Disruptive Innovation in Functional Foods

Consumers are looking in new directions for better ways to live their lives—and they’re counting on functional foods to help them.

By Gregory Stephens, RD

Today’s consumers seem to be changing many long-standing societal norms and these behavioral changes are opening the door to disruptive innovation. From eating less meat, to refusing vaccines, to trading in the suburban home for an eco-friendly urban flat, to rejecting financial services models and managing one’s own portfolio—consumers are starting to “just say no” to traditional behaviors. When they say NO, when they break the mold, balk tradition, swim upstream, consumers are creating entirely new markets for products and services—and sometimes creating entirely new category opportunities.

Fortification & Functional Ingredients

Certainly the food and beverage industry is feeling the effects of these new “disruptive” attitudes and behaviors. Consumers are becoming more focused on what they are putting into their bodies and are taking a longer, more educated look at product labels. They are showing less tolerance for a long list of what they sometimes refer to as unrecognizable ingredients on labels. These trend leaders are making their voices heard by turning to simpler, more “natural” products. In fact, according to NMI’s most recent Health and Wellness Trends Survey, almost half of consumers (46%) indicate they look for foods and beverages with a short list of recognizable ingredients and nearly two-thirds (64%) indicate they prefer foods that are “minimally processed.”

Not surprisingly, as consumers become more knowledgeable about the health benefits of bioactive ingredients, they begin looking for products fortified with them. Still, there are some consumers who seem less interested in products that are fortified or have “added” functional ingredients, and are expecting foods to be naturally rich in beneficial nutrients.

These new consumer demands for simple, transparent and nutritionally dense foods are driving demand for specific functional foods, sometimes in otherwise saturated or stagnant categories. A good example is Five ice cream by Haagen Dazs. Five simple ingredients listed on the package make it less objectionable to some health oriented consumers (who may not even eat ice cream), allowing them to justify the indulgence through its natural dairy perception and benefits of the protein.

Ingredient Sourcing

In addition to more simplicity on the list of ingredients, there is also a growing interest among consumers for more information on how and where the products were sourced and manufactured. Savvy consumers are becoming less tolerant with traditional farming and manufacturing practices and want their foods, for instance, free of pesticides (62%), hormones and antibiotics (49%), preservatives (40%) and less processing (32%). While a portion of consumers have turned toward organic foods to avoid some of these negatives, consumer confusion and mistrust continue to create challenges for the organic industry. Almost half of consumers confide that the benefits of organic foods and beverages are not clear to them and about two-thirds are not sure that products labeled as such are truly organic.

Such consumer concern is going beyond organic and is expanding to issues outside the scope of traditional organic benefits. While 40% of consumers indicate they expect their stores to carry organically grown foods, consumers also want their stores to carry foods that are locally grown, foods from farms that practice sustainable agriculture, and meat and poultry from free-range and humanely raised animals.

These concerns are also becoming more global in scope. Labels certifying that global workers rights and global environments are being protected are carrying more weight with consumers as they are becoming more aware of how their purchases affect the world around them. NMI research shows that, increasingly, consumers exhibit higher purchase intent when a food or beverage product carries a fair trade certification a rainforest alliance certification or the marine stewardship council logo.

Aging Redefined

Along these lines, Baby Boomers are notorious for challenging tradition throughout our lives. Aging is no different, as they have no fear in breaking perceptions of traditional aging. As Boomers transition from one stage of life to the next, their desire to maintain independence, vitality and relevance will drive new category opportunities. In fact, the explosion of products and services targeted to a generation now beginning to hit their 60s is filling the market—from functional beverages to cosmetic surgery and anti-aging creams to retirement planning—in order to address this phase of their life.

In part, the health and wellness surge we’re currently experiencing in the U.S. can be attributed to health-committed Boomers. It is not surprising, then, that significantly more Boomers (57%) than any younger generation admit they are very self-motivated about maintaining and improving their health. This self motivation is helping drive the functional food and beverage market, organics and the “less is more” trend, to name a few.

In fact, Boomers are more likely than younger generations to:

• Have initiated use of functional/fortified foods to treat or manage health conditions;
• Want their stores to carry foods with a specific health claim;
• Want foods with less sugar, less sodium;
• Want foods with fewer pesticides, preservatives and hormones; and
• Want foods with more fiber, antioxidants, omega 3s, whole grains, vitamin D.

Given the downturn in the economy, food safety issues, corporate mistrust and oil spills, consumers are increasingly realizing that some traditions no longer fit their value set. They have begun to look in new directions for better ways to live their lives. In their quest to take the road less traveled, they are breaking new ground and creating new opportunities for industries that possess the insights into this new, demanding consumer.

http://www.nutraceuticalsworld.com/contents/view/29756

http://back2basicnutrition.com/

http://bionutritionalresearch.olhblogspace.com/