Redesign

1. Medical Foods
Functional Foods
and “Consumers have made their food-pur-
chasing decisions based on two factors:
Beverages taste and price. Lately...a third factor has
been gaining importance; health
“
by Daniel Schatzman
M
2002 to 2007, according to a May 2008
report by Mintel International Group Ltd.
arket research suggests (London). New product introductions
there is plenty of room for growth in the during that period multiplied tenfold, as
functional foods category. But market- consumers embraced foods targeting
ing successful products won’t be as easy the immune system, cognitive health,
as it used to be. and weight loss, among other areas.
Since the era of modern processed
foods began 70 years ago, consumers Inside the Mind of the Consumer
have made their food-purchasing deci- The typical functional foods shop-
sions on the basis of two key factors: per is an educated person with a busy
taste and price. Lately, however, a third lifestyle, explains Bill Gambel, director
factor has been gaining in importance: health. of specialty ingredients at Caravan Ingre-
More than 80% of Americans are dients (Lenexa, KS). These consumers are
currently consuming or would consider seeking easy-to-prepare good-for-you
consuming foods with added health and foods, which contain mostly healthy
wellness benefits, according to the Inter- ingredients, and better-for-you foods,
national Food Information Council Foun- which contain added nutrient offering
dation’s (IFIC Foundation; Washington, additional health benefits.
DC) 2008 Food and Health Survey. The Market research suggests that con-
survey, a poll of 1000 adults, found that sumers have several longstanding con-
62% of Americans consider healthful- cerns about their food, their health, and
ness to be an important food attribute. the relationship between the two. About
That percentage has remained roughly 75% of Americans say they are worried
constant for the past three years. about their weight, according to the IFIC
The baby boom’s preoccupation with Foundation survey, and 57% say they are
health bodes well for U.S. manufacturers actively trying to lose weight.
of functional foods, who have seen the Because dietary modification is a
value of their market jump by 63% from popular weight-loss strategy, fat is a
Nutrional Outlook | 41
flickr.com

2. Medical Foods “We have clients formulating it into......refrigerated and
frozen products, such as frozen yogurt and traditional
dairy applications,” Bush says.
major concern. In the IFIC Foundation benefits. tween nutrition and health,” says Joseph
survey, 70% and 68% of the respondents O’Neill, executive vice president of sales
said they worry about the amount and Condition-Specific Foods and marketing at Beneo-Orafti Inc. (Mor-
type of fat they consume, respectively. According to Mintel’s report on ris Plains, NJ). “Consumers are modifying flickr.com
The survey also notes that 91% of Ameri- functional foods, fewer than one in three their lifestyles and diet to help allevi-
cans are aware of trans fat. In fact, 59% consumers cite specific health issues as a ate the pressures of daily life and are
of consumers who read the Nutrition motivating factor behind the items they willing to purchase products that boost
Facts panel on the labels of the products purchase. “Marketers who seek a broad the body’s natural defenses and delay
prebiotic chicory fibers among other OH) launched a Ganeden BC30-enriched Covert attributes the tremendous
they buy look for information about and mainstream consumer base for their or limit the onset of poor autoimmune
ingredients, has seen its products used raisin bran muffin called Activate. More- growth of the omega-3 category to
trans fat content. products are wise to make more general health.”
in a range of applications, such as baked over, in May, Turtle Island Soup (McHen- three main drivers: the general trend of
Consumers also worry about sugar references in their advertising,” advises “We believe the probiotic functional
goods, beverages, cereals, and dairy ry, IL) unveiled four varieties of soup the healthy lifestyle, baby boomer con-
and carbohydrates, with 69% citing the the report, which suggests marketing food market is just beginning to take
foods. O’Neill notes that many formula- containing the ingredient. In addition to cerns about cognitive and cardiovascu-
amount of sugar they eat as a concern. statements such as “the fiber you need” off,” agrees Michael Bush, vice president
tors like to couple the food technology Ganeden BC30, the soups also contain lar health, and parental concerns about
Notably, shoppers are growing wary of or “the omega-3 you want.” Mintel’s of business development at Ganeden
benefits of prebiotic fibers with their omega-3s, CoQ10, and fiber. the developmental health of their young
alternative sweeteners as well, with 43% research notes that older consumers are Biotech Inc. (Mayfield Heights, OH).
health benefits to create value-added children. Covert notes that research
trying to avoid aspartame, 45% shying more likely to seek out foods for spe- “Consumers want choices beyond yo-
products. Cognitive Health such as the Zutphen Elderly Study and
away from saccharin, and 44% trying cific health problems, however. Among gurt. As more choices become available,
“Within the dairy sector, prebiotics Immune health isn’t the only cat- the Oxford-Durham study helped spark
to skip sucralose. Those figures have re- condition-specific items, top functional the market will continue to grow.”
