Is the UK functional foods boom over?

By Shane Starling

- Last updated on GMT

Related tags Nutrition Mintel

Functional foods have been one of the strongest sectors within the broader food industry for more than a decade but the good times may be coming to an end - at least in the UK, according to Mintel research.

It says consumer disillusionment with supposedly functional ingredients they don't understand and the trend towards whole foods and all things 'natural' has put a dent in the sector's otherwise rampant growth. "Confused consumers couldn't tell which products were doing what after a raft of new launches that had different health claims and price points,"​ said Mintel analyst, David Bird. "Focus moved instead to naturally healthier products such as superfoods like blueberries and pomegranates."​By way of example, it noted the sales of blueberries had risen 132 per cent in two years. Stats don't lie​ While the UK functional foods market grew by 171 per cent between 2002 and 2007, Mintel noted it grew by only three per cent in 2007 to £613m (€766m) from £596m (€743m) in 2006, when it bulged by more than 20 per cent from 2005's £492m (€613m). The market was valued at £226m (€282m) in 2002. Yet going forward Mintel predicted growth of 72 per cent between 2007 and 2012 with sales broaching £1bn (€1.25bn) that year. Mintel said companies were reducing the size of the budget they were throwing at brand launches and rationalising launch strategies. "Promotional spending in 2007 dropped as a result of more challenging market conditions and fewer product launches,"​ it said. Specific immune and cognitive function claims were set to grow, it said, but categories like cheese and bread would struggle because consumers didn't see them as healthy food items. The challenge for functional foods companies was to develop strategies to tap into the health and wellness trend, it said. "Greater health awareness amongst consumers will continue to drive growth,"​ it said. "Consumers now have a much better understanding of the relationship between diet and health, and as a result are seeking out foods that will improve their health and prevent problems later in life. With consumers leading increasingly busy lifestyles convenience is also key, and functional foods are able to meet this need."

'One-shots' take a shot​The sector has been hit hard by falling sales in what was one of its shining categories - functional one-shot yoghurt drinks - they plunged nine per cent in 2007. In the sterol/stanol-fortified cholesterol-lowering area, Benecol registered sales of €36m between 2006 and 2007 but Flora Pro.activ fell from €17m to €14m. Danone's version, Danacol, which contained omega-3, was withdrawn along with a Unilever omega-3 one-shot drink.​ Unilever also withdrew Pro.activ from the Spanish market. Unilever told recently it will be giving the UK Pro.activ range a marketing makeover in coming months. "The chief element that we've seen in the UK market has been that of growing consumer confusion about cholesterol-lowering products over the last 18 months or so,"​ said Trevor Gorin, the head of Unilever PLC & UK media relations. "For example we have seen a lot of switching to oats because GPs are recommending them as a cholesterol-lowering food."​Sales of spreads and spoonable yoghurts fell for both Benecol and Unilever. Probiotic challenge​ Even the buoyant probiotics sector was meeting consumer apathy with Muller, the market leader in the UK, removing probiotic ingredients from its Vitality re-launch at the beginning of the year. A Muller spokesperson was unavailable for comment as to why this decision had been taken. The probiotics sector may have also taken some damage from sensationalist "Probiotics kill"​ headlines that followed a Dutch study earlier in year linking their use with mortality among pancreatitis sufferers. The UK current affairs TV programme, BBC Horizon, questioned probiotic health benefits, particularly their most common claim of better digestion. Which? magazine, the journal of the consumer watchdog of the same name, found the evidence backing probiotics was "patchy".Scepticism​ Despite progress being made with pan-European Union health and nutrition claims legislation that will make it more difficult for companies to make claims that aren't backed with credible science, consumer scepticism toward claims remained high. "Consumer cynicism over health claims made and the price premiums charged by some manufacturers are the key obstacles that stymie the development of a wider purchasing repertoire of functional foods,"​ Mintel said. When EU claims were ratified, a process that is due to be complete by January, 2010, consumer cynicism would ease. "This will put greater emphasis on scientific credibility of products,"​ Mintel noted. "Going forward, these scientific data should be used to enhance the reputation of these products with consumers, and provide a more compelling motivation for purchase. This will be essential to distinctly distinguishing a functional product with an advanced health care claim from the wider health food market, and thus justify its price premium."

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