“Customers these days are better connected and better educated than at any other time in history,” says Rebecca Hall, brand marketing coordinator of Pervida, based in Blacksburg, VA. “Consumers want products that have ‘function’ you can feel and can back up their claims. The concept of ‘voting with your dollar’ is more relevant now than ever, and it’s not a coincidence that we’re seeing more craft-centric and cause-centric companies at this time than ever before.”
The rise of functional foods The emergence of the functional foods industry was influenced by the Food for Specified Health Uses (FOSHU) in Japan, recounts John Sauve, VP marketing and new business development at Artemis International, in Fort Wayne, IN. “While the term ‘functional food’ has been around since Japan first used it and somewhat classified its use in the 80s, it still remains open in the U.S. to interpretation by food and beverage marketers,” Suave notes. “Foods have been modified or fortified with traditional nutrients such as proteins, vitamins or minerals for a very long time. Milk was being fortified back in the 1920s.”
That said, today “functional food” is commonly defined as “any food or food ingredient that may provide health benefits beyond the traditional nutrients it contains” (3). And according to a report by Statista, the future of functional looks bright. The worldwide revenue for functional food is projected to increase from about $300 billion in 2017 to over $440 billion in 2022 (4).
The team at Mama Jean’s Market, WholeFoods Magazine’s 2018 Retailer of the Year, based in Springfield, Missouri, is seeing the trend. Margo Schwartz, wellness education specialist and social media/events coordinator, and Kelly Norman, general manager of Mama Jean’s, say the staff has received more inquiries regarding functional food and beverages and more requests for additional products than before.
As the functional food market expands, more unique products will start to emerge, says Dr. Josh Axe, DC, CNM, CNS, co-founder of Ancient Nutrition, based in North Palm Beach, FL. “As researchers continue to explore how superfoods like algae, beneficial mushrooms and turmeric impact health,” he says, “manufacturers are likely to find new and exciting ways to bring these beneficial compounds into other products.” Ancient Nutrition offers a variety of functional options such as Bone Broth Protein Powder and Multi Collagen Protein Bars, which the company says can help support healthy gut, skin elasticity, skin hydration, immune support and exercise performance.
Here, a look at 5 trends driving consumer interest:
1. Hemp/CBD Infusions “What really is on the horizon for functional foods and beverages other than hemp and CBD?” jokes Hall. Her company offers Pervida Calm, a functional CBD beverage. To be sure, data suggests the boom is just beginning, with the CBD market predicted to hit $22 billion by 2022 (5). As the natural food and beverage industry opens its arms to CBD, consumers are hyped up on the benefits functional foods and beverages may offer such as support for anxiety, insomnia, inflammation, chronic pain and more (6).
“There’s a growing body of evidence to show the effectiveness of engaging the endocannabinoid system with naturally occurring cannabinoids, like CBD, present in full spectrum hemp extract,” said Matt Seres, brand manager of Parker, CO-based Frangiosa Farms, makers of Colorado Hemp Honey. Something as simple as stirring honey infused with hemp into tea instead of regular honey can make an already-healthy sip even more beneficial.
As manufacturers start to incorporate CBD into their products, Jourdan Samel, co-founder and CEO of Evo Hemp, based in Boulder, CO, looks at the process as “something similar to that of fortifying your milk with calcium; it’s the natural progression of the CBD industry.” Samel says the company’s cookie dough protein bars and HempX Tincture, which can be added to any beverage for a functionsl boost, are a couple of their most popular products. Another new CBD trend offered by Evo Hemp and Forest Coffee Trading Co. is functional CBD cold brew coffee, made with cocoa or dark berry, 15mg of Native American grown evo hemp CBD extract, and Northern Thailand coffee beans.
Companies like CBD Living, based in Corona, CA, offer CBD-infused water, matcha, teas, chocolate, candy, and lozenges. Two Flowers IPA, brewed by Coalition Brewing Co. in Portland, OR, launched a CBD-infused India Pale Ale, and Sprig, a beverage manufacturer located in California, offers CBD-infused sparkling sodas (7). For more on CBD and hemp-based products, go here.
