Ingredients suppliers get very excited about science but fail to look at the commercial side of business, according to a new functional foods report.
"Only 5% of health ingredients on the market make a profit," says the report's author, Centre for Food & Health Studies executive director Julian Mellentin. "Just having a scientific health benefit is worthless and a waste of shareholders' money unless you know it will make an impact on consumers."
He claims that most of the market information available to manufacturers is "garbage" because it is too optimistic. "Consultants predicted that the cholesterol-lowering plant sterols market would reach $1bn, but it has only reached a retail value of $80M in the US. Cholesterol-lowering isn't a competitive benefit because so many other ingredients offer the same thing."
The plant sterols arena has only taken off in Europe because of novel packaging, in the form of 100ml shot portions, and because "Unilever got behind it and marketed the socks off it," he says. Ingredients must be made relevant to the consumer, Mellentin stresses. "Science is the basic ticket to go to the party, but when you get there you need a party piece." Manufacturers need to spend twice as much on marketing as on science, he adds.
"One of the biggest problems is companies having too-high expectations of an ingredient. Just because 36% of the population has high blood pressure doesn't guarantee they will all buy into blood-pressure lowering foods. Most people don't even know they have a problem."
In his report, he uses global ingredients manufacturer Kemin as a key example of companies that get carried away with science, without considering consumer appeal.
The firm developed an ingredient from the carotenoid lutein, which is proven to help maintain eyesight. "But it's not an ingredient people will buy into because they only worry about their eyesight when it starts to deteriorate," he says.