This article on functional foods and beverages is taken from the latest edition of 1750 – a magazine by Finlays. Read the full magazine here.
What are Functional Foods, Beverages and Nutraceuticals?
Levon Kurkjian is a strong believer in the idea that “food is medicine”. Over the last 10 years, the 45-year-old from Boston, Massachusetts has built healthy eating into his daily routine. “I started drinking green tea on a daily basis around seven years ago for the antioxidants, immunity support and natural energy,” says Levon. As well as green tea, Levon regularly partakes in a wide range of food and beverages that offer health benefits. “A shot of fire cider for an immunity boost via improved gut health; red ginseng tea for mental clarity. I’m not always focused on a particular benefit, but I’m definitely attracted to products that promise health and wellbeing benefits.”
Levon is just one of a rising number of global consumers interested in the idea that what we eat and drink can offer more than simple sustenance and nutrition. That food and beverages can offer “functional benefits” to our physical or mental health and wellbeing. And while this idea isn’t new (in fact it’s ancient), it’s making huge waves in the world of food and drink.
Functional Foods and Beverages market size: A once in a generation trend?
While the term itself isn’t yet widely used by consumers, functional foods and beverages have been growing rapidly for some time, driven by the global health and wellbeing megatrend.
Today, six in ten (58%) global consumers actively seek healthy products, increasing from just 42% in 2016. In response, launches of functional food and beverages increased 171% between 2010 and 2020. That’s compared to just 75% growth across all food and non-alcoholic beverages.
Alyssa Hangartner, Flavour and Ingredient Trends Analyst at Mintel believes that functional foods are now finding their place in consumers’ routines. She says: “Increased emphasis on improving lifestyle habits and the definition of wellness on a personal level has left plenty of room for food and beverage innovation to meet consumers’ needs where they need it most. Functional food and drink will play a powerful role in consumer desires to build up immunity, manage daily stresses and incorporate ingredients that will support long-term health.”
Siân Edwards, Finlays Group Insights Manager, believes that the growth in health and wellbeing is “so sustained and with such broad appeal, that functionality is more than just a key trend or fad. It could drive the food and beverage industry for a generation”.
Using Functional Foods as Natural Medicines
The concept of functional foods isn’t new. In fact, it’s ancient. The Greek physician Hippocrates (of Hippocratic Oath fame) is thought to have coined the phrase “food is medicine”. And even earlier, we know of food items being used medicinally, such as tea in ancient China. It was in the 1980s, when the modern conception of “functional foods” was established. The Government of Japan created a class of “functional foods” that offered health benefits that went beyond basic nutrition.
Finlays’ Principal Innovations Scientist Dr. Maximilian Michel offers a contemporary definition: “Functional food and beverages can be broadly understood as offering, or being believed to offer, some kind of physiological benefit thanks to the presence of bioactive compounds. For example, people might drink green tea because it contains polyphenols which they associate with cardiovascular health, weight management and immunity.”
Today, functional foods and ingredients are sought by consumers for a vast array of physical and mental health benefits, including weight loss, cardiovascular health, boosting immunity, gut health, improved focus, better sleep and reduced stress.
While products that offer more established benefits, such as added vitamins or probiotics, remain popular, there is increasing consumer awareness around the benefits of fermented foods, adaptogens, and different types of antioxidants, such as catechins. These are starting to break free from the confines of the health and wellness niche, and gradually entering mainstream consciousness.
Bridging the Perception Gap on Functional Foods
For all the exciting growth, functional foods and beverages are closely regulated, and their actual efficacy often requires further research. Dr. Rhodri Evans, Head of Food Safety and Regulatory Affairs at leading consulting firm Exponent, who specialises in this area, explains: “There is a great deal of interest among food producers in providing more information to consumers on the potential health benefits of foods and their constituents, but it is important to ensure the information presented is accurate, can be substantiated, and is not misleading.”
He continues: “In the European Union and United Kingdom, any health claim made on a food must be authorised before use. In other parts of the world there are more opportunities to present information on the health benefits of foods and in Japan in particular there are a number of FOSHU (foods for specified health use) claims, including ones related to tea and bioactive tea constituents, that can be used on products.” Dr. Maya Zuniga, Group Innovation Director at Finlays adds: “Functional foods are a really exciting area of research, since they cover such a vast array of foods and ingredients. But categorically proving the direct health benefit of a food is challenging due to the needed intensive (and expensive) clinical studies. Without supporting clinical data, it is difficult to validate a claim from a regulatory point of view. This is why it’s quite rare to see products make specific health claims.”
She continues: “From a brand owner’s point of view, bridging this gap is a delicate balance. Most on-pack claims tend to focus on the presence of specific ingredients or bioactive compounds, which consumers associate with health benefits, and let them draw their own conclusions.”
A Healthy Value Driver
While words like “EGCG” and “Adaptogens” aren’t currently mainstream, consumers are becoming increasingly knowledgeable about linking individual ingredients to health benefits.
Siân Edwards explains: “The very definition of ‘health’ has continually evolved, from getting your ‘five a day’ to a more holistic concept, with a proactive approach to physical, mental and environmental wellbeing. This has driven the recent wave of functional foods, including everything from trending superfoods, pro/prebiotics for gut health, functional ingredients to alleviate stress, adaptogens and plant-based diets. While consumers may not always understand the specifics, buzzwords and trending ingredients are increasingly important, particularly when you factor in the influence of social media.”
