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The U.S. Market for Fortified Foods and Drinks: Expanding the Boundaries
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Apr 1, 2002
403 Pages - Pub ID: LA710724
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- Executive Summary
Scope and Methodology
- Market Parameters
- Products Fortified by Law or Custom Not Included
- Sports Nutrition, Meal Replacements, Herbal Teas Not Included
- Report Methodology
The Market
- Foods and Beverages Fortified to Enhance Nutritional Value
- Fortified Foods Cut Across Category Lines
- Three Main Product Categories
- Foods
- Beverages
- Baby Foods and Formula
- Changes in Regulation Have Positive Effect
- Fortified Foods Market Nears $18 Billion in 2001
- Table 1-1: U.S. Retail Sales of Fortified Foods Market by Category, 1997-2006 (dollars): Foods, Beverages, Baby Foods/Formula
- Foods Category Nearly Half of Retail Dollar Sales
- Figure 1-1: Share of U.S. Fortified Foods Market Retail Dollar Sales by Product Category, 1997 vs. 2001 (percent): Foods, Beverages, Baby Foods/Formula
- Supermarkets the Dominant Retail Outlet
- Factors to Market Growth
The Marketers
- Hundreds of Marketers
- Acquisitions Reshaping the Landscape
- The Health Foods Conundrum
Marketing and New Product Trends
- Marketing to Women
- Marketing as Child's Play
- Marketing to Aging Baby Boomers
- New Products Proliferate
- National Consumer Advertising Estimated at $963 Million
Distribution and Retail
- Two Main Methods of Distribution
- Small Marketers Frequently Work Through Brokers
- The Battle for Distribution
- Supermarkets and Health Foods Stores
- Drugstores Have a Natural Health Connection
- Fortified Foods Displayed Side-by-Side Unfortified Ones
The Consumer
- Product Usage Rates
- Usage of Ready-to-Eat Cereal
- Usage of Fortified Orange Juice
- Usage of Other Fruit Juices and Juice Drinks
- Enfamil vs. Similac
- The Market
Scope of Report
- Foods and Beverages Fortified to Enhance Nutritional Value
- Fortified Foods Cut Across Category Lines
- Three Main Product Categories
- Foods
- Beverages
- Baby Foods and Formula
- Products Fortified by Law or Custom Not Included
- Definitions: Enriched, Fortified, Functional, Nutraceutical, Dietary Supplements
- How Enriched Differs from Fortified
- Fortified Foods Increase Nutrients
- Definition of Functional Foods Open to Interpretation
- Nutraceuticals Meant to Enhance Health
- Dietary Supplements
- Sports Nutrition, Meal Replacements, Herbal Teas Not Included
- Focus on Products Sold Through Retail Stores
Market Background
- Brief History of Food Fortification
- Mandatory Enrichment
- Technology Advances Fortification
- Backlash Against Fortification
- Fortification Rises Again
- Changes in Regulation Have Positive Effect
Ingredients Used to Fortify Foods
- Common Fortifiers
- Vitamins and Minerals: How Much?
