Following on from the first part of last weeks feature on functional foods, Rajiv Desai looks to the future of the sector and how manufacturers are trying to gain consumer acceptance of their products through legitimate health claims.
To read the first part of Rajiv’s feature, click here.
Creating positive consumer awareness for functional foods can come from a variety of sources. One area that has promoted exposure in the US and Japan has been publicity around approval systems for ingredients and foods with a health benefit. Claim communication is a key factor in whether the functional food market will take off. A product that has validated scientific efficacy to prove its health benefit, through an approved health claims system is vital to the overall success of the product in the consumers eye and the functional food sector in general. Gardette’s research backs this up with 49% of respondents citing hard clinical research backing a health claim as a critical success factor for a product.
Japan has an established approval system, Foods Of Specified Health Use (FOSHU). A product passed by FOSHU has a legal health claim that consumers have been aware of for the last decade. In the US, recent approved health claims for products containing the ingredients soy, oats and psyllium by the Food and Drug Administration (FDA), have received widespread national coverage. Products containing these ingredients in the US are allowed to carry a specific health claim relating to the benefit the product may confer.
As a result of the soy protein-approved claim, the sale of soy-based products is now firmly established in the mainstream food arena with manufacturers flocking to join the gold rush. Quaker Oats, which has carried an FDA-approved health claim for oats on its cereal products, has no doubt that claims educate consumers about the health impact of a product. “Consumers have an assurance that the science behind a product is absolutely true. A claim provides a competitive advantage,” comments Cathy Kapica, a senior scientist with Quaker Oats in Chicago.
As yet there is no pan-European health claim system in place, making it difficult for manufacturers to create positive awareness for products with a health benefit. At the moment, consumers in Europe seem confused by health claims on product with little or no guidance as to whether the product’s perceived health benefits have been scientifically approved. The present system where individual states in the EU have their own regulation or voluntary agreements can allow for a free-for-all for producers to mislead, confuse and even endanger the public.
A food company that undertakes a development to functional foods must be aware that when it launches its product there is substantiation of health claims. Market development of the sector may be negatively influenced if unproven claims reach the consumer.
The Advertising Standards Authority (ASA), the UK regulatory authority for print advertising, has in the last five years upheld misleading claims in a number of products including SmithKline Beecham‘s Ribena Tooth Kind (tooth decay) (for recent story, click here), Kellogg’s All-Bran Cereal (heart), Kellogg’s Special K (heart), MD Foods’ Pact margarine spread with Omega 3 (cholesterol) and MD Foods Gaio Soya Yoghurt (cholesterol). In all the cases, the ASA found there was not enough scientific evidence to back up the advertised claim. The ASA decisions do not have a binding effect on the manufacturers (the ASA only acts on a complaint) but the cases have highlighted negative publicity for their products that have ultimately damaged sales.
One product that has in recent years gone through a system of regulation in the EU is Unilever‘s Flora pro-active, a cholesterol-lowering plant sterol based margarine. The product was subject to EU Novel Foods Regulation as it contained an ingredient that has not been used for human consumption before. Unilever did gain approval for the product, two years after the regulatory process had started.
Unilever believe the endorsement of the EU has a clear marketing benefit as it creates a positive awareness of the product in the consumer’s mind, despite not being allowed to carry a specific health claim. “Flora pro.activ is the only cholesterol lowering spread to have received EU Novel foods approval. This approval gives additional reassurance to consumers that the product is highly effective and safe for all, coming with the backing of experts,” says Matt Hill, European Marketing Manager of Unilever’s Van den Bergh Foods, the company responsible for the marketing of Flora pro.active. The group feels the EU approval gives its product an edge over Raisio’s Benecol, the competing product which did not need approval as it was on the shelves prior to the introduction of the EU Novel Foods law.
Both the food industry and consumer groups believe that a EU Directive on health claims would benefit the industry and give consumers confidence in the products they buy.
A mass market will only develop if the pricing of functional food products is such that the consumers in lower socio-economic groupings can afford the product. (The need for good nutrition is the highest in this grouping, which is also the biggest target group for such products). Typically functional food products attract a premium price. In the UK, Benecol spread’s added ingredients does lower cholesterol for people with moderately raised cholesterol levels – but at a price: a 250g tub costs £2.49, compared to the same sized pack of Flora at £0.55. Where functional foods do provide proven benefits, their relatively high prices do not encourage people on lower incomes to purchase the product.
Aviva’s decline in the UK can in part be attributed to this fact, as consumers did not perceive the difference and benefits of its product range over traditional cheaper products. Novartis Consumer Health admitted that the product had not met consumer expectations and a re-evaluation of the positioning of its Aviva range had to be made in the UK. In other words, people were just not buying it
The functional foods market has a small but loyal audience, but the next step will be to encourage growth to the next level. The growth of the market will depend greatly on how consumers learn about diet and health connections, and how well manufacturers can promote these concerns and the products that can help the consumer within the established regulatory framework.
As Sheila McKechnie, Director of the UK’s Consumers’ Association points out. “The good news is that most consumers want to eat a healthy diet. The bad news is that aggressive marketing of foods with added health benefits, misleading information on labels, and no mandatory system of approval for health claims means that we can’t make sensible choices on food.”
Manufacturers clearly have to develop marketing strategies based on the science of the product, gaining credibility for its product by publishing clinical research on the health effects of products, gaining regulatory approval for health claims, and then communicating the diet and health prevention message (promotion of a product via health professionals and dieticians, public health campaigns, store literature and the media), rather than promoting the product directly. Only then will the consumer make the association between having good health and preventing disease, safety, efficacy and the functional food product.
In the short term, the functional food market will be characterised by more failures than successes, as consumers, manufacturers and regulators are very much on a learning curve. Expect to see continued mergers or acquisitions of companies already active in the functional foods market who boast strong consumer awareness. Joint ventures, licensing or partnership will also likely help the market move forward.