Mintel: How to drive innovation in functional foods

With health and wellness top of mind for many Americans, the functional foods market is thriving. Even as the economy impacts people’s shopping habits, functional food sales continue to see year-over-year increases, rising 46 percent since 2004. The market should reach $6.3bn by the end of 2009.

Functional foods have benefited from quick adoption by consumers. In May 2009, three in five adults (60 percent) said they purchased both functional food and functional drinks in the past three months, up from 34 percent in 2006.

However, although consumers are quickly adopting functional foods, many aren’t using them very frequently. In fact, nearly half of functional food purchasers said they ate such foods 10 times a month or less, or about once every three days.

To maintain growth in the market, manufacturers will need to simultaneously appeal to new customers while expanding the usage of current fans.

Keeping it fresh​

Abundant new product activity has helped keep the functional food market fresh. In 2008, nearly 551 functional food products were launched in the US, a marked increase from the fewer than 90 introduced in 2004.

Dairy and snacks remain the hottest categories for innovation, but breakfast cereals and bakery follow not far behind, according to Mintel’s Global New Products Database (GNPD).

Most recently, established functional brands like Fiber One and Special K extended into new categories in an effort to maintain brand loyalty.

Condition-specific​

Digestive health has become a leading focus in new product development, with over 165 new functional foods claiming digestive benefits in 2008. Mintel’s survey found nearly four in 10 functional food-eaters say they do so for digestive health. High fiber claims are already popular with consumers and probiotics have been garnering more attention, so digestion will likely continue leading functional food product development in the future.

Cardiovascular claims, which drive over a third of consumers to functional foods, are also very prominent on new products, appearing on 166 in 2008.

Weight control comes in as the third most common benefit in new functional foods, as people look for both weight loss and weight maintenance.

Claims such as brain and nervous system development, immune system strength and bone health are less common in new product development, but they remain growth areas for manufacturers.

Hungry for more​

Functional foods and drinks promise a myriad of health benefits, but Americans remain hungry for more.

People cite many reasons for eating functional foods, ranging from flavor to the offsetting of less-than-healthy eating habits to supplementing good eating habits.

Still, over six in 10 adults say they would like to see more functional foods that can help them maintain healthy body weight, lower cholesterol, promote healthy digestion and strengthen their immune systems.

The functional foods market is strong and growing in the US and Mintel predicts annual growth between 5-6 percent each year through 2014.

As long as consumers remain focused on supplementing their health and compensating for less-than-perfect eating habits, functional foods will be well-poised to meet their needs.

To read the Mintel article on the European market, click here​.​
For more articles in this series, click here​.​