- Table 2-1a: Reference Daily Intake of Selected Vitamins
- Table 2-1b: Reference Daily Intake of Selected Minerals
- Vitamins = Organic Substances
- Vitamin A
- Vitamin B1 (Thiamine)
- Vitamin B2 (Riboflavin)
- Vitamin B3 (Niacin)
- Vitamin B5 (Pantothenic Acid)
- Vitamin B6 (Pyridoxine)
- Vitamin B12 (Cobalamin)
- Biotin
- Folic Acid (Folate)
- Vitamin C
- Vitamin D
- Vitamin E
- Vitamin K
- Minerals = Inorganic Elements
- Calcium
- Chromium
- Iodine
- Iron
- Magnesium
- Manganese
- Phosphorous
- Potassium
- Selenium
- Sodium
- Zinc
- Dietary Fiber
- Probiotics and Prebiotics
- Fortification with Soy
- Omega-3 Fatty Acids
- Herbals, Botanicals, and New Age Additions
- Chamomile
- Echinacea
- Ginger
- Ginkgo Biloba
- Ginseng
- Green Tea
- Guarana
- Kava Kava
- Ma Huang
- St. John's Wort
- Taurine
- The Controversy Over Hemp
The Regulatory Environment
- Regulatory Agencies
- Food Labeling Basics
- Nutrition Labeling
- RDI Replaces RDA
- Labeling's Shortfall
- Exceptions to Nutrition Labeling
- Labeling of Foods for Children Under Age 4
- Infant Formula Regulated Separately
- The U.S. WIC Program
- NLEA Allows Specific Health Claims
- The "Jelly Bean Rule"
- Example of Health Claim Requirements
- Nutrient Content Claims
- FDA Warns Marketers of "Unapproved Additives"
- Structure/Function Claims Now Allowed
- Figure 2-1: U.S. Retail Sales of Fortified Foods Market, 1997-2001 (dollars)
Market Size and Growth
- Methodology for Estimates
- Total Fortified Foods Market Nears $18 Billion in 2001
- Table 2-2: U.S. Retail Sales of Fortified Foods Market, 1997-2001 (dollars)
- Sales of Foods Category Approach $8.4 Billion
- Table 2-3: U.S. Retail Sales of Fortified Foods Category, 1997-2001 (dollars)
- Fortified Beverages Second at Over $6.9 Billion
- Table 2-4: U.S. Retail Sales of Fortified Beverages Category, 1997-2001 (dollars)
- Baby Foods and Formula Fairly Stagnant at $2.4 Billion
- Table 2-5: U.S. Retail Sales of Fortified Baby Foods and Formula Category, 1997-2001 (dollars)
Market Composition
- Foods Nearly Half of Retail Dollar Sales
- Figure 2-2: Share of U.S. Fortified Foods Market Retail Dollar Sales by Product Category, 1997 vs. 2001 (percent): Foods, Beverages, Baby Foods/Formula
- Most Popular Ingredients Used in Fortified Foods
- Sold in a Wide Range of Channels
- Supermarkets the Dominant Retail Outlet
- Figure 2-3: Share of Dollar Sales of Fortified Foods Market by Retail Channel, 2001 (percent): 6 Retail Channels, All Other Outlets
- Regional Sales Follow Population Share
- Sales Spread Out by Season
Factors to Market Growth
- All Age Groups Use Fortified Foods
- Aging Baby Boomers Focus on Fortified Foods
- Kids Another Driving Force
- Table 2-6: Projected U.S. Population by Age Bracket, 2000-2010 (number): From Age Under 5 to Age 100 and Over
- Growing Ethnic Population Shaping Sales
- Table 2-7: Population Projections for Selected U.S. Racial Populations, 2000-2020 (number): Non-Hispanic White, Non-Hispanic Black, Hispanic, Hispanic Asian-American
- Changing Eating Habits
- Looking Toward Self-Care and Alternative Health Solutions
- Linking Diet and Health
- Fortified Foods Can Supplement a Normal Diet
- Current Health Concerns
- Product Innovation and Technical Advances Help Drive Growth
- Fortification a Competitive Strategy
- FDA Regulations: Both Relaxing and Tightening Up
- Calls for Review
- Four Consumer Requirements
- Backlash to Fortified Foods: Too Much of a Good Thing?
