The sheer volume of functional-beverage entries in the market is staggering, intimidating and a bit frightening, since probably 50% of those brands won’t be on the shelf one year later. Functional-food brands have not yet proliferated to the extent that functional beverages have, but it won’t be long. Consumers have clearly said in surveys that they want their nutrition to come primarily from what they eat.
Functional foods and beverages represent roughly a $37 million category in the U.S. retail market. Growth in 2009 slowed a bit compared to 2008, which was primarily recession-driven, and saw the discontinuation of many slow-moving entries. An estimated 80% of new functional products fail in the marketplace, largely due to inadequate promotion, inadequate consumer and trade education, and introducing an undifferentiated product. (How many energy drinks can the market support?) That said, the functional category is outpacing traditional food and beverage sales in the United States. So, the first trend to note is brand proliferation followed by a shakeout of slow movers.
Further, whether you are talking foods, beverages or supplements, it’s all about condition-specific applications. Increasingly, consumers are shopping based on specific and identified health needs. The most dominant conditions at this point include energy and performance, healthy aging, immunity, digestion, cardiovascular, joint support, weight loss and diabetes.
Another trend to watch is superfruits. Literally hundreds of undiscovered fruits lie hidden in the rainforests of the world, and Americans are enamored with these healthy superfoods. Also keep an eye on tart cherries, which boast some impressive research on gout and arthritis treatment. Further, expect to see spices and seasonings emerge as functional ingredients over the coming months.
Functional foods and beverages is definitely a category to watch over the coming years. Consumers are clamoring for new products and are looking to food first for enhanced nutrition and well-being. Soon, demand will exceed supply. Get busy.
Jeff Hilton is partner and co-founder of Integrated Marketing Group, Salt Lake City, a marketing and branding agency. He has been recognized by Advertising Age as one of Americas Top 100 Marketers and has more than 28 years of experience, including 17 years in the natural health products industry. For more information, visit imgbranding.com.
Hilton will present “Trends in Functional Food and Beverage Marketing” on Oct. 21 at 11 a.m. during SupplySide West, scheduled for Oct. 19-23 at The Venetian & The Sands Expo, Las Vegas. To register for SupplySide West, log on to supplysideshow.com .