Buying into bioactives

Prepared Foods, March, 2004 by Claudia Dziuk O'Donnell

* Unconditional support wanes for dietary supplements

* Interest in some nutraceuticals increase

* Foods and beverages are popular delivery vehicles for nutritionals

The political and social views in civilized society have a tendency (happily or unhappily, depending on where you stand) to move like a pendulum.

Few who follow the dietary supplement category would argue that the opinions of many Americans have swung away from what, half a decade ago, had been almost unconditional support for these products. Public pressure groups and elected officials are now calling for increased regulatory oversight using controversial "ephedra" as a rallying cry.

"Declining growth, price pressures, commoditization of particular products, intensifying competition, a skeptical media and an emerging sense that the health-motivated customer base may be approaching saturation all conspire to make the business of selling supplements more challenging," notes a 2002 Nutrition Business Journal release ... and the situation has little improved since then.

Yet, opportunities do exist for those offering nutritional products that maintain health or help to alleviate health conditions. The year 2003 saw many products striving to reach market segments defined by age, sex and/or health concerns. As has been predicted by many, consumers may lean towards products in familiar food and beverage formats. And, certain bioactive supplements well may have a very bright future.

Changing Consumers

So, for what are consumers looking? The Natural Marketing Institute's (NMI-Harleysville, Penn.) "Top 10 Trends of 2004" list notes there has been "nutritional maturation" among consumers, as they look for specific rather than general health benefits in a product. NMI reports that 66.0% of the general population completely/somewhat agree that vitamins and minerals are effective in preventing certain health conditions (down from 69.5% in 1999), and only 26.1% believe functional foods/beverages can be used in the place of some medicines (down from 35.6%). However, interest in food as a delivery vehicle for nutritional components is growing. Some 47.3% (up from 40.6% in 1999) believe fortified foods/beverages can be used to get daily vitamin requirements and 45.0% (up from 39.1%) completely or somewhat agreed that functional foods/beverages contain ingredients that positively affect a specific health function.

The NMI report also researches specific health conditions of concern to consumers. Cancer tops the list, with 77.2% of respondents saying they had a lot or a little interest in preventing this disease. "Vision problems" was a runner up (77.1%), followed by heart disease (76.6%), high cholesterol at (76.2%), hypertension (75.0%) and obesity/overweigh (74.2%). Arthritis, stress, lack of energy and osteoporosis follow in that order. However, except for those concerned about vision problems, fewer consumers indicated their interest in preventing the listed health conditions than indicated so in 1999.

Growth and Market Segments

Predictions on the growth of the dietary supplement market vary. In 2003, Nutrition Business Journal gave interim results for the U.S. supplements industry as $18.4 billion in total sales in 2002, with about 4% growth. Categories in the supplement market included vitamins, minerals, herbs, liquid meal replacements, sports and weight loss, and specialty supplements. Furthermore, a moderate growth of 3-5% through 2005 was predicted, along with the observation that this rate is still above that of the economy as a whole.

A July 2003 industry overview in the Chemical Market Reporter predicts overall growth to be only 1-3% through 2005, but bets specialty supplements such as glucosamine, probiotics, lutein and essential fatty acids will experience higher growth, some into the double digits, over the next few years.

A look at new products introduced into North America (Canada and the U.S.) in 2002 and 2003 supports that expectation. Glucosamine and lutein exhibit increased use, as does lycopene and tocotrienols, although the numbers are still small. Glucosamine is popular in pet foods. Nestle Purina PetCare's (St. Louis, Mo.) Puppy Large Bread Formula Food and Farnam Pet Products' (Phoenix, Ariz.) Joint Health Formula Chewable Tablets are two recent examples.

And, although media has much-maligned supplements, few products have suffered the damaged reputation of hormone replacement therapies, thus driving interest in alternatives. Women, in general, have fared better than men in regards to products formulated for their needs. Mintel International's (Chicago) GNPD records 89 "health care" products introduced in 2003 in North America that are positioned for women, versus only 27 items for men. Alta Source Nutraceutical's (Chamblee, Ga.) Maximum Androstene is just one example.

A closer look at supplement marketing efforts through age segmentations shows "the kids have it." The GNPD tagged 45 new products in 2003 for children five to 12 years old and 11 products for babies and toddlers four years and under. A recent example is BNG Enterprises' (Tempe, Ariz.) Gentle Care Gripe Water with ginger, fennel and chamomile. Some 12 new products were flagged for seniors (defined as those 55 and over), nine for adults in the 25 to 55 age range, and only three for those aged 13 to 25.