The idea that certain foods may be eaten to maintain a healthy body may not be new, but the last decade has witnessed the evolution of a multibillion-dollar market that has capitalised on this very concept. Nutraceuticals are bucking an otherwise staid food market to reach an ever increasing consumer base.
Go deeper with GlobalData
The global introduction of nutraceuticals has seen the creation of a tertiary definition of food, one that moves beyond the notions of taste and nutrition, and into physiological function. Food may be used not only to sustain life, but also to enhance it.
It is widely believed that US scientist Stephen L DeFelice, founder and chairman of the US-based Foundation for Innovation in Medicine, first coined the term ‘nutraceuticals’ in 1989 to mean a food, dietary supplement or medical food that has a medical/health benefit including the prevention and treatment of disease.
Designer foods attracting premium prices
Fourteen years later, nutraceuticals are still widely understood to be a generic tag for any substance that is a food, or part of a food, with medicinal properties or a specific health-promoting function. Manufacturers are constantly striving to offer the consumer something more in their nutraceuticals, which range across a wide variety of categories from isolated ingredients to designer foods and processed products. Extra health-giving properties in foods that address the notion of health in healthy bodies, as well as those offering some protective or curative function against disease, are attracting consumer attention as well as higher retail prices.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataConfusion still abounds, however, prompted by an explosion of language around the idea. Research suggests that 75% of US consumers, for example, have never even heard of the term ‘nutraceutical’. Every day more nutraceuticals, superfoods, fitness foods, foodaceuticals, functional products, FOSHU (foods for a specific health use), designer-, fortified-, enriched- or enhanced foods hit the shelves. This plethora of terms is used interchangeably as they fall in and out of fashion, but are generally intended to carry slightly different connotations.
Nutraceutical is also a descriptor for herbal remedies and vitamin and dietary supplements (VDS), an industry that may actually be seen to predate the self-conscious existence of the ‘nutraceutical’. In many ways, the VDS market grew out of once marginalised hippie or new-age concepts of wellness or well being. Consumer interest has also been promoted by sharp increases in the price of prescription drugs, as well as a number of media reports about the adverse effects of the drugs themselves. In many ways, modern consumers often see VDS as a safer alternative to prescription pills, and while this has been buffeted by questions relating to the safety of supplements such as ephedra, increasing regulation should help allay fears.
Dynamic growth
The global nutraceutical market is dynamic, and there can be little doubt that it has expanded exponentially in recent years. The potential range of nutraceuticals is limitless, given the wide range of food products available to many consumers today, but while there is a dearth of functional foods in certain categories, the innovation of manufacturers shows no sign of abating. And despite being a relatively mature market in terms of sales in developed countries, its continued growth is virtually guaranteed by a variety of factors, the most important being:
- Scientific evidence that food may provide benefits other than pleasure and nutrition;
- Greater social emphasis on personal responsibility for health and self-medication, prompted by an escalating healthcare expenditure;
- Ageing populations (and ever increasing life expectancy);
- Increasing consumer interest in understanding the relationships between diet and diseases such as cancer, arthritis, diabetes and cardiovascular diseases.
Prompted by such factors, two major trends can be identified in the nutraceutical market. Firstly, the ‘food as medicine’ category promises to help the consumer in dealing with particular medical ailments. Such foods claim to prevent or treat specific conditions. In this way, for example, the margarine Benecol promises to lower cholesterol while others, such as Columbus Healthier Eggs, suggest that the addition of Omega-3 fatty acids offer some degree of protection against heart disease and cancer.
Meanwhile, the food market has long since offered low and light products for the waist-conscious consumer, but these are growing dramatically with the functionality of nutraceutical ingredients as a solution to the spreading epidemic of obesity. Also incorporated within this trend are life age products that ease the specific health implications of ageing or address the specific needs of infants.
Secondly, nutraceutical ingredients are also added to create nourishing products designed to replenish the healthy body’s strength and vitality in a more general lifestyle sense, aiding both physical and psychological well being and catering for the ‘filling in the nutritional gaps’ philosophy. This includes well established categories such as sports drinks to boost energy levels after exercise, for example, or meal replacement or supplement bars. Such products are a convenient means of augmenting consumers’ nutrient intake while answering the pervasive demand for ‘food-to-go’. And at the cutting edge of lifestyle nutraceuticals, food manufacturing giants such as Nestlé are also making forays into the cosmeceutical world of food products that offer beauty benefits. Others, such as French homeopathy specialist Dolisos, are offering supplements that are designed to relieve stress and promote general mental health.
Hurdles to jump
To get ahead however, companies must learn how to maximise consumer interest and understand not only the nuances of the current market, but also the potential for changing trends and legislation, as well as the importance of apposite marketing. With the burgeoning market has come a series of new challenges and firms must avoid the common pitfalls if they are to ride the wave and ensure high profile visibility, consumer loyalty and increased profit. Not least, companies must fight through the nomenclature chaos to assess consumer needs and wants. While the concept of nutraceuticals is broad, the term means different things to different people and manufacturers face a real challenge in simultaneously addressing a variety of different consumer expectations.
The greatest challenge comes in the form of a changing regulatory environment. Companies worldwide must weather the storm of increasing legislation before they can fully enjoy the boost that is generated by consumer confidence. Regulatory developments may hinder the rapid development of new products, and the lack of harmony in international law multiplies the hurdles that complicate the export of nutraceuticals. In the long term however, companies must embrace the potential opportunities offered by official, independent endorsement.
There is also the uncertainty of manufacturers regarding price, and the effect on all-important margins resulting from difficulties in obtaining patent protection. The growth of retail opportunities on supermarket shelves has the duel effect of increasing competition amongst manufacturers and battering the price premium such products have commanded in traditional pharmacy stores.
Meanwhile, with increasing consumer sophistication comes the demand for the authentication of product claims. Clinical trials are costly but independent academic evaluation is essential to ward off scepticism about claims. Brand identity, that necessary handmaiden to the promotion of consumer interest and confidence, has been relatively under-developed in the nutraceutical arena. This is something that must be addressed with a large degree of marketing savvy if companies are to respond to consumer needs and maximise the opportunities present within the category.
This is an important time for nutraceutical manufacturers to guard against complacency. Nevertheless, for those products encouraged by consumer interest and backed by the authentication of legislation, the power of savvy branding and increasing shelf space, sales and profits look set to explode.
This summary has been taken from The Global Report on Nutraceuticals, a new report from ABOUT Food. Further details about this report can be found here.
