November 19, 2012
The market for enhanced foods and beverages with a health halo continues to grow in step with changing consumer health and wellness lifestyles. Nutrition Business Journal estimated the functional food market at US$39 billion in sales in 2010, up 4.6 percent from 2009. Energy drinks, nutritional bars or cold cereals with both added and inherent nutritional profilescategories of foods and beverages that might qualify as functional"are diverse when viewed from an industry perspective, and even broader when viewed by changing shoppers. One reason for the broadened consumer perspective of what constitutes a functional" food or beverage stems from semantics and the logical connections made by average Americans as they both intentionally and also somewhat accidentally consume products that they might view as functional. In the words of one of our shoppers interviewed, when asked about what a functional food is: Lettuce like in a sandwich?"
While this might be an extreme example of the disconnect between industry classifications and the public mindset, consumers are quick to understand that functional, once explained in greater detail, means all those products with either added" ingredients or those viewed as inherently functional from a health standpoint. Many will jump to describe enhanced examples such as yogurt (with that digestion stuff") or orange juice with calcium or inherently functional products such as oatmeal (it does good things for your heart, right?"). And yet the lettuce definition is quite meaningful and reflects important consumer beliefs behind not only the success of enhanced foods and beverages, but the broader health and wellness market itself.
The Hartman Groups Reimagining Health + Wellness 2010 and 2011 Health and Wellness Deep Dive" reports found consumer understandings of functional products reflect certain elements that are essential for creating relevant functional foods and beverages today. Specifically, products should build on what consumers believe is inherent nutritional functionality" (e.g., shredded wheat provides fiber) or products should be developed based on foods or beverages that are culturally relevant as a delivery medium (e.g., milk with added vitamins makes sense while calcium in carbonated soft drinks does not).
As an overall trend within functional food and beverage consumption, we see consumers navigating wellness with greater breadth and depth of knowledge. Specifically, we are witnessing a cultural shift from health" toward quality of life," where todays consumers focus on positive and vital experiences, emotional wellness, new exercise techniques, complementary medicine and what they view as clean, real foods"
These positive, proactive beliefs relate to some of the most successful functional products, which generally reflects the positive orientation toward wellness and quality of life that todays consumers seek. For example, Dannons Activia yogurt with active cultures reflects a proactive mindset among consumers seeking better digestion and what they believe can be increased vitality. The Hartman Groups 2011 Health and Wellness Deep Dive report found consumers differ in terms of their position within the World of Wellness when it comes to products and brands they view as the best" in health and wellness foods and beverages. Consider, for core" wellness consumers (those most involved in wellness lifestyles, 13 percent of the population), so-called functional" product benefits sought include the perceived ability to cleanse and detoxify," as well as criteria based on freshness, taste, nutrition and preventive characteristics. Emotionally, core wellness consumers seek product benefits that relax, satisfy, renew and offer indulgence, which cue to simplicity, authenticity and sustainable sourcing. Conversely, those consumers least involved in wellness lifestyles (periphery" wellness consumers, 25 percent of the population) are much more likely to seek pragmatic functional benefits like hydration, satiation and replenishment, and are more likely to respond to product positioning relating to taste, value and less" sugar, fat and sodium.
Food and Quality of Life
Hartman Group research shows consumers view fresh, real and clean" food as the foundation for health and wellness lifestyles. They believe a fresh, real and clean diet is the first step to treat and prevent disease, support vitality and ensure mental energy. Such a belief in food as the foundation of wellness has implications for functional food and beverage marketers because, in a sense, consumers view real food as functional." However, consumers are mainly focused on gaining inherent nutrition from a variety of whole foods.
Functionality of food is usually connected to overall well-being rather than targeted, acute health conditions. Consumers, especially those most active in wellness, seek positive nutrition in food and have the knowledge to connect foods to positive health benefits. Yet, once its too late," food becomes relegated as a secondary wellness tool. The too late" threshold and the use of ancillary tools (prescription drugs, dietary supplements, etc.) are likely to vary by consumers orientations to wellness. However, food is still considered essential to treating issues long term, even for conditions that are viewed as best treated with other wellness tools such as over the counter (OTC) drugs, prescriptions, health treatments, etc.
Consumer perceptions of the best" health and wellness foods and beverages show a gathering separation between products (and even categories) that might be seen as inherently functional and those functional products formulated and enhanced by manufacturers. While shelf-stable fortified drinks, snacks and related foods and beverages are succeeding with a broad spectrum of wellness consumers, the most successful functional brands going forward will need to be developed with an understanding of what type" of wellness consumer they are marketing to (core, mid-level or periphery) and what kinds of benefits such consumers are seeking.
As president and COO, Laurie Demeritt provides strategic and operational leadership for The Hartman Groups research and consulting teams. Demeritt and The Hartman Group analysts are recognized for their unique ability to blend primary qualitative, quantitative and trends research to help clients develop successful marketing strategies by understanding the subtle complexities of how consumers live, shop and use products and how to apply that understanding in ways that lead to purchase.
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