- Targeting Markets
- New Fortified Products and Cross-Fortification
- Trends in Non-U.S. Markets
- Fortified Cereals Facing a Saturated Market
- Energy/Snack Bars Growing
- Other Markets, Including Dairy and Soy Foods, Open to Possibilities
- Fortified Products Driving Beverage Growth
- Breaking News: Drinking Orange Juice May Lower Blood Pressure
- Birth Rate, Breastfeeding Hamper Infant Formula Growth
- Baby Foods Face Competition from Adult Foods
- Figure 2-4: Projected U.S. Retail Sales of Fortified Foods Market, 2001-2006 (dollars)
Market Projections
- Sales to Approach $28.6 Billion by 2006
- Table 2-8: Projected U.S. Retail Sales of Fortified Foods Market, 2001-2006 (dollars)
- Fortified Foods Category to Near $13.0 Billion
- Table 2-9: Projected U.S. Retail Sales of Fortified Foods Category, 2001-2006 (dollars)
- Fortified Beverages Will Exceed $12.7 Billion
- Table 2-10: Projected U.S. Retail Sales of Fortified Beverages Category, 2001-2006 (dollars)
- Baby Foods and Formula to Top $2.8 Billion
- Table 2-11: Projected U.S. Retail Sales of Fortified Baby Foods and Formula Category, 2001-2006 (dollars)
- The Marketers
The Marketers
- Hundreds of Marketers
- Leaders Are Major Food or Pharmaceutical Companies
- Minor Marketers
- Most Compete in Only a Few Product Areas
- Cereal Marketers
- Marketers of Other Shelf-Stable Foods
- Juice and Juice Drink Marketers
- New Age Beverage Players
- Natural Beverage Marketers
- Dairy Products
- Soy Products and Other Milk Alternatives
- Baby Food and Infant Formula Marketers
- Recent Divestitures, Mergers, and Acquisitions
- Table 3-1: The U.S. Fortified Foods Market: Leading Marketers and Their Top Brands
The Competitive Situation
- Acquisitions Reshaping the Landscape
- Four Ways Mainstream Marketers Compete
- Developing New Products Risky
- Reformulating Existing Products and Adding Line Extensions
- Acquiring Existing Companies and Brands
- Joint Ventures Can Provide Synergies
- Major Companies Have the Edge
- The Importance of Smaller Marketers
- The Health Foods Conundrum
- Some Marketers Focus on Non-Supermarket Channels
- Fierce Competition Among Many Products
- Different Marketing Thrusts for Food vs. Pharmaceutical Companies
- Strong Private-Label Penetration for Some Product Areas
Competitive Profile: Abbott Laboratories
- $16 Billion in International Healthcare Revenues
- Ross Infant Formula Products
- Aiming to Expand to "Emerging Markets"
Competitive Profile: Cadbury Schweppes Plc
- World's Third-Largest Soft Drinks Marketer
- Mott's, Inc: Apples and More
- Revitalizing Hawaiian Punch
- The Rebirth of Snapple
- Mistic Fortifies Some of Its Drinks
- Cadbury to Acquire Nantucket Allserve
Competitive Profile: Campbell Soup Co.
- Corporate Background
- V8 Splash Makes Campbell a Leading Fortified Food Marketer
- Functional Foods and Fortified Soups Fail
- SpaghettiOs Plus Calcium
- Pepperidge Farm Expanding Bread Business
Competitive Profile: Clearly Canadian Beverage Corp.
Competitive Profile: The Coca-Cola Co.
- Corporate Background
- Moving Beyond Carbonated Soft Drinks
- Minute Maid and Other Juice Brands
- Minute Maid Fortified Juices: Not Just Orange
- First National Launch of Vitamin D-Fortified Juice
- Simply Orange: A New Alternative to Fresh-Squeezed
- Disney Deal Puts Characters on Kids' Beverage Lines
- Hi-C Is the Oldest Fortified Juice Brand
- Hi-C vs. Hawaiian Punch
- Odwalla Superpremium Juices
- Coke Relaunches Powerade
- New Initiatives in Fortified Beverages
Competitive Profile: General Mills, Inc.
- Corporate Background
- "Big G" Cereals
- Fortifying Products to Support Nutrition Claims
- New Cereal Formats
- Harmony, Aimed at Women
- Yoplait and Columbo Yogurts
- Teaming Up with DuPont for 8th Continent
Competitive Profile: The Hain Celestial Group
- Corporate Background
- Fortified Food Initiatives
Competitive Profile: H.J. Heinz Co.
- Corporate Background
- More Than Sauces
- Heinz No. 2 in Baby Foods
- Few Fortified Foods Initiatives
- Heinz and Hain
Competitive Profile: Interstate Bakeries Corp.
- Corporate Background
- Wonder Bread Builds Strong Bodies
- FTC Files Suit Against Wonder Bread Over Health Claims
- Direct Store Distribution
Competitive Profile: Kellogg Co.
- Corporate Background
- The Trouble with Cereal
- Differentiating Cereals on Value
- Reformulating to Add Fortification
- Kellogg Acquires Kashi, Launches Heart-Healthy Cereal
- European Initiative
- The Ensemble Failure
- Krave Energy Bars
- New Nutri-Grain Products
- Taking Advantage of Keebler's DSD System
Competitive Profile: Kraft Foods, Inc.
