “I thought that was critical, but given the costs, it’s not worth it" late in the game, prioritize things that are essential to your brand identity versus the “would be nice" components from the beginning. For example, you might have decided using “natural" colors would differentiate the product, but not realized the impact they could have on cost and performance relative to their FD&C [Federal Food, Drug, and Cosmetic Act] counterparts.
Similarly, don’t make decisions in a vacuum. Decisions on formulation, packaging and branding are all related, so it is advisable to unite a multidisciplinary team that has regulatory, flavor development, product development, supply chain and production knowledge. Bringing in a technical voice early when defining product attributes will also help avoid potential obstacles. For instance, if you have a package in mind, the technical group will make sure it can withstand the processing required. Thinking about any project holistically can help minimize issues throughout the development process, since many functional ingredients present their own unique challenges.
Finally, a major consideration is determining whether the product is going to be categorized as a traditional food/ beverage or a supplement. There are different regulations for each that dramatically impact many critical product attributes. This classification will affect a variety of factors such as co-packer selection, the ability to make certain claims, the location in the store, and the potential stigma or consumer perception surrounding the safety of a supplement.
Functional benefits are a major trend right now in the food and beverage industry. This category is headed for continued growth, but it’s still critical to know your consumer and his or her core values. Don’t try to create a product with a function or value for everyone. Work with partners who are knowledgeable about ingredients that inherently offer the benefits consumers are looking for, and develop a great product that addresses the needs of your target consumers.
Andy Dratt will be speaking at SupplySide West 2016 on the realities of formulating with the trendiest functional ingredients, while also touching on the impact that other decisions—such as packaging, marketing claims and nutritional profiles—have on formulations. He’s part of the Sparking Beverage Innovation workshop, Wednesday, Oct. 5. Catch a sneak peek in this video on functional beverage formulation.
Andy Dratt, executive vice president at Imbibe, has led both business and research and development (R&D) teams to work with billion dollar brands at some of the most notable flavor companies. He has been able to leverage his experience of the past 20 years to help consumer packaged goods (CPG) and foodservice operators conceptualize, develop and bring new products to market in the United States, Latin America and Europe. Visible in presentations delivered at industry events and articles in several publications, Dratt has an obvious passion for helping customers identify and exploit the “sweet spot" between consumer needs, business wants and product realities.
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