You may not have heard of them, but functional foods, which claim to confer additional health benefits to their standard nutritional value, look like the next big thing.
Last week NestlÃ© announced it will roll out its LC1 pro-biotics dairy-product range – created to aid the digestive system – nationally, after a successful trial period.
Meanwhile, Elan Waters will be launching a range of six functional water-based drinks across the Europe and the US, after a successful pilot in south-east England. The range includes one version incorporating guarana, damiana and carrot seed “to help activate the body’s natural release of energy”. It is branded by Ashley Carter Design Consultants.
At around 239m in value, the UK functional foods market is still relatively small. Across Europe it is worth around 830m. The sector has come from nowhere over the past five years and is expected to be worth 2bn by 2003, according to a recent survey by Leatherhead Food Research Association.
LFRA is a food industry organisation specialising in law, science and food markets. In its survey of nine European countries, the LFRA identified 102 functional foods and drinks. The introduction of the first comprehensive functional foods labelling code, agreed last week, looks set to expand the market beyond LFRA’s estimate (see table).
Cato Consulting managing director Emma Fric says the growing popularity of functional foods is part of a US-led move towards the integration of the health, beauty and leisure sectors.
This has seen Boots the Chemists announcing plans to set up specialist “cosmoceutical” units in 95 stores. Cosmoceutical is a US term meaning products which fall between beauty and pharmaceutical ranges.
Meanwhile, beverage giants in the US are busy adding functional – or “nutraceutical” – products to their ranges.
Starbucks is testing its Power Frappucino – a vitamin-enhanced drink containing protein and complex carbohydrates, developed as a meal replacement. Industry observers expect the chain to add a juice-based beverage-line after acquiring tea and juice manufacturer Tazo.
The US is home to the most adventurous health/leisure over-lap. Nature’s Northwest, a pilot store created by Cato Consulting in Oregon for vitamin, mineral and herb retailer General Nutrition Center, provides a glimpse of what to expect in the UK.
Launched last October, the 4000m2 store is a health and leisure complex offering a range of functional products, including groceries, cosmoceuticals, a coffee bar and a New Age music shop. US architect John Greenberg worked on the exterior.
The outlet also offers consultation on homeopathy, acupuncture and chiropody and a library on healthy lifestyles. “The complex is a multisensory experience, which combines New Age imagery with a rustic, honest, organic feel,” says Cato’s Fric.
Fric says GNC plans to roll out elements of Nature’s Northwest to its 4000-strong US chain and set up concessions in US pharmacies. It could incorporate these elements into its three London stores.
Back in the UK, NestlÃ© is about to roll out its LC1 range. The brand was launched in France in 1995 and LFRA research shows it is the most successful European functional food brand to date.
The pack claims that it “helps to maintain the body’s natural balance”.
“Functional foods are definitely an important market for us… most other manufacturers perceive it the same way,” says NestlÃ© UK head of nutritional science and communication Professor David Richards.
Richards has been working as the industrial representative for a new code of practice governing claims manufacturers can make about their functional foods.
The code was drawn up by the Food and Drink Federation, the Consumers Association and Lacob, the trade standards authority for food and drink industries.
Richards expects it to be implemented by the summer. “Until now there have been no specific laws to cover the health claims made by functional products. This is only a code of practice, but it has the backing of an entire industry,” he says.
Richards says the code will mean stricter policing of labelling laws, but it will also allow manufacturers to make bigger claims – without the need for a medical certificate – providing they can scientifically prove them.
The new labelling code means there should be plenty of branding work in this area in the next few years.
This is, however, a tricky area, as the failure of SmithKline Beecham’s Ribena Juice and Fibre around a year ago proves.
“I think the product didn’t communicate the health proposition effectively. It was also priced at around twice the price of the standard Ribena drink,” says LFRA manager of functional food working group John Young.
“It’s the latest way of adding real value to foods and brands. But there is a lot of information to communicate and it often has to be done subtly due to restrictions on what you can claim,” says David Goudge, director of The Brand Development Business. Goudge says he is currently doing functional-food branding work for a number of big clients.
“The real test is to reassure people that, despite being healthy, the food can taste nice. There is an assumption in this country that something can only be healthy if it is unpleasant,” says Goudge.
A new code of practice for functional food labelling stipulates that: a medicine can claim to prevent, cure or alleviate a disease. A food can claim to reduce the risk of disease, where there is undisputed scientific evidence to support the claim.
Code drawn up by Consumers’ Association, Food and Drink Federation and LACOB.
Key functional foods survey findings:
Key focus of functional foods: heart disease, gut health, natural defence systems and osteoporosis
34 per cent of respondents have established functional foods task forces, with a further 8 per cent planning to
The UK functional foods market is worth 239m, compared to 185m in France and 130m in Germany
Key areas of activity: dairy products (65 per cent ), fat-based spreads, bakery/cereal products, soft drinks, juice-based products
Companies at forefront of sector: NestlÃ©, Unilever, Danone, Kellogg’s, MD Foods, SmithKline Beecham, Yakult, Novartis, Nutricia, Orafti, NutraSweet/Kelco, Campina, Kraft Jacobs Suchard, Proctor & Gamble, Unigate, ICI and Ajinomoto
Source: Leatherhead Food Research
Association: The European Market for Functional Foods: Current Developments and Future Prospects.