- Corporate Background
- Fortification Mostly by Default
- Little Fortification for Post Cereals
- Taste of Life Salad Dressings
- Kraft Acquires Balance Bar
Competitive Profile: Land O'Lakes, Inc.
- Corporate Background
- Growth in a Consolidating Industry
- Increasing its Branded Position
- Fortification Helps Add Value
Competitive Profile: Mead Johnson Nutritionals
(Bristol-Myers Squibb Co.)
- Corporate Background
- The Enfamil Family of Products
- Attempt to Branch into Baby Foods Fails
- Marketing to Health Professionals and Parents
- Mead Johnson Sells Viactiv
Competitive Profile: Nantucket Allserve, Inc.
- Two "Juice Guys" Succeed with Carefree Lack of Professionalism
- On the Fortification Bandwagon
- Ocean Spray Buys and Sells
Competitive Profile: Nestlé S.A.
- Corporate Background
- Nesquik Reformulated with Added Calcium, Vitamins, and Minerals
- Carnation Infant Formulas
- Nestlé Beverages, Ocean Spray Form Strategic Alliance
Competitive Profile: Novartis AG
- Corporate Background
- Gerber Products Co.
- Novartis Teams Up with Quaker
- Aviva European Functional Foods Venture Pulled
Competitive Profile: Ocean Spray Cranberries, Inc.
- Corporate Background
- Moving Beyond Cranberries
- Tiny Competitor, Northland, Challenges Ocean Spray
- Focus on Fortification to Stem Sales Decline
- The Great White Hope
- On a New Products Roll
- Ocean Spray and Nestlé Announce Strategic Alliance
- Scientifically Backed Research
Competitive Profile: PepsiCo, Inc.
- Corporate Background
- Tropicana Acquisition Puts PepsiCo in the Juice Business
- Initiatives in Fortified Juice
- PepsiCo Buys Majority Stake in SoBe
- PepsiCo Acquires Quaker Oats, Gatorade
- Gatorade Leads in Sports Drinks
- Quaker's Fortified Cereals and More
- Quaker/Novartis Joint Venture Scrapped
- Pepsi Testing the Waters
- Amp Energy Drinks
- SoBe Mr. Green
Competitive Profile: Procter & Gamble Co.
- Corporate Background
- A Pioneer of Modern Marketing Techniques
- P&G Sells Hawaiian Punch, Retains Sunny Delight
- Sunny Delight Labeling Criticized
- P&G Patents FruitCal Calcium Delivery System
- P&G Testing Cutting-Edge Functional Beverages
- Deal with Coke Falls Through
- Nutristar, for Developing Nations
- Marketing and New Product Trends
Marketing Trends
- Positioning Health Benefits
- Marketing to Women
- Marketing as Child's Play
- Marketing to Aging Baby Boomers
- Packaging Trends
- Labeling Is Part Regulation and Part Marketing
New Product Trends
- New Products Continue to Proliferate
- Perception of Appropriate Added Ingredients
- Calcium and Antioxidants
- Marketers Bundling Vitamins
- Folic Acid to Prevent Birth Defects
- Soy Gaining the Spotlight
- Probiotics and Prebiotics on the Cutting Edge
- Cholesterol-Lowering Foods Are More Like Medicines
- Jury Still Out on Herbal Fortifiers
- Product Trends by Category: Foods
- Adult-Targeted Cereals
- Child-Targeted Cereals
- Yogurt
- Cheese and Margarine
- Other Foods
- Product Trends by Category: Beverages
- Juices and Juice Drinks
- Kid-Targeted Beverages
- New Age Beverages
- Vitamin-Enhanced Waters and Sports Drinks
- Milk and Milk-Based Drinks
- Soy Beverages
- Smoothies
- Powdered Drink Mixes
- Tea Bags
- Product Trends by Category: Baby Foods and Formula
- Baby Foods
- Infant Formula
- Selected New Product Introductions
- Table 4-1: The U.S. Fortified Foods Market: Selected New Product Introductions, 2000-January 2002
Consumer Advertising and Promotions
