Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Functional food
- Functional beverages
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- Bottom line
- Rising health consciousness strong, but consumer follow-through still weak
- As expected, the complexity of many different health claims causes confusion
- Women are the over-arching consumer group, but many targeting opportunities exist
- How various consumers approach the category
- Marketing imperatives
- Diverse products means that no manufacturer owns this category
- Marketers get aggressive in trying to prove product claims
Market Drivers
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- The diet-disease connection
- Consumer awareness, attitudes, and behaviors
- Health concerns at an all-time high
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- Figure 1: Attitudes regarding healthy eating, 2002-05
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- Figure 2: Reason(s) for watching diet, Spring 2006
- A disconnect between awareness and implementation
- The skeptical…
- …and the confused
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- Figure 3: Ability to determine which foods are functional, September 2006
- Figure 4: Why consumers don’t buy functional products, September 2006
- Demographic opportunities
- The influential female consumer
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- Figure 5: U.S. female population by age, 2000-10
- Young adults are game
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- Figure 6: Purchase of functional drinks and food, by age, September 2006
- The untapped elderly
- FDA an unlikely source of industry support
- Overweight a public health crisis
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- Figure 7: Overweight and obesity, by age, 1960-2002
- The mainstreaming of the market
- Whence phytonutrients?
Market Size and Trends
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- Market size
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- Figure 8: Total U.S. retail sales of functional food and beverages*, at current prices, 2001-06
- Market trends
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- Figure 9: New product introductions with a functional or fortified positioning, 2001-06
Market Segmentation
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- Overview
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- Figure 10: FDM sales of functional food and beverages*, by segment, 2004 and 2006
- Functional beverages
- Functional foods
- Functional beverages
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- Figure 11: FDM sales of functional beverages*, by drink category, 2004 and 2006
- Juices and juice drinks
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- Figure 12: FDM sales of functional juices and juice drinks*, at current and constant prices, 2001-06
- Enhanced water/sports drinks
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- Figure 13: FDM sales of functional enhanced water/sports drinks*, at current and constant prices, 2001-06
- Energy drinks
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- Figure 14: FDM sales of functional energy drinks*, at current and constant prices, 2001-06
- Soy-based drinks
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- Figure 15: FDM sales of functional soy-based drinks*, at current and constant prices, 2001-06
- Teas
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- Figure 16: FDM sales of functional teas*, at current and constant prices, 2001-06
- Smoothies/yogurt drinks
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- Figure 17: FDM sales of functional smoothies/yogurt drinks*, at current and constant prices, 2001-06
- Functional food
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- Figure 18: FDM sales of functional food*, by food category, 2004 and 2006
- Bakery and cereal
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- Figure 19: FDM sales of functional bakery and cereal products*, at current and constant prices, 2001-06
- Bars and snacks
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- Figure 20: FDM sales of functional bars and snacks*, at current and constant prices, 2001-06
- Dairy and margarine
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- Figure 21: FDM sales of functional dairy and margarine*, at current and constant prices, 2001-06
- Other processed foods
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- Figure 22: FDM sales of other processed foods*, at current and constant prices, 2001-06
Supply Structure
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- Foreign Trade
- Companies and Brands
- Total functional food and beverages FDM sales by manufacturer
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- Figure 23: Top manufacturer FDM sales of functional food and beverages in the U.S., 2003 and 2005
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- Figure 24: Manufacturer brand sales of functional food and beverages in the U.S., 2003 and 2005
- Brand sales by segment for functional beverages
- Juice and juice drinks
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- Figure 25: Manufacturer and brand sales of functional juice and juice drinks, 2003 and 2005
- Enhanced water/sports drinks
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- Figure 26: Brand sales of functional enhanced water/sports drinks, 2003 and 2005
- Energy drinks
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- Figure 27: Brand sales of other functional energy drinks, 2003 and 2005
- Soy-based drinks
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- Figure 28: Brand sales of functional soy-based drinks, 2003 and 2005
- Tea
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- Figure 29: Brand sales of other functional tea, 2003 and 2005
- Smoothies/yogurt drinks
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- Figure 30: Brand sales of functional smoothies/yogurt drinks, 2003 and 2005
- Brand sales by segment for functional foods
- Bakery and cereals
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- Figure 31: Brand sales of functional bakery and cereals, 2003 and 2005
- Bars and snacks
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- Figure 32: Brand sales of functional bars and snacks, 2003 and 2005
- Dairy and margarine
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- Figure 33: Brand sales of functional dairy and margarine products, 2003 and 2005
- Other processed foods
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- Figure 34: Brand sales of other functional processed foods, 2003 and 2005
- Company Profiles
- PepsiCo
- Kellogg Co.
