Markets: functional drinks

Herbal drinks form part of die functional drinks sector. Some idea of the growing importance of diis sector can be gained from the International Functional Soft Drinks Report 2003 (Zenith, 2003), which covers the United States, Japan and 16 Western European countries. The market has become so sophisticated that the report can define four subsegments ... 

The Japanese market is the most established by far. It consists largely of health and functional drinks in small bottles, although more recently lines are starting to appear in standard soft drinks packaging. Many of the brands on the market target gut health through the use of prebiotics and dietary fibre. Bone health is also a major focus, using various calcium sources in combination with promoters of calcium absorption such as calcium citrate malate. 

Germany is the most developed functional drinks market in Europe, due to the success of drinks fortified with vitamins A, C and E, otherwise known as ACE drinks . Sales of ACE lines, including newer products such as those fortified with vitamins B, C and E and DHA, are worth in excess of 100 million/year. 

There are only a few sterol-enriched drinks, other than dairy products, currently on the market. However, drinks are a growing segment of Ae functional food market and it is likely that there will be more of these types of products in the future. The few examples include a juice-milk drink enriched with plant sterol esters in Argentina ( SereCol ), and a free sterol-enriched drink in Korea ( Ucole ). 

Chemical-based products cover a broad spectrum of materials and forms, ranging from molecules to appliances. Table 16.1-1 shows the various product functional forms, along with examples in major application areas. Examples highlighted in italic are those discussed in this book. Most small molecules such as BTX (benzene-toluene-xyxlene) are sold to chemical and allied products industries while a limited number such as refrigerants and solvents are for sale in the consumer market. In contrast, multicomponent liquid mixtures such as liquid shampoo, semi-solids such as cream and paste, and structured solids such as controlled release herbicide are often sold directly to the consumers. Business-to-consumer sale is even more prevalent for ready-to-use devices and appliances such as diagnostic kits, drinking water filters and air cleaners. 

Consumption in 2002 grew in diese markets by 11% to over 12 billion litres. Functional soft drinks now account for 6% of all soft drinks consumption by volume in these markets, up from just 4% in 1998 (see Figures 12.1 and 12.2). It follows diat herbal extracts have a role to play in this increasingly important soft drinks sector, which can no longer be seen as an insignificant niche market. 

Figure 12.1 International functional soft drinks market 1998-2002 United States, Western Europe and Japan.

The company aims to secure market share as quickly as possible, particularly in the food packaging area. Marketing activities are being focused on drinking cups, deli and produce containers and other packaging uses where the resin can function and compete on price with established polymers such as PET. In fibre form, the material is also suitable for the production of textiles (garments, carpets). 

These drinks are marketed as still or carbonated drinks. As with their higher juice-containing counterparts, the replacement of sugar by artificial sweeteners as well as the addition of healthy functional ingredients is common. 

All developments start from the desired claim Prior to the formulation of products, it is very important to understand the motivation of the consumer. Does the consumer really understand the benefits that the food promises Is it likely that the consumer can understand that the food has an effect on his or her individual health Is the health effect measurable It is very important to take these factors into account. The number of failures in the area of development and marketing of functional foods is high. Table 5.16 gives a checklist for the development of healthy drinks [16]. 

Successful functional product innovations dealt with other food sources have been mainly launched targeting the markets for nonalcoholic beverages fortified with the vitamins or other functional ingredients, breakfast cereals, cholesterol-lowering spreads, confectionery, biscuits, cereal, cereal bars, soft drinks, probiotic and prebiotic dairy products. 

Examples of functional foods that have potential benefits for health and whose market has grown tremendously include baby food, ready meals, snacks, soft drinks such as energy and sport drinks, meat products, and spreads. 

Lactic acid bacteria with defined functionalities play a major role as starter cultures for the production of fermented foods such as yogurt, cheese, bread or fermented drinks. Additionally, specific strains of lactic acid bacteria are also widely used as health promoting additives. These so-called probiotics are added to the food in hi cell numbers to enhance their functional properties or are marketed in isolated form as special dietary supplements. Probiotics are frequently distributed as dry powder. 

In fact, one of the main leastais of the success of functional foods has been the role of consumers undertaking new trends to a healthier lifestyle. Many objective data show this tendency. For example, between 2006 and 2007, vegetables and fruits were the top 2 products whose use increased in North America, Western Europe, and Nordic Europe, while processed foods, salty snacks, and sugars were some of the products with the biggest decrease in use. In the last 25 years, butter has decreased from around 70 % of the yellow fat market to 25 %, while low fat spreads have captured half this market In the cooking fat sector, vegetable oils have taken over the animal fats. Skimmed and semi-skimmed milks have copped 2/3 of milk sales, while low calorie soft drinks have increased to 20 % of the soft drink market [31]. 

Many market studies of global sales of functional foods differ in the data, depending on the criteria used for the inclusion of products in the analysis. For example, under a strict definition, according to Leatherheadfood, the functional food and drinks market had a combined value of 19.4 billion in 2007, whereas with a broader definition, the market raised to 41.9 billion [41]. In 2011, the global market for a strict definition of functional products as those offering specific health claims was estimated at 24.2 billion [42]. BCC research established a Nutraceuticals Global Market for nutraceutical foods, nutraceutical beverages, and nutraceutical supplements of 40 billion each. 

The Japanese market is entirely different from those of Europe and North America, reflecting the more established nature of the market, and the greater links between food and health already made by Japanese consumers. The stronger presence of pharmaceutical companies in the Japanese functional food market may also be a contributory factor. The size of the market for foods approved to carry claims (FOSHU) is clearly documented, and is currently just over US 2 billion. However, there are also many products on the market that have not yet applied for FOSHU approval or where the process is under way. The existence of a wide range of functional products across all sectors of the food and drinks market makes it difficult to quantify the total size of the functional foods market in its broad sense. 

While probiotic dairy products dominate the European functional foods market, this is not the case in the USA, where the market remains comparatively unexploited. In Europe, the market is worth around US 1.3 billion a year, and is growing in most countries, mainly in the area of probiotic drinks rather than spoonable products. With the chilled dairy products market much less developed in the USA than in Europe, it is not surprising that the US market for probiotic yoghurts and other probiotic dairy lines is relatively small. In the USA, interest in probiotics has so far largely been confined to the dietary supplements market, although the recent withdrawal of a supplement version of Nestl6 s LCl brand indicates that there is still some way to go to gain US consumer acceptance of the probiotic concept. 

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