- National Consumer Advertising Estimated at $963 Million
- Cereal and Beverage Giants the Top Advertisers
- Advertising Placement
- Much Advertising Is Linked to Promotion
- Website Alternatives or Supplements to Traditional Media
- Advertising Focuses on Nutrition, Health Benefits, and Taste
- Unstated Health Benefits
- Some Ads Focus on Packaging
- Taking Charge of One's Health
- Taking Care of Others
- Family Focus
- Direct Competitive Positioning
- New Age Beverages Trade on Their Image
- Consumer Promotions Are Large and Elaborate
- Coupons Draw Attention
- Joint Promotions Team Products
- Sweepstakes Tie In with Activities or Entertainment
- Free Gifts and Merchandise Offers
- Charitable Contribution and Good Works
- Examples of Consumer Advertising and Promotions
Trade Advertising and Promotions
- Trade Advertising
- Trade Promotions
- Co-Op Offers
- Distribution and Retail
Distribution
- Two Main Methods of Distribution
- Warehousing vs. Direct Store Delivery
- Advantages of Warehouse Distribution
- Disadvantages of Warehouse Delivery
- Advantages of Direct Store Delivery
- Disadvantages of Direct Store Delivery
- Small Marketers Frequently Work Through Brokers
- Distributor Networks Serve Different Classes of Trade
- Distributor Margins
- Distributor Networks Motivate Marketer Alliances and Acquisitions
- The Battle for Distribution
Retailers
- Where Fortified Foods Are Sold
- Supermarkets the Leading Outlet
- Convenience Stores Strong in Beverages
- Natural Foods Stores Selection Limited Except for Beverages
- Limited Selections in Warehouse Clubs
- Mass Merchandisers Expanding Food Selections
- Drugstores Have a Natural Health Connection
At the Retail Level
- Fortified Foods Displayed Side-by-Side Unfortified Ones
- Most Fortified Food Line Extensions Priced at Parity
- The Cost of Slotting Fees
- Checkstand Potential
- The Consumer
Consumer Overview
- The Simmons Survey System
- Simmons Data on Fortified Foods
- Product Usage Rates
- Table 6-1: Consumer Overview for Fortified Foods, Spring 2001 (percent): 54 Classifications
Consumer Focus: Fortified Cold Cereals
- Ready-to-Eat Cereal Users
- Ready-to-Eat Cereal Use by Brand
- Ready-to-Eat Cereal Users
- Table 6-2: Demographic Characteristics Favoring Use of Cold Cereals: Cheerios vs. Honey Nut Cheerios, Spring 2001 (U.S. Adults)
- Table 6-3: Demographic Characteristics Favoring Use of Cold Cereals: Kellogg's Corn Flakes vs. Kellogg's Frosted Flakes, Spring 2001 (U.S. Adults)
- Table 6-4: Demographic Characteristics Favoring Use of Cold Cereals: Kellogg's Raisin Bran vs. Post Raisin Bran, Spring 2001 (U.S. Adults)
- Table 6-5: Demographic Characteristics Favoring Use of Cold Cereals: Kellogg's Froot Loops vs. Cap 'n Crunch, Spring 2001 (U.S. Adults)
- Table 6-6: Demographic Characteristics Favoring Use of Cold Cereals: Kellogg's Frosted Mini Wheats vs. Kellogg's Rice Krispies, Spring 2001 (U.S. Adults)
- Table 6-7: Demographic Characteristics Favoring Use of Cold Cereals: Cinnamon Toast Crunch vs. Lucky Charms, Spring 2001 (U.S. Adults)
- Table 6-8: Demographic Characteristics Favoring Use of Cold Cereals: Kellogg's Corn Pops vs. Cocoa Puffs, Spring 2001 (U.S. Adults)
- Table 6-9: Demographic Characteristics Favoring Use of Cold Cereals: Kellogg's Apple Jacks vs. Post Honeycomb, Spring 2001 (U.S. Adults)
- Table 6-10: Demographic Characteristics Favoring Use of Cold Cereals: Kellogg's Special K vs. Total Corn Flakes, Spring 2001 (U.S. Adults)
