The global functional foods market continues to be a dynamic and growing segment of the food industry. But as the sector’s success becomes evident, regulators are becoming increasingly involved. Could this create a barrier for the industry, or spur further growth? just-food.com reports.
Functional foods have experienced great success over the last few years, emerging from a niche market to a mainstream market category. As the market has matured and expanded, large food companies and government regulators have become key players in the global functional foods marketplace. Solid science regarding safety and efficacy is pivotal in ensuring future market success and consumer confidence.
The current global functional foods market is estimated to be worth US$7-63bn, depending on sources and definitions, and is expected to grow to $167bn by 2010, according to a report by just-food. The functional foods product category is expected to continue to grow strongly through to 2006, and taper off by 2010 as the market matures. The global growth rate for functional foods will likely achieve an average of up to 14% annually through to 2010. After 2010, the functional foods market size is expected to comprise approximately 5% of total food expenditures in the developed world.
Functional foods – a definition
Functional foods are defined as those foods or food components (whole, fortified or enriched with functional food components) that are scientifically recognised as having physiological benefits beyond those of basic nutrition. Examples include margarine-style spreads that contain cholesterol-lowering plant stanols, and probiotic fermented dairy drinks that contain “friendly” bacteria, believed to improve gut health.
However, a constantly evolving food market, regulatory conflicts, consumer perceptions and new scientific research will continue to revise the definition of functional foods. Japan is the only country with a specific regulatory definition and approval process for functional foods. In the United States and Canada, several organisations have attempted to define functional foods in the absence of a specific regulatory framework. In Europe, where in comparison to Asia the concept of functional foods is relatively new, the European Union (EU) has adopted a working definition for functional foods, despite the lack of current Europe-wide regulations.
But whatever the definition, it is clear that the current functional foods trend and the growing research and development surrounding it is being driven by four underlying forces: consumers, the food industry, scientific research and government/regulatory bodies. Consumer trends driving the functional foods market include growing attention to health, motivation to take control of one’s own health, and the ageing population.
Increased interest in health
The majority of product innovations in the functional foods market are being driven by specific health concerns and interests, such as heart and cardiovascular health, bone health and osteoporosis, gut health and immunity, cancer and preventive health, prevention of neural tube defects, age and gender-related health, mental acuity and brain health, and physical performance and sports health.
In addition to new product innovations, food companies are also repositioning and reformulating existing foods, in response to the growing consumer demand for healthier choices. As the functional foods market has matured and expanded, large food companies have gravitated towards supporting science about the health benefits of constituents in their products, in addition to securing solid scientific backing for new products. Despite the focus on the success and potential successes of functional foods, the safety and efficacy of functional foods remain concerns. The safety and efficacy assessment of newly marketed products comprises an extensive area of regulation and research.
Regulation: a barrier or a driving force?
Globally and nationally, the regulatory environment plays a vital role in the success of functional foods. With a thriving functional foods market, perhaps superior to any other country, Japan led the initial development of functional foods worldwide, enabled, in part, by the early adoption of a regulatory framework.
Historically, regulatory issues have served as one of the largest barriers to functional food market entry; however, successful regulation will be a key driver in today’s more mature functional food industry, according to the report. Future growth of functional foods is dependent on the consistent use of terms and labelling, and credible and valid consumer education efforts. Solid regulatory frameworks could help on both these fronts.
The marketing of functional foods requires a unique strategy compared to other foods. Because of the highly innovative nature of functional foods, the degree of their healthful qualities cannot be directly assessed by consumers but rather functional foods benefits must be substantiated by science and government.
To ensure continued success, marketers, retailers, manufacturers, regulators and scientists must work together to promote truthful, healthful, quality products to meet consumer needs. As scientific understanding of nutrition and health continues to evolve, large companies develop and promote their products on a solid base of science, and countries continue to adopt proven, understandable health claim regulations, the industry will likely surpass even the most favourable growth predictions. According to the report, companies will gain competitive advantage if they build nutrition into overall corporate philosophy and mission, rather than limit the concept specifically to products or brands.
Click to find out more about just-food’s new report, Global market review of functional foods – forecasts to 2010.