maintain good digestive health and egory that’s expanding. Functional foods interest among baby boomers and
mained nearly constant for the last three food categories include immune health, O’Neill notes that consumer edu-
help boost the body’s natural defenses that are intended to support cognitive parents.
years. Furthermore, less than half of cognitive health, and weight loss. cation remains a barrier to increased
in cultured, frozen, and fluid dairy ap- health are also enjoying healthy de- “We see a huge growth opportunity
those who completed the IFIC Founda- market penetration. But shoppers are
plications,” O’Neill says. “Other popular mand. Although well-known ingredients in the future for products positioned for
tion survey—44%—thought low-calorie Immune Health growing more aware of the relationship
applications include extruded, flaked, such as phosphatidylserine are slowly cognitive health,” Covert says.
sweeteners can play a role in weight The immune health category is in the between diet and health.
and puffed cereals. Prebiotics may also making their way into functional food Again, as with the immune health
management. midst of an exciting expansion, as pro- “Most consumers do not realize
be added to refrigerated fruit juice and applications, the lion’s share of func- ingredients mentioned earlier, new
Good-for-you foods that have been biotics, prebiotics, and synbiotics make that the digestive system is the single
dry-mix products. Some of the leading tional food products targeting cognitive technology is enabling manufacturers to
formulated to eliminate extra sugars, their way into not only yogurt and dairy biggest immune organ in the body,”
food manufacturers in the United States health are formulated with the omega-3 widen the scope of potential omega-3
saturated fats, and empty calories may beverages, but also juices and—thanks O’Neill says. “As consumers are becom-
have created brands based on the use fatty acids docosahexaenoic acid (DHA) applications to foods that were once off
go a long way toward addressing these to recent advances in manufacturing ing increasingly more educated on
of prebiotics and the sound science and eicosapentaenoic acid (EPA). Within limits.
concerns. In addition, better-for-you technology—baked goods, soups, and the importance of digestive function,
supporting good digestive health and the last two years, the number of new “We have developed an encapsu-
foods fortified with added nutrients such coffee. manufacturers have a significant op-
function.” product introductions for omega-3s lation technology that allows food
as vitamins, minerals, probiotics, and “Immune health is rapidly emerging portunity to market prebiotic products
Ganeden’s Bush adds that his compa- doubled. Moreover, the market research manufacturers to include omega-3 in a
fiber may appeal to the 60% of Ameri- as a key driver in functional food and linking digestive health, inner balance,
ny’s Ganeden BC30 probiotic ingredient firm Packaged Facts (New York City) esti- wide variety of foods so consumers can
cans who believe that some foods and wellness food sales, as consumers are and immunity.”
has been used in many applications that mates that the U.S. market for omega-3 get the same great taste in brands they
beverages can supply multiple health better at understanding the link be- Beneo-Orafti, which supplies natural
are off limits to conventional probiotics. foods will reach $7 billion by 2011. love and trust, with the added conve-
The ingredient is shelf stable and can “In the last couple of years, we have nience of improved nutrition,” Covert
withstand extremes such as heat, cold, seen a shift toward functional ingre- says. “To date, we have included MEG-3
More than 80% of Americans are and high pressure.
“We have clients formulating it into
dients with a strong scientific back-
ground,” says Lori Covert, vice president
in more than 30 applications, including
baked goods, milk, yogurt, bars, juice,
currently consuming or would baked products, such as muffins and
bars; heated products, such as soup,
of marketing and communications at
Ocean Nutrition Canada (Dartmouth, NS,
and more.”
For instance, in June, Maramor
consider consuming foods with coffee, tea, and oatmeal; and refriger-
ated and frozen products, such as frozen
Canada), which supplies the DHA/EPA
ingredient MEG-3. “Omega-3s have ben-
Chocolates (Columbus, OH) created a
new dark chocolate product with MEG-3
added health and yogurt and traditional dairy applica-
tions,” Bush says. For instance, in June,
efited greatly from this trend because
clinical research supports the use of DHA
that contains 315 mg of DHA and EPA
per serving, demonstrating that omega-
wellness benefits.