- Table 6-11: Demographic Characteristics Favoring Use of Cold Cereals: Basic 4, Spring 2001 (U.S. Adults)
- Table 6-12: Demographic Characteristics Favoring Use of Cold Cereals: Corn Chex vs. Golden Grahams, Spring 2001 (U.S. Adults)
- Table 6-13: Demographic Characteristics Favoring Use of Cold Cereals: Wheaties vs. Life, Spring 2001 (U.S. Adults)
- Table 6-14: Demographic Characteristics Favoring Use of Cold Cereals: Kix vs. Trix, Spring 2001 (U.S. Adults)
Consumer Focus: Energy Bars
- Energy Bars
- Energy Bar Use by Brand
- Table 6-15: Demographic Characteristics Favoring Use of Energy Bars: Quaker Oats Chewy Granola Bars vs. Kellogg's Nutri-Grain, Spring 2001 (U.S. Adults)
- Table 6-16: Demographic Characteristics Favoring Use of Energy Bars: PowerBar vs. Balance Bar, Spring 2001 (U.S. Adults)
Consumer Focus: Fortified Beverages
- Orange Juice Users
- Fortified vs. Non-Fortified Orange Juice Users
- Few Discernible Patterns Among O.J. Users
- Users of Other Fruit Juices and Juice Drinks
- The Minority Skew
- The Child-Targeted Skew: Examples and Exceptions
- Downscale Slant to Most Other Fruit Juices/Juice Blends
- V8 Vegetable Juice Users
- Table 6-17: Demographic Characteristics Favoring Use of Orange Juice, Spring 2001 (U.S. Adults)
- Table 6-18: Demographic Characteristics Favoring Use of Orange Juice: Tropicana Pure Premium Original vs. Minute Maid Premium Regular, Spring 2001 (U.S. Adults)
- Table 6-19: Demographic Characteristics Favoring Use of Orange Juice: Minute Maid Premium With Calcium vs. Tropicana Pure Premium With Calcium, Spring 2001 (U.S. Adults)
- Table 6-20: Demographic Characteristics Favoring Use of Orange Juice: Tropicana Pure Premium Orange Tangerine (calcium-fortified) vs. Tropicana Season's Best with Calcium, Spring 2001 (U.S. Adults)
- Table 6-21: Demographic Characteristics Favoring Use of Orange Juice: Tropicana Pure Premium Plus Vitamins, Spring 2001 (U.S. Adults)
- Table 6-22: Demographic Characteristics Favoring Use of Other Fruit Juices/Drinks: Welch's vs. Minute Maid, Spring 2001 (U.S. Adults)
- Table 6-23: Demographic Characteristics Favoring Use of Other Fruit Juices/Drinks: Sunny Delight vs. Hawaiian Punch, Spring 2001 (U.S. Adults)
- Table 6-24: Demographic Characteristics Favoring Use of Other Fruit Juices/Drinks: Ocean Spray Cranberry Juice Cocktail vs. Ocean Spray Cranberry Juice Blends, Spring 2001 (U.S. Adults)
- Table 6-25: Demographic Characteristics Favoring Use of Other Fruit Juices/Drinks: Hi-C vs. Juicy Juice, Spring 2001 (U.S. Adults)
- Table 6-26: Demographic Characteristics Favoring Use of Other Fruit Juices/Drinks: Mott's vs. Snapple, Spring 2001 (U.S. Adults)
- Table 6-27: Demographic Characteristics Favoring Use of Vegetable Juice: Campbell's V8, Spring 2001 (U.S. Adults)
Consumer Focus: Infant Formula
- Enfamil vs. Similac
- Table 6-28: Demographic Characteristics Favoring Use of Infant Formula: Enfamil vs. Similac, Spring 2001 (U.S. Adults)
Attitudes Toward Health and Nutrition
- "Shopping for Health" Report
- 78% Use Fortified Foods
- Labels Important in Decision-Making Process
- Prime Health Concerns
- Calcium and Vitamin C Claims
- HealthFocus Consumer Surveys
- Food as Medicine
- Foods for "Wellness"
Appendix I: examples of consumer advertising and promotions
Appendix II: addresses of selected marketers
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