Dive Brief:
- The functional foods and nutraceuticals market is expected to grow at a CAGR of almost 8% through 2020, according to a new report from WiseGuyReports.
- Rising medical costs are driving consumers to functional foods and beverages, which has inspired more manufacturers to embrace the category. The report names Coca-Cola, Kellogg, Nestle, and PepsiCo as key functional food and beverage vendors.
- Breakfast cereals and energy drinks are two segments that could benefit from the rise in demand for functional foods, according to the report. This is in addition to products that feature plant-based ingredients like oats, flax seeds, tomatoes, broccoli, citrus fruits, and cranberries, which have health benefits manufacturers can promote.
Dive Insight:
As more consumers relate their state of health to their diet, they look for foods that have demonstrable health benefits.
In response, manufacturers are working to identify functional ingredients that tout these health benefits. Functional ingredients need to work in terms of flavor and texture within a particular product, have desirable health benefits, and be accessible and cost-effective enough to integrate into the company's supply chain.
A second component is crafting the language needed to communicate benefits, as even the term "functional foods" has no official FDA definition. That language can not only be confusing to consumers, but the meanings of certain terms vary from company to company.
The FDA is currently deliberating over providing rules to clarify use of terms like "natural" and "evaporated cane juice." This recently led to the stay of a Chobani class action concerning the company's use of the word "natural" on its product labels.