An ageing population, advances in medical knowledge, new research and development by manufacturers and changes in food consumption habits are all contributing to growth in the functional foods industry, according to a new report* from Euromonitor International.
Enhanced ‘good’ foods take over from ‘less-bad’ products
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Healthy eating trends and changes in lifestyle are altering food consumption patterns and encouraging consumers to buy low-fat foods or cut out on some products altogether. Food manufacturers first responded to changing tastes by producing “lesser-evil” foods (with lower fat, cholesterol, and salt), and are now looking at those which actively enhance health. Reduced-fat foods may be ‘less-bad’, but they do not promote health in the way that functional foods can lower cholesterol or provide added vitamins.
Stressed consumers look for short-cuts to a healthy diet
Functional foods are perceived to be one answer to unhealthy, stressful lifestyles. While a growing number of consumers understand the importance of good nutrition, few of them are able to factor this into their busy lifestyles. Growing time pressures and the ‘snacking culture’ have contributed to less attention being paid to regular meals. One in three Australians now regularly skips breakfast and almost 80% of Europeans associate some difficulty with trying to eat a healthy diet. For consumers unable to follow dietary guidelines, functional food products may represent a “quick-fix” – an attractive half-way house between healthy eating and an unhealthy lifestyle.
Functional foods market doubles in last five years
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By GlobalDataEuromonitor estimates that the world market for functional foods was worth US$27,854 million in 1998. Sales are predicted to have grown by 13.7% to reach US$31,661 million in 1999, with a substantial increase of 53.5% in the world market registered over the period 1995-1999.
One of the main drivers behind this growth has been greater life expectancy in the main developed economies. Researchers at AstraZeneca estimate that in the US the cause of death in one sixth of cases is diet-related. In the future diet plans could well be designed on the basis of an individual’s genetic pre-disposition to certain diseases. Of more immediate relevance, a greater understanding of the links between diet and health is already having an impact on consumer behaviour.
Functional Foods: Value Sales Of The Leading Sector By Country
1995/1999
US$ million
| Country | Leading Sector by Sales | 1995 | 1999 |
| Japan* | Probiotic dairy | 22.1 | 823.3 |
| Canada | Bakery products** | 501.7 | 561.2 |
| US | Bakery products** | 6,552.10 | 9,754.50 |
| Australia | Ready-to-eat cereals | 386.8 | 331.1 |
| Austria | Functional dairy | 7.3 | 47.4 |
| Belgium | Functional dairy | 21.1 | 19.4 |
| Denmark | Dairy | 22.4 | 52.3 |
| Finland | Probiotic dairy | 332.6 | 274 |
| France | Dairy products | 520.1 | 524 |
| Germany | Functional drinks | 229.6 | 240 |
| Norway | Dairy | 3.6 | 15.7 |
| Netherlands | Dairy | 87.6 | 165.1 |
| Sweden | Dairy | 47 | 78.7 |
| Switzerland | Pro-biotic dairy | 6.8 | 43.1 |
| UK | Ready-to-eat cereals | 598.9 | 726 |
Note: estimated data for 1999 based on part-year results
* Figures for Japan cover FOSHU category only [ FOSHU = Food for Specified Health Use – legal term classifying certain foods which make health claims]
** Bakery products include ready-to-eat cereals
Growth depends on favourable regulations and consumer reaction
Euromonitor forecasts that without interference from restrictive legislation, the global market for functional foods will reach US$51.3 billion in value by 2004. However, barriers to growth include regulation, confusion over the meaning of the term functional, over-complex health messages, product failures and the negative reception to GM foods.
*Data taken from Functional Foods: A World Survey, published January 2000
