Dairy, bakery, beverages dominate functional foods
In 2009 figures, dairy accounted for $8.702bn globally, bakery $5.18bn excluding Japan, and beverages $2.825bn not including energy and mood drinks.
The UK-based organisation said the US and Europe will drive growth in the market from $22.923bn in 2009 to $27.126bn in 2015 - an 18.3 per cent growth rate – but warned health claim regulations in the EU and elsewhere could severely crimp market development.
It did not include sales of mood/energy products in the figures, despite registering their popularity, trend-wise.
Credibility is key
“The future of functional foods depends on a few key points,” Leatherhead observed. “Health claim regulations in Europe are currently under scrutiny and the future of other global regulations will shape the health claims permitted on packaging.”
“Credibility is key. Regulations are likely to become stricter and only health claims with strong scientific backing will be permitted for use or can be endorsed. Consumers are also becoming savvier to the concept of ‘scientifically proven’.”
Of the other countries in its survey, Japan was predicted to record slower growth because its market was older but it remained the biggest functional foods economy with 39.2 per cent of the total market followed by the US (31.1 per cent), the five European countries (28.1 per cent) and Australia (1.6 per cent).
European market analysis
The five European markets - the UK, Spain, Italy, France and Germany – would grow from $5.058bn in 2009 to $6.454 in 2015 – an increase of 27.6 per cent over the time span.
The UK has become the largest market for functional foods, having overtaken France in recent years. Leatherhead put this down to strong activity in functional dairy and yellow fats as well as “significant initiatives” in breakfast cereals and beverages. France remains the second biggest market followed by Germany, Spain and Italy, “a distant fifth”.
Leatherhead points out that active health drinks dominate the European market, along with functional yoghurts (showing “dynamic growth”) and functional milks. Dairy products account for almost 70 per cent of functional food sales in the five countries.
Popular brands include Danone Activia and Actimel spoonable and drinking yoghurts, Benecol spreads and dairy products, Burgen bread, Danone Danacol, So Good soy milk and Tropicana Essentials fortified juice.
Japan
The Japanese market is characterised by a longer association between food and health made by Japanese consumers. This is backed by the Foods for Specified Health Use (FOSHU) regulation which controls how health claims are made about functional foods. While the system was slow to take off, it has fostered a market worth almost $9bn.
Healthy non-FOSHU products rely on consumer knowledge and implied claims and when added to the mix contribute to a market worth closer to $25bn.
“In general, the use of functional ingredients is widespread in Japan, with probiotics, vitamins, calcium, and oligosaccharides regarded as almost standard in some sectors of the market.”
Australia
Leatherhead defined the Australian market as “relatively undeveloped, despite ongoing new product acitivity”. Australia’s population of a little over 20m was also cited as a factor.
But it said the country had health R&D activity going on in probiotics, drinks, bread and cereals. Glycaemic Index claims are popular.