Edwards is also keen to the close link between functional benefits and premiumisation. She continues: “What is exciting about functional foods and beverages entering the mainstream is the numerous studies suggesting that consumers are highly willing to pay a premium for healthy and functional products, and even more so among younger generations. It’s a value driver that promises long-term growth.”
Holistic Lifestyle
The idea of “food as medicine” has traditionally centred on the concept of a balanced diet, and this remains true today.
In his best-selling book The Diet Compass: the 12-step guide to science-based nutrition for a healthier and longer life, science journalist and author Bas Kast set out to take an evidence-based approach to diet in the 21st century. Speaking to 1750, he explained that his approach to healthy eating is focused on real food: “How it comes out of nature. In its holistic, unprocessed form. Like vegetables, legumes, nuts, fruit. It’s the food we have been adapted to throughout millions of years.” Given The Diet Compass has sold over a million copies worldwide, it is clear this idea resonates strongly.
The Confluence of Food and Medicine
But many health-conscious consumers are also now seeking products that fit easily into their lifestyle. Products that taste good, contain functional ingredients, but come in convenient, innovative and novel formats too.
Take the example of green tea. A cup of brewed green tea is rich in the family of antioxidants known as polyphenols. Catechins belong to this family and the most well-known catechin is EGCG (Epigallocatechin gallate). EGCG is increasingly linked by consumers to a range of health and wellbeing benefits, and particularly cardiovascular health and weight loss.
But today’s consumer doesn’t need to drink brewed green tea to consume catechins – they can do so from a dizzying array of products and formats. That could be an RTD, a shot, a gel or even a food item.
As Rachel Jones, Finlays’ Group Head of Business Development explains: “We’re seeing a blurring of boundaries between medicine, nutraceuticals and food. Within this, we’re seeing a change in delivery system from traditional foods and supplements to foods that have added functional properties.” According to Jones, the confluence of food and medicine represents an exciting opportunity for brand owners. “Today’s consumers have a huge appetite for convenience. By creating products that seamlessly build functionality into their consumers’ lifestyles, brand owners can unlock huge value.”
A World of Possibility with Functional Foods and Beverages
This pivot towards consumers not just seeking naturally functional foods, but also foods with added functionality, opens up a world of possibility for brand owners. Today, brand owners can choose from a wide selection of ingredients that add functionality to their products. That could be vitamins, probiotics, or the inclusion of other bioactive compounds such as catechins. But according to Dr. Michel, not all functional ingredients are created equal.
He explains: “One debate in the arena of functional foods and beverages is around how bioactive ingredients show the same effect when isolated as compounds in powder or pill form, as they do when present in their original food. There is evidence to show that the absorption of bioactive compounds in the body is strongly correlated to their bioavailability. This ultimately leads to the conclusion that one should consume functional foods as little processed as possible.”
For that reason, according Dr. Michel, using ingredients in the right way could be particularly advantageous. He says: “When processed in the right way, ingredients can actually achieve a higher concentration, but the trick to doing so is using a natural process.”
A natural choice
The link between “healthy” and “natural” is also well established in the mind of the global consumer, with 70% equating the two concepts. Rachel Jones believes that natural claims are an increasingly critical part of a functional product’s proposition. She explains: “Healthy and natural go hand in hand, so when a consumer is looking for a healthy product, they’re also looking for a natural product. That makes clean-label, free-from, natural, organic claims powerful differentiators in the functional category.”
Tea extracts – The Forgotten Nutraceutical Beverage
According to Jones, the demand for products that are both functional and natural, makes tea an exciting ingredient for brand owners to consider – and not just in beverages.
She explains: “Tea is this incredible plant that’s rich in antioxidants and has been used as a medicine for thousands of years but is often still seen as ‘just a drink’. What we’re seeing now is consumers switching back on to the idea of tea as a natural source of functional benefits. That’s why at Finlays, we think about tea as the forgotten nutraceutical. The trick is finding how best to harness the antioxidant power of tea, in a natural way.”
Where next for functional foods?
As the functional foods and beverages trend picks up speed, where might it go next? Many suggest a trend towards personalisation. Specifically, personalisation of solutions to the individual and their specific health and wellbeing goals. Journalist and author Bas Kast explains: “I think in the future, genetic testing might enable more personalised recommendations. Keep in mind that today’s recommendations are largely based on the average findings from studies. But we do know that people react very differently to the same food. For example, we know that some will have a blood sugar spike from banana but not from a cookie, while for person two it might be exactly reversed. So, a more personalised approach would be great for the future.”
Siân Edwards agrees and believes that brand owners might start segmenting consumers not just on their demographics and ethnography, but on their health needs too.
She explains: “Customisation has been emerging as a major driver in the beverage industry for a number of years. However, advances in technology are enabling companies to develop highly personalised products based on unique customer information such as DNA. In the future, this could look like food grown for specific consumer needs, driven by a culture of continuous health monitoring and mass customisation, not mass consumption”.
For Mintel’s Alyssa Hangartner, the future lies in enabling consumers to “effectively and affordably commit to routines, products and habits that contribute to holistic wellbeing”. She continues: “This can be a two-way street: brands typically known for indulgence that consumers turn to emotionally can tap into nutrition, and everyday products like water or coffee can lean into relaxation and stress reduction”.
One thing’s for sure, functional foods and beverages are a huge trend, and we can expect to see high levels of innovation that bring functional foods not just into the mainstream, but into daily life as well. As exciting as the growth in functional foods is, we might only just be getting started.
This article is taken from the latest edition of 1750 – a magazine by Finlays. Read the full magazine here.
Illustration: Corina Alvarez Loeblich