Main Street Gourmet (Cuyahoga Falls, and EPA for cognitive health.” 3s need not interfere with taste. Fur-
42 | Nutrional Outlook Nutrional Outlook | 43

3. Medical Foods
Approved name. ingredient suppliers agree that the International (Atlanta), which supplies ing from breads to soups to drinks,” he
“Our vision is that there will be a market for weight-loss products is still in the weight-loss ingredient LuraLean, Medical Foods Questions & Answers adds. Indeed, the wide array of applica-
whole category of foods that include its infancy. adds that there are other challenges as tions available to food manufacturers is
omega-3 EPA and DHA,” Covert says. “There’s no place to go but up,” says well, such as the difficulty of educating one reason weight-loss products are so
Question:
“Consumers will be able to choose the Bob Green, president of Nutratech Inc. consumers and the lack of generally successful. “We have developed several
What is the difference between a funtional food and a
types of foods and brands their families (West Caldwell, NJ), which supplies the recognized as safe (GRAS) weight-loss grades of LuraLean for use in a variety
medical food?
prefer. This choice will provide flexibility weight-loss ingredient Advantra Z, a pat- ingredients. LuraLean is a GRAS form of of functional foods, including high- and
Answer:
and convenience, plus great taste, so it ented Citrus aurantium extract. Green glucomannan fiber that is free of man- low-viscosity beverages, meal replace-
Function foods are foods enriched with nutrients and other ingredients
will be easy for all consumers to access adds that the market is growing so fast nanase, an enzyme that is thought to ment bars, cookies, soups, and potato
that possess health-promoting properties and are intended for use by the
these vital nutrients.” that the regulatory environment is still break down the ingredient and hinder chips,” Alkyre says. “Most consumers
general population. Medical foods are foods that are formulated to address
catching up. its efficacy. “Weight control is one of the are aware that fiber can help maintain
specific nutritional deficiencies that arise as the reult of disese or injury and are
Weight Loss “Functional foods and beverages are biggest categories where individuals a healthy digestive system and have
intended for use by patients under a doctor’s supervision.
Weight-loss products are a peren- essentially food-supplement hybrids,” are seeking out food products to help heard that increasing fiber in your diet
nial favorite among consumers, most Green says. “From a regulatory perspec- them manage their condition,” Alkyre may play a role in promoting weight
Question:
of whom, as the IFIC survey noted, are tive, several issues have been raised as says. “Although they are showing more loss. Manufacturers are aware that their
My company has a product that is clinically proven to alleviate the symp-
trying to lose weight. Although two- to how to properly market and sell these interest in learning about the relation- consumers see a benefit in fiber, and as
toms of a disease. Can we market it as a medical food?
thirds of Americans say they are making products—and under what set of regu- ship between certain foods and health, a result, we have experienced a lot of
Answer:
changes to their diets to eat healthier lations they will be governed. The cur- that does not always translate into initial success with LuraLean.” Similarly,
Probably not. Medical foods are used to manage the nutritional needs of a
food, only 52% say they are trying to in- rent nebulous regulatory environment taking the next step and purchasing the Green notes that Advantra Z can be
health condition, rather than to treat its symptoms.
crease physical activity. Functional foods for functional foods and beverages will product.” “There are also a host of chal- found in a variety of meal replacements,
that can promote weight loss, therefore, have to be ironed out as this category lenges when it comes to developing an sports nutrition beverages, energy
Question:
are likely to meet a receptive audience. continues to grow.” ingredient that can easily be used in a drinks, vitamin waters, nutrition bars,
How do the regulatory requirements for medical foods compare with the
Despite the high demand, most John Alkyre, president of AHD diverse array of food applications rang- shakes, and smoothies. AdvantraZ can
requirements for pharmaceuticals and dietary supplements?
also be found in functional coffee prod-
Answer:
ucts like JavaFit’s (Fort Lauderdale, FL)
Medical foods, drugs, dietary supplements, and conventional foods each
JavaFit Diet Plus Latte. The 100-calorie
have specfic regulatory rewuirements. In general, while drugs require pre-
drink, which contains no trans fat and no
market review and approval by FDA, dietary supplements, medical foods and
added sugar, contains chromium polyni-
conventional foods do not. However, medical and conventional foods must
cotinate, Garcinia cambogia, and extra
contain generally recognized as safe (GRAS) ingredients and approved food
caffeine, in addition to Advantra Z. “We
additives. In addition, dietary supplements are supposed to contain only
also see an opportunity for Advantra Z
ingredients tht were in use before 1994 or tat have been the subject of a new
to be offered as a nutritional add-in, or
dietary ingredient petition. Drugs and supplements each have their own good
booster, at retail smoothie and snack
manufacturing practices (GMPs) regulations, while medical foods and conven-
bars like Jamba Juice, Robeks, Smoothie
tional foods are covered under food GMPs.
King, and other operations that offer
healthy blended beverages and made-
Question:
to-order foods and snacks,” Green says.
How can I learn more about FDA’s requirements for medical foods?
Answer:
Is the Market Saturated?
