The report, entitled Functional Foods: Opportunities and Challenges, reviews current methods and sets out recommendations which could speed up R&D, regulation and marketing of functional foods.
"The functional foods currently available represent only a fraction of the potential opportunities for consumers to manage their health through diet," said Dr Fergus Clydesdale, chair of the IFT expert panel and the report's co-author.
Clydesdale maintains that functional foods should play an integral role in public health programs aimed at reducing the risk of specific diseases, at the same time enhancing consumer control and minimizing cost.
"It is imperative to further research to validate full effectiveness and establish appropriate dietary levels," he said.
At the core of the report is a seven-step process, which it recommends manufacturers follow to ensure safety and efficacy when bringing functional foods to market.
The first step is to establish a sound scientific link between the food component and the claimed health benefit.
Next, its efficacy must be demonstrated by identifying the exact bioactive component responsible for the health benefit, its stability and bioavailability. The optimum level of intake to deliver the desired results must also be determined.
The third step involves using an objective, science-based evaluation process to show its safety at these efficacious levels.
Only then should companies embark on the fourth step - developing a suitable food vehicle for the bioactive component.
In the fifth step, the IFT advocates an evaluation of efficacy undertaken by a panel of independent scientists with appropriate expertise - an approach akin to the FDA's Generally Recognized as Safe (GRAS) determination which it suggests could be called GRAE - Generally Recognized as Efficacious.
The results of steps one to five form the basis of step six - informing consumers of the benefits of the product in adherence to guidelines on appropriate communication of accurate scientific information to consumers in a manner that is not misleading.
The expert panel takes issue with structure/function claims allowed by the FDA since it says they may lead to "misleading (if not outright false) statements of the underlying science". Instead, it recommends that labels "accurately reflect" the scientific evidence so that consumers can understand and act on the claimed product benefit.
Finally, the manufacturers should monitor consumption patterns once the product is on the market, as well as resulting health benefits and any data on adverse effects.
Euromonitor estimates that the US packaged functional foods market was worth $5.2 billion in 2004, up 8 percent on the previous year. By 2009 it expects it to reach around $6.9 billion, representing 32 percent growth over the next five years.
As for the future, the report predicts that advances in genetics could lead to tailor-made diets that suit a consumer's specific health needs. Through three new disciplines - nutrigenomics, proteomics and metabolomics - scientists have an increased understanding of the effects of nutrients at a molecular level and the variable effects of dietary components on individuals.
Functional foods already exist that claim to help reduce the risk of coronary heart disease, osteoporosis and neural tube defects. According to the IFT, a raft of other benefits may soon be available, including heightened mental alertness, increased energy and better quality sleep.