Presenting a convenient alternative to traditional supplements, functional food manufacturers continue to innovate offerings in key categories.
According to the American Dietetic Association (ADA), functional foods are enhanced or enriched to offer health benefits as part of a healthy balanced diet. Functional foods generally demonstrate physiological benefits for consumers, and they are bioactive in that they are not only nutritious, but also reduce the risk of disease.
The world market for functional foods and drinks is expected to reach $130 billion by 2015, according to research from Global Industry Analysts, with the United States, European Union (E.U.) and Japan as the leading regional markets in the global functional food and drinks industry. And product innovation and increasingly health-conscious consumers with higher disposable incomes are fuelling market growth.
With heart disease and other chronic illnesses affecting an ever-expanding percentage of the population, consumers are more aware of health issues and preventative measures they can take to lessen their chances of falling ill. Functional foods are particularly popular for their heart-health benefits, with cholesterol- lowering products topping shopping lists. Additionally, snack foods containing antioxidants and energyboosting ingredients are performing well in markets across the E.U., North America and Southeast Asia, according to Global Industry Analysts.
There are several factors driving the development of functional foods, but the key ones boil down to consumer interest and convenience.
“Depletion of nutrition in naturalgrown whole foods, inaccessibility to wholefood nutrition and the fast pace of today’s world has driven consumers to seek out quick and easy alternatives, like supplements and bars, to help them get the nutrients they need,” said Carol Castelli, director of marketing with California-based Amazing Grass.
“If you can get your dietary supplements from the foods you normally eat, it saves time and is more convenient. These are the qualities that have driven product improvements and innovations since time began,” added Bob Green, president of New Jersey-based Nutratech, Inc. “We started seeing functional foods and beverages creep onto the scene about 20 years ago. But they’ve really been coming on strong for the last decade.”
Functional foods may not be a new term, but it has evolved in its profile and status over the years.
Weight & Sports Nutrition
Green expressed that functional foods offer unique solutions to particular populations that want to know there’s a function to the foods they eat.
“For example, Millennials (people age 30 and under) are coming of age in a world in which healthy diet and exercise are a part of everyday life. This generation is known for its short attention span and the fact that they want the products they buy to do a lot with little effort on their part,” he said.
Meanwhile, Baby Boomers, who have driven every significant cultural and marketing trend for almost 60 years, are forcing natural products marketers back to the drawing board to rethink ways to reach graying customers, Green explained. “They want their foods and beverages to address the issues they’re currently facing, like slowing metabolism, weight gain and loss of muscle tone—all of which are underlying risk factors for other health issues, from high blood pressure and diabetes to sleep disorders and osteoarthritis.”
Nutratech introduced its thermogenic ingredient Advantra Z, a patented bitter orange extract, in 1996. Green pointed out that products that feature the ingredient on the label draw both of these consumers. “Ingredients like Advantra Z that increase energy and help manage weight are a natural fit in functional foods for the Millenial demographic,” he said. “Boomers also know that many of the health conditions they’re concerned about are avoidable through preventative measures. So there’s little doubt that this generation will demand functional ingredients like [ours], which increase metabolism, support weight loss, increase energy and build lean muscle in their foods and beverages.”
Twenty years ago, Advantra Z was developed specifically for use in functional foods and beverages. But Green has observed that interest is now gaining considerable momentum as the functional foods and beverages category grows.
“With functional foods and beverages, there are of course taste issues that aren’t a concern with dietary supplements. And with many functional foods and beverages, there’s a need for miscibility and water solubility in order to properly mix in the ingredient. With Advantra Z, we continue to address and refine these qualities,” said Green.
More than a decade ago, the first product to hit the market featuring AdvantraZ was SpeedStack by ABB Performance. Today, the company also uses the ingredient in other ready-to-drink beverages: Adrenalyn Stack, Ripped Force and SpeedShot.
The most recent product introduction is Stim-Force Chewables from Labrada Nutrition. “It may be the first pre-workout supplement that comes in a fruit-flavored chew rather than a powdered drink mix,” said Green.
Type 2 diabetes is a growing concern in the United States, as well as around the world, with more than 25 million suffering from the disease in the U.S. and another 50 million considered pre-diabetic. Bob Serulla and his partners at Michigan-based INBalance Health Corporation launched their first line of products at Natural Products Expo East 2012 with the goal of providing a muchneeded alternative to this large market.
“Currently, there aren’t a lot of options for type 2 diabetics when it comes to food and drink items, at least all-natural foods with no preservatives, additives or chemicals,” said CEO Serulla.