FDA issued guidance documents for medical foods in May 2007. The docu-
Mintel’s report on functional foods
ments, as well as FDA’s compliance program manual for medical foods, are
noted that there is an upside and a
available on FDA’s compliance program manual for medical foods, are avail-
downside to the proliferation of new
able on FDA’s Web site, www.fda.gov. FDA also published an advance notice
functional food products. On one hand,
of proposed rule making (ANPR) for medical foods in 1996 but withdrew the
a high number of products is “a boon”
ANPR in 2004.
for the market, as it helps consumers
The range of functional food applications has expanded Nutrional Outlook | 45
in recent years to include snacks and baked goods. flickr.com

4. Medical Foods
new entries could lead to the threat These expenses pose an important ques- consumers appreciate novel packaging
of market saturation. Most functional tion: Do consumers believe in functional as long as a product delivers the same
food ingredient suppliers believe that foods enough to pay a premium? texture and flavor as the conventional
the nascent market still has a long way Many consumers will pay a premium product.
to go before consumers get fed up with for functional foods if they believe they “A successful product, in essence, has
functional foods. That doesn’t mean, will receive a direct benefit. For example, to deliver added value without compro-
however, that there won’t be some re- Caravan’s Gambel notes that an expect- mising on its familiar appeal,” Kshirsagar
finement of the functional food concept. ant mother is more likely to seek out and says. “A prepackaged brownie may be
“There definitely is still a need for prod- pay more for products containing folic microwabable to give the consumer a
ucts that address consumer needs and acid than someone who is not pregnant. desired ‘freshly baked’ brownie, but the
wants,” says Harshal Kshirsagar, Nutralys The fact that some nutrients, such as cer- same brownie will still have to feel, look,
business development project coordina- tain vitamins and minerals, are abundant and taste like a brownie that has just
tor at Roquette America Inc. (Keokuk, IA). in foods and others, such as omega-3s, come out of the oven to be considered a
Roqette supplies Nutralys, a pea protein are more difficult to obtain, can also true substitute.”
used in functional beverages, snacks, justify a higher price point, notes Ocean
and meat products. “Events of the recent Nutrition’s Covert. At a Turning Point
past have made consumers acutely “Consumers determine which health While more growth lies ahead for the
aware of the origins of food products benefits are the most important to functional foods category, the future
and their impact on the environment. them and justify the additional cost in remains uncertain. The Mintel report es-
In coming years, we are likely to see an exchange for the benefits the products timates that 48% of consumers bought
increasing preference toward products offer,” says Ganeden’s Bush. “Premium a functional food within the past three
that are natural and minimally pro- products span across many areas in the months. But the report also predicts a
cessed, and that have minimal carbon market. Consumers show time and time slowdown in some areas, as consumers
footprints.” “There is still a lot of room for again that they are willing to pay for migrate to functional foods that target
growth for functional ingredients in the quality, benefits, and peace of mind.” general health instead of condition-
weight-control segment,” adds AHD’s Helping consumers understand a specific items. Varying levels of com-
Alkyre. “I think at this point what won’t food’s health benefits usually requires mitment to R&D among manufacturers
be tolerated are ingredients that do not educational and marketing campaigns. may also mean that concepts that are
have legitimate safety and efficacy vali- “Consumers will pay more when not well thought out may not last long.
dation, including clinical research and they understand the greater value of In short, competition for consumers will
extensive safety data. The regulations on the ingredients in functional foods,” says be more robust and more complicated.
functional foods are stringent, and the Nutratech’s Green. Further complicating matters is the fact
cost to market is high. As a result, manu- But AHD’s Alkyre cautions that that the current consumer preoccupa-
facturers aren’t willing to gamble on an marketing health benefits for functional tion with issues like health, the environ-
ingredient that has not been proven to foods can entail a difficult balancing ment, and food safety suggest a shift
work.” act. On one hand, manufacturers need away from some consumer attitudes
to avoid marketing benefits that are of the past. This has led the functional
Why Consumers Will Pay “so specific that they do not appeal to a foods category to a turning point, says
a Premium general audience.” On the other, market- Kshirsagar. “In the past, taste, flavor, cost,
A successful functional food deliv- ing a product with too many benefits and convenience were the main deter-
ers added nutrition in a convenient may lead consumers to believe “it minants of success for food products,”
package. But that achievement seldom doesn’t have a distinct purpose,” he says. Kshirsagar says. “The future of functional
comes without a cost. The financial Further complicating matters is foods is going to be even more demand-
commitment required for research and the fact that consumers are willing to ing. “Formulators will have to retain the
development, intellectual property pro- experiment with some aspects of their conventional benefits of palatability,
tection, and consumer education often food choices but not others. Roquette’s cost, and convenience, all while deliver-
means higher prices for consumers. Kshirsagar notes, for example, that ing healthfulness and sustainability.”
46 | Nutrional Outlook