- Coca-Cola Co.
- General Mills
- Kraft Foods, Inc.
- Emerging brands
Advertising and Promotion
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- Introduction
- PepsiCo
- Tropicana promoted in traditional fashion
- Quaker focuses on heart health
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- Figure 35: Quaker Oats TV spot featuring marathon runner, 2006
- Propel ads are Zen-like
- SoBe strategies depend on the product
- Kellogg Co.
- Smart Start addresses women’s heart health
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- Figure 36: Kellogg’s Smart Start TV spot with cool mom, 2006
- Morningstar Farms promotions encourage product trial
- Coca-Cola Co.
- Minute Maid targets women’s cardiovascular health
- POWERade has conventional sports drink support
- Dasani is a thirst-quencher
- Odwalla positioned as independent, maverick
- General Mills
- Cheerios continues cholesterol theme
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- Figure 37: Cheerios TV spot featuring cute kid, 2006
- “Joe” loves the taste of Oatmeal Crisp
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- Figure 38: General Mills Oatmeal Crisp TV spot featuring “Joe,” 2006
- Yoplait and 8th Continent support women’s causes
- Group Danone
- Dannon brings probiotics to TV—targeting adults and kids; Stonyfield Farm owns the environmentally conscious space
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- Figure 39: Dannon Activia TV spot featuring mom, daughter, and parrot, 2006
- Figure 40: Dannon Activia TV spot featuring roommates, 2006
Retail Distribution
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- Introduction
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- Figure 41: FDM sales of functional food and beverages, by channel, 2003 and 2005
- Functional beverages
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- Figure 42: FDM sales of functional beverages, by channel, 2003 and 2005
- Juices and juice drinks
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- Figure 43: FDM sales of functional juces and juice drinks, by channel, 2003 and 2005
- Enhanced water/sports drinks
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- Figure 44: FDM sales of enhanced water/sports drinks, by channel, 2003 and 2005
- Energy drinks
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- Figure 45: FDM sales of energy drinks, by channel, 2003 and 2005
- Soy-based drinks
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- Figure 46: FDM sales of soy-based drinks, by channel, 2003 and 2005
- Tea
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- Figure 47: FDM sales of functional tea, by channel, 2003 and 2005
- Smoothies/yogurt drinks
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- Figure 48: FDM sales of smoothies/yogurt drinks, by channel, 2003 and 2005
- Functional foods
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- Figure 49: FDM sales of functional foods, by channel, 2003 and 2005
- Bakery and cereal
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- Figure 50: FDM sales of bakery and cereal, by channel, 2003 and 2005
- Bars and snacks
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- Figure 51: FDM sales of bars and snacks, by channel, 2003 and 2005
- Dairy and margarine
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- Figure 52: FDM sales of dairy and margarine, by channel, 2003 and 2005
- Other functional foods
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- Figure 53: FDM sales of other functional foods, by channel, 2003 and 2005
The Consumer
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- Introduction
- Summary of consumer behavior and attitudes
- Most important consumer groups
- How various consumers approach the category
- Marketing imperatives
- Purchasing behavior by highly committed consumers
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- Figure 54: Purchase of functional foods or beverages in the past three months, September 2006
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- Figure 55: Purchase of functional foods or beverages in the past three months, by gender, September 2006
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- Figure 56: Purchase of functional foods or beverages in the past three months, by age, September 2006
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- Figure 57: Purchase of functional foods or beverages in the past three months, by household income, September 2006
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- Figure 58: Purchase of functional foods or beverages in the past three months, by race/ethnicity, September 2006
- Functional food consumers
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- Figure 59: Functional foods purchased, September 2006
