Stiff regulation shrinks global functional food market

By Nicholas Robinson

- Last updated on GMT

Functional food market slow down to poor economy and stringent regulation
Functional food market slow down to poor economy and stringent regulation

Related tags Functional food Nutrition

Strict health claims regulations and the economic downturn have had an adverse effect on the global functional food and drink market, according to a report from Leatherhead Food Research.

Functional food market growth rates remained well below the levels of the early 'noughties', as a result of tight regulation and a poor economic climate.

However, the global functional food market had grown recently and was valued at £27bn last year, which was 26.7% higher than in 2009, said Jonathan Thomas, Leatherhead’s principal market analyst.

During the economic downturn at the beginning of the millennium, consumers had shifted to cheaper groceries in favour of pricier specialist foods, showed the report ‘Future directions for the global functional foods market’.

Changes to regulation had also hindered growth, as functional food manufacturers had to provide robust scientific evidence to back up health claims on products, he added.

‘Estimated £10bn’

Despite a decline in the industry previously, the sector was picking up and the energy and mood-enhancing sector experienced the most growth. “It is the market’s largest, worth an estimated £10bn in 2013,” Thomas said.

Energy and mood-enhancing products accounted for 27.1% of the total functional food market last year, reflecting the popularity of the products – energy drinks in particular – amongst consumers, according to the report.

Digestive health and heart-health foods were worth £10bn and £8bn respectively and were the next most popular functional food products, it added.

However, foods that claimed to have a positive impact on the immune system were less popular and were valued in the report at £638M globally.

“The functional foods market has experienced fairly strong growth in certain parts of the world,” ​said Thomas.

‘Perceived shortfalls’

“More US consumers appear to be turning towards functional food and drinks in order to address perceived shortfalls, away from dietary supplements, which have traditionally been the preferred option.”

Any future market growth would depend on the global economic situation, he added.

To grow the market further, functional food firms had to target the seven-year gap​ between total life expectancy and healthy life expectancy, Diana Cowland, senior analyst for health and wellness at Euromonitor told earlier this year.

The functional food market had stagnated in recent years, despite experiencing strong growth in the past, she said.

“We’re not seeing such big growth in the functional food sector as we have in recent years.

“The ageing population should be a clear stimulus for reinvigorating functional food and drink,” ​she urged.

Meanwhile, read about the top five food and drink trends​ for 2015.

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There's no such thing as functional food

Posted by A Fallon,

Julian's comment is 'spot on'. This misleading term has been kept in the lexicon by reports such as those quoted, which are about as insightful as trends 'data' based on based on the latest product launches. It is not terminology recognised by consumers, even when prompted. It is poorly defined and often misunderstood by many of the commentators that use it. Maybe it's time to wave it goodbye?

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Useless statistic

Posted by Julian Mellentin,

People do not go shopping with a list that says "Fruit, yoghurt, coffee, functional foods, ice cream." There is no such thing as functional foods - either in regulatory terms or consumer definition. There are only foods with health benefits - and people when they go into the store will consider ANY food - a fruit, a yoghurt, whatever - that they think will give them the health benefit they are interested in. Creating a false definition of a "functional food market' is of no value to companies or to consumers.

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