2. Gut Health As more research links the role of gut health with overall wellbeing, impacting everything from digestion to mental health, consumers are recognizing the importance of nurturing the gut microbiome with healthy bacteria, nutrients, and vitamins, and brands are meeting the demand by enhancing the nutritional benefits to popular foods and beverages. Ingredients like fiber, probiotics, digestive enzymes and more are driving functional food and beverage sales (1).
Suppliers and manufacturers are relying on their research and development teams to produce functional ingredients that up the benefit of popular foods. Natural Remedies, for example, offers Gutgard, a clinically researched bioactive for gut health that can be used in beverages, energy bars, and chews, explains Siri Sindhura, human healthcare products marketing representative at Natural Remedies, based in Karnataka, India.
Nextfoods Inc., a Boulder, CO-based manufacturer, offers functional food and beverages in a new line called Good Belly Probiotics that promote gut health. Ranging from probiotic bars, juice shots, infused beverages and protein shakes, these probiotic infused products promote microflora health, immunity and digestion (8).
For shoppers who want to avoid problematic ingredients like gluten without settling for empty calories, Smart Baking Co., based in Sanford, FL, has developed a patent-pending recipe combining protein, vitamins, minerals, healthy fats, water, and fiber used in its Smartcakes and Smartbuns. The cakes, which, as the company explains on its website, are the only FDA-approved designation of a “healthy cake,” have a low total calorie count of 38 and are rich in fiber, vitamins and minerals.
3. Shots + Sips Functional beverages were the fastest growing specialty food item over the past two years (1). And in a study by Packaged Facts, 8 in 10 consumers said they would drink more non-dairy beverages if they were fortified to deliver greater benefits.
“The same way that people have been focused on ‘eating their wellness’ for the past decade, they are now looking for the same benefits from their beverages,” says Edzra Gibson, VP brand marketing at good2grow, located in Atlanta, GA. “We’ve seen this frequently in our space, given parents are extending this focus on function to what they are giving their kids to eat and drink.” Having launched their Fortified Waters in 2018, good2grow combines the nutritional benefits of vitamin D and calcium to help support bone growth and strength.
Millennials, who make up one-third of the country’s population, are the vanguard of this movement, says Steve Fortuna, founder and president of Blossom Water LLC, in Westwood, MA. “Consumers increasingly want their food and beverages to help maintain their wellness, shying away from products that merely try to remedy health problems, striving instead to prevent such problems from ever occurring through dietary and lifestyle changes,” he adds. “They want their beverages to ‘do something for them.’ They want hydration with purpose. But with more expansive palates, borne of greater ethnic diversity and early exposure to variety, they simultaneously put a premium on novel and nuanced flavor experience.”
Blossom Water is an alternative to both plain water and sugary beverages. Containing postbiotics, 10 calories and infused with herbal mixes, the beverage comes in multiple flavors: mango hibiscus, lemon rose, plum jasmine, pomegranate geranium and grapefruit lilac. Postbiotics, like probiotics, help to keep the body’s immune system ready to fight off any foreign threats, says Fortuna. He adds, “When postbiotics are consumed regularly, the immune system’s various component parts stay ‘tuned up’ to allow for a quicker and more vigorous response to invading bad bacteria or viruses that can cause illness.” (For more on postbiotics, go here.)
Another new offering comes from Numi, Oakland, CA, which introduced a line of Daily Super Shots at Expo West. “Inflamm Away, Immune Support, Mind Tonic, and Energy Lift shots feature proven and potent organic teas, herbs, fruits, roots, and spices blended to maximize both flavor and function,” said Maria Emmer-Aanes, VP of marketing and sales. Convenient shots complement a busy routine for those focused on incorporating daily on-the-go wellness. The company uses several trending ingredients, says Emmer-Aanes, including elderberry, pomegranate, matcha, turmeric, ginger, fennel and apple cider vinegar.
Also upping the superfood status of beverages, Pervida uses functional ingredients and research to enhance their offerings. Pervida Immune, Pervida Sugar Harmony, and Pervida Calm offer benefits including boosting immune, blood sugars, and restoring relaxation, Hall says. “Pomegranate seed oil is a powerful anti-inflammatory, fig extract converts blood sugars to muscle fuel and full spectrum hemp oil uses CBD to aid in meditation.”
