Functional foods grow with concerns over health
Consumers are not about to be passive when it comes to their health, and that proactive mindset is fueling sales of functional foods. Whether they’re designed to promote heart health, improve the digestive system or boost memory, functional foods are growing in popularity.
A recent report from Packaged Facts revealed that sales of functional foods and beverages in the U.S. retail market totaled $31 billion in 2008, a 6% gain over the previous year. Packaged Facts predicted functional foods will grow at a steady pace through 2013 to reach $43 billion in sales.
While the market for functional foods isn’t recession-proof, the products aren’t as vulnerable as other categories because consumers believe using them actually can save them money on medical expenses in the long term. A recent Times & Trends report from Information Resources Inc. said “consumers are intently focused on nutrition as a preventative medicine, and [consumer package goods] marketers are capitalizing on this trend with fervor.”
Probiotic foods have been the recent stars of the category. Fueled by the success of Dannon’s Activia and ProActive brands, the category has exploded. “One of the reasons Activia has been a big success is because Dannon offers a 14-day money-back guarantee,” said Lynn Dornblaser, director of CPG Trend Insight for Mintel Research Consultancy. “They also have the science to prove it, and that means a lot.”
David Lummis, an author of the Packaged Facts’ functional foods report published earlier this year, believed probiotics still have an upside. “Probiotics are still at an early stage, and the category still has legs,” he said. Dornblaser saw the peak of the category coming more quickly.
But more growth could come once manufacturers start bundling claims together, such as products for digestive and heart health. Heart health is a big issue for millions of Americans. Food Technology magazine reported that last year, 32% of consumers made a strong effort to eat heart-healthy foods that contained omega-3s, DHA or EPA, and 20% ate foods with cholesterol-lowering ingredients. Food Technology’s special report predicted that foods containing such heart-healthy ingredients as polyphenols and flavanols, as well as plant sterols for cholesterol management, will continue to attract consumers who are concerned about heart disease.
Unilever’s ProActive cholesterol-lowering mini-drink and Corozona’s Heart Healthy Potato Crisps, which both contain plant sterols, have been well accepted in the marketplace. Dornblaser saw heart-healthy functional foods as a big opportunity for the drug channel. “Seniors who are concerned about heart health are coming into the store for their prescriptions, and with more drug chains offering in-store clinics, functional foods and supplements can be integrated into traditional therapy in a whole health approach,” she said.
Other areas expected to heat up in 2010 are products with functional ingredients for cognitive health, stress and anxiety relief. Wild Flavors, an ingredient manufacturer, predicted that consumers facing difficulty sleeping or relaxing will look to more holistic solutions in the forms of food and beverage supplements. “These will grow in popularity for all demographics—even products for children,” noted a recent report from the company.
Products with antioxidant claims also are expected to grow in popularity. “Superfruits are still hot,” Lummis said. “Blueberries are still the most popular superfruits, but new fruits, such as yumberry, noni and yuzu, are on the horizon.” Lummis added that in 2008, there were more than 1,000 new products containing superfruits introduced to the market. Lummis also predicted the market for functional foods for cognitive health and arthritis will explode. Joint Juice and Joint Juice fitness water already have been well received by consumers.
Whatever direction manufacturers decide to take new functional food introductions, they likely will be treading carefully when making claims. In December 2008, the Food and Drug Administration sent a warning letter to Coca-Cola, calling its Diet Coke Plus “misbranded” and saying the “product makes a nutrient content claim but doesn’t meet the criteria” for the claim. The FDA also recently sent a warning letter to General Mills over its cholesterol-lowering claims for Cheerios.
Kroger declares quarterly dividend
CINCINNATI The Kroger Co. announced that its board of directors declared a quarterly dividend of 9 cents per share to be paid on Sept. 1 to shareholders of record at of the close of business on Aug. 14.
Kroger, one of the nation’s largest retail grocery chains, employs more than 326,000 associates, who serve customers in 2,475 supermarkets and multi-department stores in 31 states.
On Thursday, the company announced that its president and COO Don McGeorge was retiring. McGeorge has been replaced by W. Rodney McMullen.
Walgreens to test diabetes care model
NEW YORK Walgreens continues to flesh out its revamped strategy to be the nation’s most convenient and accessible provider of pharmacy and health-and-wellness services.
The latest plank in that platform is its plan to test a pharmacy-driven outreach and support program for patients with diabetes.
Diabetic-care services and product presentations are nothing new in the nation’s chain and independent drug stores; every pharmacy leader knows that diabetes is a major, (often undiagnosed) health challenge and a “gateway” disease that usually subjects its sufferers to a slew of other related conditions involving the circulatory system, the skin and other organs. It’s also no secret that diabetics generate far more in annual drug store sales to treat these related conditions.
What makes Walgreens’ pilot program worthy of notice are two things.
First, with some 6,800 retail pharmacies, 350 in-store and worksite clinics and a network of specialty pharmacies across the United States, the company wields enormous potential power in the healthcare marketplace. If it expands its fledgling diabetes pilot beyond the test stage, it has thousands of “points of care” through which it could offer diabetes support programs and other disease management offerings. It’s a huge potential resource to offer diabetic patients and their employer-based or government-sponsored health plans, not to mention those patients’ overburdened, time-constrained primary care doctors.
Second, Walgreens is very deliberately positioning its diabetes care offering as a part of a much broader, integrated healthcare platform that links patients in the program to all the company’s health-and-wellness capabilities, said Walgreens CEO Greg Wasson. And it dovetails neatly with the Obama administration’s call for “more preventive care and better access,” in the words of Walgreens’ top manager.