Kraft follows its gut instinct

The recent tie-up between Swedish biotech company Probi and Kraft Foods underlines how significant the probiotic food sector is becoming to major food producers. Probi will be supplying probiotic ingredients for Kraft's expanding LiveActive range, aimed at tapping into a market where consumer interest and sales are on the rise. Ben Cooper reports.

If multinationals aren't setting trends, they are generally following them, and much can be read into the deal struck between Kraft Foods and Swedish probiotic specialists Probi last month.

Under the agreement, Probi is to supply probiotic ingredients for Kraft's growing line of LiveActive foods and drinks. Kraft launched the LiveActive range, which includes cheeses containing probiotic cultures and prebiotic fibres, in Canada last March, following this with a launch in the US in September.

The full range comprises natural cheese snacks, cottage cheese, cereals and beverages. Probi says it is likely to see a commercial product featuring its probiotic ingredients on the shelves "within a few months".

Kraft's launch of the LiveActive range and its subsequent tie-up with Probi speaks volumes of the growth in probiotic products, which are aimed at improving digestive health. The health and wellness trend has spawned numerous market trends and growth categories, ranging from basic low-fat and low-sugar variants of mainstream products to cholesterol-reducing spreads, but probiotic foods are one of the most dynamic performers within the functional foods market.

Indeed, a new report from just-food suggests that over the next decade, digestive products will overtake those aimed at improving heart health in popularity in Europe, principally because the concept is easier for consumers to buy into.

According to the report, Global market review of functional foods - forecasts to 2013, there are two prime areas of the functional foods market, one targeting heart health and the other digestive health. But the market opportunities in the latter arguably represent more fertile ground for food companies, the report suggests, owing to the wider consumer interest in these products.

"Digestive health is more of a wellbeing issue while heart health is associated with more serious illness and death", the report states. "The past decade has indicated that wellness benefits appeal to a wider range of consumers, whereas serious medical benefits tend to appeal to a niche who are at rather immediate risk from a medical condition."

The medical rationale behind research and development into digestive functional ingredients is clear. It is estimated that one-third of cancers are diet-related and 66% to 75% of gastrointestinal tract cancers may be preventable by dietary modifications, the report points out. It goes on to forecast that sales in Europe of functional foods targeting digestive health will grow by 70.2% to around US$1.4bn by 2013, oustripping growth in the heart health segment.

The report's findings also help to explain why Kraft and its peers are so interested in the probiotic segment in particular. "The food industry is in a unique position compared to the pharmaceutical industry with a wider range of marketing tools and techniques at its disposal relating to the communication of functional food ingredients' health benefits," the report states.

"Digestive health is important to many Americans and Kraft is committed to offering a variety of delicious foods with a digestive health benefit," says Amy Wagner, senior marketing director for LiveActive at Kraft. "We're looking forward to working with Probi to develop innovative products to meet this consumer interest."

Probi suggests that with its LiveActive range, Kraft is "demonstrating leadership" in the growing digestive health category. "Probi's well proven probiotics, combined with the strength of Kraft's LiveActive brand, will be key competitive advantages in the rapidly growing US market for nutritious foods," says Probi CEO Michael Oredsson.

The growth trend in probiotic foods appears equally strong in Europe. Underlining the growing interest in this area of the functional foods market, the report reveals that of the 759 health-claim petitions submitted to the European Commission (EC) for consideration under the new European Health Claims legislation, more fell under the digestive health banner than any other health concern category.

The growth in the UK is underlined by a change of market leader in the yoghurts and chilled desserts category.  Sales of yoghurt in the UK rose to almost GBP1bn in 2007, according to TNS Worldpanel, with the trend towards healthier eating seen as the prime catalyst. Furthermore, Danone's Activia brand has replaced Muller Light as the UK's leading yoghurt brand, having seen UK sales grow by 16.4% in 2007. In the yoghurt drink market, Danone UK's Actimel brand recorded sales of EUR131.8m in 2007, ahead of Muller Vitality with EUR35.9m and Yakult with EUR25.1m.

For more information, or to download the just-food report, Global market review of functional foods - forecasts to 2013, go to http://www.just-food.com/store/product.aspx?ID=62137&lk=sup