INBalance started with food bars, and currently offers four flavors (Chocolate Fudge, Strawberry Banana, Chocolate Mint and Cherry Chocolate). All of the bars are 100 percent natural, but they also include Morucel, and trademark ingredient formulated from mulberry extract. “This is a known inhibitor for sugar spiking. So even with 10 g of protein and 10 g of fiber, we only have 4 g of sugar, and all of the sugar comes from the natural flavors and monk fruit extract,” explained Don Verhulst, MD, vice president. “Because these bars were formulated for diabetics, we found out quickly that they also cater to allergen- and glutenfree [shoppers] as well as vegans. The bars expanded into a larger audience than expected.”
Shortly after the launch, the company introduced three out of seven supplements, again formulated specifically for type 2 diabetics: INSupport Weight Management, INSupport Multi-Vitamin and INSupport Glucose Management products. The INSupport Glucose Management product also has the mulberry leaf extract as its main ingredient and has been shown that when taken before meals will help stabilize sugar spikes, according to Verhulst. “Further, it has been proven that sugar spikes, though serious for type 2 diabetics, can cause heart disease as these spikes cause the heart to over exert itself.”
INBalance is planning two more flavors of its bars by the end of this year, in addition to several other supplements to cover circulation, nerve and vision health—all issues related to type 2 diabetics. “Additionally, we are looking at cereal products, drinks and other food items to be introduced within the next 12 months,” said Serulla.
Activia advertisements may have made probiotics a household name, but Utah-based Probiotix Foods, maker of Active D’Lites, offers consumers the sweetest possible way to get their healthy bacteria.
“Chocolate is one of the single largest consumed products on the planet, and we have the most functional chocolate on the planet,” said Founder Gerry Morrison.
Active D’Lites were specifically formulated to go beyond the benefits of a sugar-free and lowcarb treat. The company has exclusivity for DuPont’s Howaru Restore probiotic strain in sugarfree chocolates, which are naturally sweetened with stevia. Available in five flavors including Chocolate Caramel, Chocolate Almond, Chocolate Peanut Butter, Chocolate Crisp and Chocolate, each bar delivers 7 g of fiber with just 100 calories and contains both prebiotics and probiotics— a symbiotic combination to promote and sustain digestive health. But the company only markets the probiotic function because consumers understand it better, according to Morrison.
“This took years of R&D and we are functional for many reasons. The product is low cal, low carb, stevia sweetened, no sugar added, an excellent source of fiber and, most important, it tastes great,” he said, noting that its suggested that retailers can merchandise the product in three in-store locations: digestive sets, diet sets and [blood sugar] sets.”
Beyond having multiple placement opportunities, Probiotix takes retailers’ needs and concerns into consideration. Not only does it offer shelfsaving vertical boxes and wrappers, but also the packaging itself was thoughtfully crafted to help educate consumers. Further, the company is in the process of doing a major social media campaign that “will involve bloggers and social media specialists to help speak with the brand directly to those looking for and talking about our specific functional highlights,” said Morrison.
Amazing Grass’ Castelli has observed that it has become extremely difficult for consumers to eat enough fruits, vegetables, proteins and other whole foods needed to get the recommended levels of vitamins and minerals, so they are seeking out convenient alternatives. “More than ever consumers are choosing functional foods and supplements to help them achieve optimal nutrition thanks to advancements in product efficacy and convenience,” she said, adding that those with vegan lifestyles can too often miss out on essential proteins and various B vitamins.
To that end, Amazing Grass products enable consumers to supplement a healthy diet with powerful, easy-to-consume, delicious beverage powders and bars. For example, its Amazing Meal is a line of USDA-certified three-in-one dietary supplements that contain a blend of organic plantbased proteins, antioxidant fruits and phytonutrient vegetables, creating a 100 percent wholefood nutrition mix in each scoop. “It is available in five great flavors consumers love,” said Castelli. “And we just added Café Mocha to our Amazing Meal line, which offers a healthy mix of organic green superfoods, 10 g of complete, plant-based protein, the tasty combination of chocolate and coffee, and natural caffeine equal to a cup of coffee.”
The company also introduced a new flavor to its Green SuperFood line, Pineapple Lemongrass, which contains a synergistic blend of 15 vitamins and minerals with concentrated coconut water, and packed with alkalizing greens and antioxidant-rich fruits.
“We are finding that consumers are looking for flavor, function, protein and convenience when it comes to plantbased nutrition. As a company that focuses on offering the best of these attributes, we pride ourselves on being able to offer a variety of ways for consumers to get their daily greens in an easier and tastier version than ever before,” said Castelli. “We’re making it easier than ever to make sure optimum nutrition is achievable anytime, anywhere.”
Aside from offering a convenient way for consumers to get the nutrients they so desperately need, functional foods offer a key advantage to retailers: taste tests. According to Lowell Johannsen, vice president of INBalance Health Corporation, it’s proven the best sales tool for the company’s bars. “The expression on people’s faces after trying our bar is sheer surprise and enjoyment. They typically are expecting the dull-tasting bars they are used to. We have found that when retailers perform in-store demos, the products get sold quickly,” he said.