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- Figure 60: Functional foods purchased, by gender, September 2006
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- Figure 61: Functional foods purchased, by age, September 2006
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- Figure 62: Functional foods purchased, by household income, September 2006
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- Figure 63: Functional foods purchased, by race/ethnicity, September 2006
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- Figure 64: Functional foods purchased, by number of people in the household, September 2006
- Frequency of consumption of functional food
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- Figure 65: Frequency of functional food consumption, September 2006
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- Figure 66: Frequency of functional food use, by age, September 2006
- Reasons for functional food purchases
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- Figure 67: Reasons for buying functional foods, September 2006
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- Figure 68: Reasons for buying functional foods, by gender, September 2006
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- Figure 69: Reasons for buying functional foods, by age, September 2006
- Functional beverage consumers
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- Figure 70: Functional beverages purchased, September 2006
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- Figure 71: Functional beverages purchased, by gender, September 2006
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- Figure 72: Functional beverages purchased, by age, September 2006
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- Figure 73: Functional beverages purchased, by race/ethnicity, September 2006
- Frequency of functional beverage consumption
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- Figure 74: Frequency of functional beverage consumption, September 2006
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- Figure 75: Frequency of functional beverage consumption, by age, September 2006
- Reasons for functional beverage purchases
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- Figure 76: Reasons for buying functional beverages, September 2006
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- Figure 77: Reasons for buying functional beverages, by gender, September 2006
- Attitudes towards functional foods
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- Figure 78: Attitudes towards functional foods, September 2006
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- Figure 79: Attitudes towards functional foods, by gender, September 2006
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- Figure 80: Attitudes towards functional foods, by household income, September 2006
- Reasons for not purchasing functional foods or drinks
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- Figure 81: Reasons for not purchasing functional foods or beverages, September 2006
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- Figure 82: Reasons for not purchasing functional foods or beverages, by age, September 2006
Future and Forecast
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- Future trends
- Health-consciousness drives the market
- Obesity epidemic provides opportunity
- Hispanic consumers under-targeted
- Marketers must encourage use
- The medical community focuses on medicine
- Consumers want to feel good
- A shakeup?
- Market forecast
- Functional food and beverages
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- Figure 83: Forecast of total U.S. FDM sales of functional food and beverages, at current and constant prices, 2006-11
- Functional beverages
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- Figure 84: Forecast of U.S. FDM sales of functional beverages, at current and constant prices, 2006-11
- Functional food
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- Figure 85: Forecast of U.S. FDM sales of functional food, at current and constant prices, 2006-11
- Forecast factors
Appendix: Trade Associations
Appendix: New Product Briefs
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- Triple Leaf Tea: Sugar Balance
- WholeSoy: Organic Soy Frozen Yogurt
- Stonyfield Farms: All Natural Enlighten Yourself Yogurt
- Kmart: Champion Breed Dog Food
- Bumble Bee Foods: Prime Fillet Chicken Breast
- Wegman’s: Soy Infant Formula
- Kellogg’s: Smart Start Healthy Heart
- Olivio Premium Products: Spreadable Butter
- Kashi: Vive Probiotic Digestive Wellness Cereal
- Ross Products: Ensure
- Bimbo Bakeries: Oroweat Whole Grain and Flax Bread
- Powerbar: Pria
- Jugos De Valle: RTD Juices
- Dannon: Activia
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