Too many food manufacturers are launching functional and nutraceutical products without concrete evidence to back extravagant claims of health-promoting efficacy. For a market in which building credibility among consumers is the key to profit making, the only result will be to leave the entire sector sick and bloated, according to Promar International, a food and healthcare strategic consultancy. To dabble in the market is not an option, but with eyes firmly fixed on its $12.7 billion sales and healthy 15% annual growth rate, companies are flooding into the European nutraceutical and functional foods sector in the hope of grabbing a quick profit without fully grasping its consumer dynamics.

Health-oriented products are certainly all the rage. Pro-biotic wares – Yakult, Actimel, BIO and Gefilac to name but a few – springing from the food industry are being countered by new entries from the pharmaceutical giants – such as Novartis‘s Aviva range of gastro-, bone-, and cardio-beneficial products. A bewildering array of colourful brands and equally colourful healthcare claims now confronts the functional foods consumer, risking the credibility of the entire sector.

“Some food manufacturers are unwittingly shooting themselves in the foot trying to extend their standard ranges into the functional foods market,” says Kirill Derevenski, from Promar International. “The first thing consumers require from a health-enhancing product is credibility – both for the claims it makes and the manufacturer who produces it. In the eye of a consumer, a health claim coming from a food manufacturer may undermine the very manufacturer’s standard brand – is it unhealthy? Pharmaceutical companies have no problem with health claim credibility – but even Novartis will benefit from the consumer promotion experience of Quaker Oats. The best thing for the sector, and for the margins of those involved in it, would be to combine forces and know-how now, before the market is severely damaged by potentially harmful attempts to build market share.”

Food manufacturers can leverage their power and expertise in consumer understanding to help pharmaceutical companies and vice versa. “The sector is still up for grabs. Manufacturers who can commit to the functional food sector with innovative and customised products now are going to be winners in ten years time,” adds Mr Derevenski. “But without solid food/pharma partnerships we risk facing a fragmented market and a confused consumer”.

Promar International is currently undertaking a strategic study on Doctoring Foods in Europe to 2010. For further details, please contact Sandy Livingstone:
Tel +44 (0)1635 43363 or E-mail: slivingstone@promar-international.com