Functional, Fortified and Inherently Healthy Foods and Beverages in the U.S., 4th Edition

May 1, 2009
233 Pages - Pub ID: LA1939944
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Functional foods—defined here as food and beverage products that offer a distinct health advantage beyond basic nutrition by including specific ingredients whose therapeutic benefits provide a primary market positioning—continue as a key food industry driver due to greatly ramped up product development and marketing. Although the economic recession may prohibit some consumers from purchasing higher-priced specialty items, functional foods can actually save consumers money in the short term by pumping up basic food items with ingredients shoppers would otherwise have to get in the form of more expensive nutritional supplements. Additionally, whereas in the past consumers were primarily reactive, trying to treat health problems after they arise, today they are more proactive, focusing on overall “wellness” and turning grocery aisles into hunting grounds for healthful, functional foods to prevent illness and chronic conditions.

This fully updated fourth-edition Packaged Facts report examines the U.S. market for functional foods and beverages from all angles while providing insight into key international markets, identifying global trends in new product introductions by geographic region and company and exploring developing markets poised for growth. For the U.S. market, it presents retail sales breakouts of food and beverage categories with a strong functional tilt, from yogurt to food/snack bars to cranberry juice; examines market drivers and trends; and maps out the overall competitive situation. Trends in new product introductions are examined in depth, based on data from Datamonitor’s Product Launch Analytics, as are trends in functional ingredients and condition-specific product thrusts. The report also profiles major marketers, including Groupe Danone, Kellogg Co., Kraft Foods, Nestlé SA, PepsiCo and Nature’s Path Organic.

An exclusive feature of Functional, Fortified and Inherently Healthy Foods and Beverages in the U.S., 4th Edition is custom survey data from Packaged Facts’ February 2009 online poll of 2,600 U.S. adults, which was conducted to measure purchasing patterns, attitudes and demographics specific to functional foods and beverages. Drilling down to the marketer and brand level, the analysis also relies on consumer survey data from Experian Simmons’ Fall 2008 National Consumer Study, and on Information Resources, Inc. InfoScan Review data charting product sales in mass-market channels.

Read an excerpt from this report below.

About the Author

Marigny Research Group, Inc. (MRG) is a producer of customized private-label market research reports, offering services including title development, research, market analysis, writing, editing, proofreading, desktop production, and marketing support, with a network of market research professionals that extends across the United States. Since 1986 MRG has authored more than 200 reports published under the Packaged Facts imprint, covering consumer packaged goods, demographic, retail, and financial markets. Within these and other areas, MRG has developed complete report lines, most recently focusing on the burgeoning market for pet products and services.

Additional Information

Market Insights: A Selection From The Report

Packaged Facts Survey Confirms High Consumer Interest in Functional Foods

Packaged Facts’ February 2009 online poll of 2,600 adults confirms the high level of consumer interest in the special nutritional features of food and beverage products even in the midst of an economic downturn. Among the poll respondents, when prompted with mention of specific product types, 83% indicated that they had purchased beverage products within the last 12 months specifically for their distinctive nutritional benefits, with orange juice (49%), cranberry juice/juice blend (45%), and green tea beverages (42%) leading the pack by this measure. [Table 4-9]

Ramping Up Research & Development

Another catalyst for the functional foods movement involves the aggressive R&D activities of major packaged foods marketers, who see the development of products at the intersection of food and pharmaceuticals as a key avenue to future growth, since prices on nutritionally enhanced foods can be 40% higher than run-of-the-mill versions, and proprietary products shield from private-label copycats. Marketers such as Nestlé, Mars and Kraft have invested in health and nutritional units specifically set up to investigate opportunities for more healthy food offerings. Group Danone has gone so far as to completely restructure its corporate profile around health, and its R&D model reflects that focus, with the company employing over 100 health and nutrition professionals around the world, and with 80% of the company’s research devoted to health and nutrition projects.

Part of the impetus, too, is coming from ingredients manufacturers that are developing new products for this market, catering to the many people who prefer to consume nutrients in their foods and beverages rather than tablets or capsules. Until recently, taste, texture and solubility issues limited the number of ingredients that could be added to foods and beverages, but advances in ingredient science are rapidly expanding the possibilities. For instance, the “fishy” taste of omega-3 fatty acids has limited its use in functional food products, but recent advances have increased its applications to a variety of products. Ingredients manufacturers are investigating new opportunities for functional ingredients to stay one step ahead of the market, and products that can be added to just about anything without compromising taste or texture are functional gold for marketers. Cargill’s new heart-healthy barley fiber ingredient, Barliv, is one such product, which the company touts as the “next big thing in functional foods” (Associated Press, March 17, 2009). Bolthouse Farms will be the first company releasing a product, a pear-merlot juice blend, containing Barliv.

In the News

Functional Foods Market Thrives as Consumers Take Proactive Approach to Health

New York, May 13, 2009 - Grocery stores have become hunting grounds for healthful, functional foods and beverages that offer distinct wellness advantages beyond basic nutrition. Consumers are more proactive about their health, and spurred the U.S. retail market for functional foods and beverages to a 6% gain with sales totaling almost $31 billion in 2008, according to market research publisher Packaged Facts in the brand-new report, Functional Foods and Beverages in the U.S., 4th Edition. The market reached $29 billion in 2007.

“Consumers are reevaluating their health, nutrition, and lifestyle choices adopted years ago. This reevaluation includes considering the role functional foods and beverages could or should play in diets in order to avoid or help treat all kinds of health conditions,” says Tatjana Meerman, publisher of Packaged Facts. “This new, proactive approach is fundamentally different from the reactive tendencies of consumers in the past who only treated health problems after they arose.”

During the five-year period from 2003 to 2008, several functionally oriented food and beverage categories performed well, including yogurt, energy drinks, nutritional snacks and trail mixes, milk substitutes and soymilk, and refrigerated blended fruit drinks, among others. Packaged Facts projects that total U.S. retail sales of functional foods and beverages will continue to grow at a steady pace through 2013, and reach approximately $43 billion.

Though the market has not proven to be recession proof, it has advantages that could prevent it from being as vulnerable as most other markets. Namely, in the short term functional products may save consumers money since these foods and beverages carry nutrients that shoppers would otherwise seek in expensive nutritional supplements. While in the long run, functional products save consumers money on medical expenses by helping to prevent illness and chronic conditions.

Functional Foods and Beverages in the U.S., 4th Edition examines the U.S. market for functional foods and beverages from all angles. It provides insight into key international markets, identifies global trends in new product introductions by geographic region and company, explores developing markets poised for growth, and profiles major marketers. An exclusive feature of the report is custom survey data from Packaged Facts’ February 2009 online poll of 2,600 U.S. adults, which was conducted to measure purchasing patterns, attitudes, and demographics specific to functional foods and beverages.

About Packaged Facts - Packaged Facts, a division of Market Research Group, publishes market intelligence on a wide range of consumer industries, including consumer goods and retailing, foods and beverages, demographics, pet, and financial products. Packaged Facts also offers a full range of custom research services.


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