Functional drinks: Here's to your health!

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Related tags: Nutrition, Soy milk, Soybean

Functional drinks: Here's to your health!
Satisfying health-conscious consumers and EU health claims means functional drinks makers are walking a tightrope. Chloe Ryan reports

Do you drink Nestlé's Glowelle in the morning to improve your skin, knock back a Red Bull in the afternoon as a pick-me-up, then relax before bed with a green tea enriched with extra antioxidants? If so, you're not alone.

Functional drinks have shown impressive sales growth, despite the recession and the laborious process of ratifying EU health claims.

According to market intelligence provider Datamonitor, in 2009 the global market for functional beverages was worth US$49.5bn. By 2014 it expects this to rise to around $66.3bn a yearly growth of about 6%. The UK market for energy drinks alone has grown by 18% over the past year [Kantar Worldpanel 52 w/e July 11 2010]. Energy drinks remain the biggest segment of the market, commanding about 40% of sales.

The sector is maturing, but growth is still strong in western Europe and Latin America as more consumers try the products' claims for themselves. "Emerging markets are catching up in this area and energy drinks in India are forecast to grow very well," says Datamonitor analyst Mark Whalley. "People believe in the claims because they have tried them."

It's one of the latest sectors to get caught up in the move to 'clean' labels and more 'natural' ingredients so dominant in the wider category.

One of the hippest 'natural' ingredients in this arena is coconut water. In March, Go Fast launched Coconut Energy, containing ginkgo biloba to improve alertness, and caffeine, taurine, milk thistle and inositol for energy. Free of preservatives, it replaces artificial sweeteners with sugar and honey and uses coconut water as the main ingredient.

US firm Vita Coco claims its eponymous coconut water-based brand, which is sold in Europe, has more potassium than two bananas and five naturally occurring electrolytes. It is expanding production of the drink fivefold in a deal announced last month with Philippines-based Fresh Fruit Ingredients. The product shows how manufacturers are competing with the increasing numbers of functional squashes and juice drinks derived from superfruits, according to market analyst Mintel.

The superfruit craze shows consumer demand for natural ingredients remains high, says Tim van der Schralen, marketing and communications manager of ingredients company Beneo.

At the same time, relaxation drinks also promote their natural credentials. Two new products were launched in the UK in 2009, produced by US manufacturer Viva Beverages. Quick to Sleep and Quick Relax, with ingredients often associated with herbal tea: chamomile, lemon balm and rosehip.

Van der Schralen says Beneo's functional carbohydrate ingredient Palatinose, which is used in Rosbacher's energy drink Rosbacher Drive, taps into the natural sweeteners trend. "It is sugar molecules rearranged, but fully digestible with a slow energy release over a longer period than sucrose because it takes four to five times longer to hydrolyse. So instead of a traditional peak it gives you a more constant flow of glucose, which is important to muscles and brain."

While demand for healthier formulations feeds the use of ingredients as sugar replacers, it is also leading to the use of others to fortify products. DSM Nutritional Products has launched 12 ingredients that each claim to tackle a specific area, including cognitive performance, heart health and anti-ageing.

One growing trend is fortification of 'free from' products to give all the benefits of their mainstream equivalents, plus others. Solbar is soon to launch the calcium-fortified soy protein ingredient Solpro 735, replacing the calcium in dairy milk. It can be used in any dry blends that need reconstituting with water or in ready-to-drink beverages, but the main applications are for calcium-fortified soy milk and other soy beverages, says David Kraus, global applications manager of Solbar.

"Some people drink soy milk and are omitting the fact that in, soy products, the level of calcium is much lower than if you were comparing the levels to cows' milk," says Kraus. "People are looking at having higher doses of calcium to prevent osteoporosis and other issues."

Increasing consumer awareness of soya's natural health benefits and increased diagnosis of lactose intolerance has stimulated soya milk sales, making it a lucrative market for fortification, claims Kraus. So Good has introduced an omega-3 enriched soy milk to strengthen its heart health claims, for example.

Consumers are more convinced by these and other well-established and straightforward benefits, says Van der Schralen. "Digestive health is the main driver of the functional food market alongside mental energy and alertness," he says. "If we look at vitamins and anti-oxidants we see a number of new product launches have failed and it's not surprising because it's difficult to differentiate. Offering health benefits that are more relevant to consumers, means that consumers will also be able to pay a price premium for these products."

Products claiming to aid digestive health often contain the soluble fibre inulin, which, as a prebiotic, stimulates the growth of beneficial gut bacteria. "Specific blends have proven very efficient in stimulating calcium absorption," says van der Schralen. They are increasingly popular and are found in a large number of products, including Nestlé prebiotic drinks. When it comes to cognitive health, Whalley of Datamonitor says existing ingredients are gaining more traction: "CoQ10 [Coenzyme Q10] has some resonance for consumers.

"In addition, the omega-3 fatty acid DHA [docosahexaenoic acid] is very marketable because it has eye and heart health benefits as well as brain health. It's still most commonly found in supplements, but Yakult has a variety which contains DHA, giving it additional health credentials alongside digestive and immunity health. The ingredient has also become more commonly used in products for children, which appeals to parents who want to feel that they are doing the best for their kids."

Vitamins C, D and E, berries (strawberries, blackberries, blueberries and raspberries) and grapes have attracted interest in the cognitive health market. "To convince consumers that functional products are trustworthy and effective, manufacturers are turning to tried and trusted ingredients that are backed up by scientific research and which consumers believe they understand," says Whalley.

Drinks for cognitive health are experiencing double digit growth in most markets, he adds. Drinks for heart health such as V8 vegetable juice, the Welch's range, and drinks containing pomegranate are also doing well.

Weight management is also growing in popularity. Nestea Fit by Nestlé and Coffee Pro-Slim by San Mig are examples of tea and coffee beverages containing Carnipure (L-Carnitine), made by ingredients firm Lonza. L-Carnitine is an essential nutrient in energy metabolism.

"With coffee and tea being so popular and with weight management being such a hot topic, it's an ideal combination of a favourite drink with weight management benefits," says Lonza marketing assistant Adriana Williams.

Despite the proliferation of new products, the EU health claims Regulation has given the industry a headache, with the European Food Safety Authority (EFSA) giving precious few favourable opinions to date.

"It is clear it has had an impact on the market," says van der Schralen. "The whole procedure is generally welcomed by the industry because it is of benefit to everybody but, in terms of timing and the approval process, there is a lack of clarity and that is creating a bit of unhappiness."

David Kraus, global applications manager at Solbar, agrees. While the market has been in healthy growth, Kraus says it is hard to judge how much more it could have grown were it not for the negative publicity surrounding EFSA's reluctance to ratify any health claims. However, that hasn't stopped real niche health markets from evolving. One unusual newcomer is Avia Relax Drinking Water With Laughing Gas, launched in Russia by Sunrise Innovation. The drink has a mix of carbon dioxide and nitrous oxide and is sold as an alternative to alcohol for people scared of flying.

'Nutricosmetic' drinks, which make beauty claims, is also a small but growing market, says Whalley. "Nestlé's Glowelle is the most high-profile product. The fact it's Nestlé adds credibility and interests consumers." Van der Schralen adds: "They are still really niche. But from a manufacturer's point of view it can be a very good strategy to look at these segments because they can provide good business, even on low volumes."

That certainly seems the case for beverages. While Danone's Essensis yogurt, with claims to improve skin tone, was withdrawn in France last year due to the recession, beauty drink Sip, launched in 2007, got UK-wide listings.

Overall, then, even in niche categories, functional drinks are in rude health. Something to drink to for firms active in the sector.

Related topics: Drinks

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