Amazing Grass also knows that being able to offer shoppers a taste of its products goes a long way toward retailers making a sale, so the company’s “green team” works on the retail floor demoing the product and educating the consumer. But its most fun in-store experience is its SuperFood Spot, according to Castelli. “It is an organically made nine-foot by 15-foot store within a store. For a short period of time our green team mixes up some amazing drinks, shares recipes and offers great information on plant-based nutrition. It’s a festive time with our blenders going, music playing and people enjoying delicious yet convenient nutrition.”
But if taste isn’t enough, INBalance offers ample support materials for retailers to use in stores, or to send home with customers. The company currently offers three brochures—one for the bars, which outlines the function and ingredients, as well as a bar comparison on the back of the brochure for all of the other bars on the market today, Johannsen explained. It also has a brochure for the supplements, again outlining the function and ingredients. The final brochure is called the Ideal Body System, which incorporates the bars and supplements as well as living a healthy lifestyle. Further, the company will be launching a book at this year’s Expo East specific to type 2 diabetics.
“Additionally, Dr. Don [Verhulst] provides a weekly blog on our website, which also has a number a videos of him talking about the various aspects of type 2 diabetes,” Johannsen added.
And having open access to information is an important part of the equation, whether a shopper is looking for a functional food or a dietary supplement, according to Nutratech’s Green, whose company maintains all of the pertinent research on Advantra Z and bitter orange on its website (www.nutratechinc. com/advz/advz.php?p=2).
“With a branded ingredient like Advantra Z, having this information accessible to consumers is essential since Advantra Z is featured in the supplement fact box and often on the product’s label. We want to make sure anyone can read it and feel confident in Advantra Z’s safety and efficacy,” said Green. “Consumers who want functional foods and beverages definitely expect efficacy and safety. That’s the whole point of a functional food: to do more.”
A Retailer’s Perspective
For 20 years, Betsy’s Health Foods Store has been serving the Houston, TX area with a single store, but it has plans to widen its reach, opening a second location by the end of 2013. With 999 square feet, this supplement-focused store carries a surprising variety of products, according to Marketing Manager Ramona Billingslea, who noted that products are broken into nearly 50 categories for buying and training purposes.
She views functional foods as items people eat as opposed to taking a pill; items that people see as something they can consume that has additional benefits than just calories or their basic vitamins and minerals. “Some items that I consider functional foods, like aloe vera drinks, Bragg’s Apple Cider Vinegar, goat yogurt, protein powders and flax meal, we have been carrying since our store first opened,” said Billingslea. “In the last six years or so, ever since the mangosteen explosion, we have seen this category of product offerings grow. As customer demand grew, along with product offerings, we were able to bring in more of these exciting products.”
Customers who purchase functional foods at Betsy’s are looking for a wide variety of benefits and supports, including heart health, energy, digestion, blood sugar management, normal cholesterol support, breast health (flax), anti-aging, weight management and even alkalizing support, Billingslea explained. “Based on what we carry, like flax meal, chia, coconut oil, açai berries, goji berries, greens and protein powders, most of our customers’ interest in functional foods is more along the lines of something to add to smoothies or juices. Our food bars are of interest as finished products, and we do carry the gluten-free and higher-fiber breads that are finished products.”
Since Betsy’s is a supplement store first and foremost, functional foods are considered a complement, and placement is important. The products are spread throughout the store, along with the supplements, but Betsy’s also has several functional food items placed in its small food section. “The functional foods placed with supplements tend to have a fairly strong reputation for supporting similar areas as the supplements they sit beside,” said Billingslea.
Some of the top functional food sellers at Betsy’s are:
• Nature’s Way Coconut Oil—“This popular food from a company with high standards has a wide variety of uses for our customers, from cooking and eating straight to using as a moisturizer on skin and hair,” said Billingslea.
• Bob’s Red Mill Organic Flax—“This is a clean, reliable product that is popular for many of our customers because breast health is a very high concern in our area,” she said.
• Trace Minerals Mangosteen— “Customers like the flavor, the cleanness of the product and the many potential benefits that mangosteen provides.”
• Betsy’s Basics (store brand) Super Greens—“This powder from our private label has a good flavor, provides the kind of greens mix people are looking for and also works well in smoothies and juices for our customers.”
• Country Life’s Real Food Inner Filet 100% Aloe Vera—“This is also popular because it is an aloe vera people can drink every day to get the polysaccharide and other benefits of aloe without the laxative effect of the whole leaf.”
• Bragg Apple Cider Vinegar—“This is popular wherever it is sold because it has cornered the market on a product that has been popular for more than 50 years for a variety of reasons.”
“Mostly, the products that are popular in our store sell well because they are the ones we walk to when customers express needs that functional foods will best fit,” Billingslea explained. “We often find ourselves walking to products in this category for the growing number of people who are tired of swallowing pills and turning more to juices and powders.”