Yet another growing trend: “Infused teas have been very popular especially for consumers with pain. Joint pain primarily,” says Sandi Lynn, owner of Good 4 U Nutrition in Arnold, Missouri. “I have a construction man that shops at my store. I would say lower 50s age and he swears by Traditional Medicinals Moringa with Spearmint & Sage tea. He said he couldn’t even raise his arms above his head before drinking it.”
4. Plant Based “Plant protein fortification continues to trend as well finding its way in more foods—like desserts and snacks—rather than just supplements,” says Scarlett Full, MS, RDN, nutrition scientist at Growing Naturals, based in Marina Del Rey, CA. Partnering with Axiom Foods, supplier of plant protein powders, Growing Naturals’ popular A.M. and P.M. Energy plant protein SuperShake powders provide amino acids needed to build and support muscle, says Full. Other benefits include fiber, multivitamins, antioxidant vitamins C and E, and caffeine.
From plant-based beverages to meat substitutes, manufacturers are getting creative and consumers have a variety of choices. Items like vegetable spaghetti, cauliflower rice or pizza, spinach pizza crusts, and more, are filling the shelves. Plant-based dairy (excluding cheese, yogurts, and ice-cream), jumped 20%, and plant-based “meats” topped $585 million at the end of 2017 (2).
One of the latest entries into the category is an almond pizza crust, with plant protein, healthy fats, nutrient-dense and grain-free crust perfect for keto appetites. Other products sharing the limelight and giving familar favorites that might not be super-healthy a plant-based nutrient boost include NadaMoo’s plant-based dairy free frozen desserts, OWYN’s plant-based nutritional bars, and Spinato’s broccoli crust pizza.
5. Collagen The desire to look and feel younger has caused the market for dietary collagen to explode, with sales of collagen supplements reaching $46.6 million in 2018, an increase of nearly 34% over the previous year (9). Given the interest, collagen increasingly is being added as a functional ingredient to a variety of foods and beverages, including protein bars, teas, coffee creamers, and even baked goods.
Collagen is considered one of the most versatile and important ingredients in modern health and nutrition, including as a functional food, according to Lara Niemann, marketing director at Gelita, based in Sioux City, Iowa. Demonstrated in numerous clinical trials, she says, “collagen peptides effectively support metabolic turnover, they are an ideal source of protein for maintaining the health of the body’s connective tissue, bones, joints, skin, muscles, ligaments and tendons.” Consumers who are interested in healthy aging span diverse demographics. The goal is to provide the consumer with a health benefit, she explains, so it is particularly important for product developers to use proven ingredients with scientifically substantiated efficacy.
Some new collagen infused products on the market introduced at Expo West this past March included Vermont Village’s functional vinegar collagen drink, Bulletproof’s collagen cookie dough protein bar, and Ancient Nutrition’s multi collagen protein powders in vanilla, chocolate, cold brew and cucumber lime flavors. (For more on collagen, turn to page 40.)
Selling Functional Foods and Beverages From a retailer’s perspective, education is a key ingredient for selling functional foods and beverages. Many shoppers are already asking the staff at Mama Jean’s Market about functional foods. Some consumers, however, still aren’t familiar with the benefits of functional ingredients.
“We try to educate our customers via a couple different avenues,” Schwartz says. “One is consistent staff trainings so that they can in turn share their knowledge with our customers. The second is free public talks. When an expert on a subject visits us, we make sure to set up a public presentation for our community.”
Traditional methods like brand blocking, merchandising with literature, shelf talkers, and header cards all can make a difference when selling functional foods and beverages, adds Dr. Axe.
Organizing shelving with educational material and appropriate promotional coupons can boost sales, according to Hall. “Whatever the application, it is essential that the promised functionality of active ingredients is based on sound science and has been proven in high quality clinical studies.”
On the other hand, the process of selling functional CBD products may be different, Samel notes. “When it comes to CBD products in particular, we really need to lean on the retailers to tell their customers where to find these items and what they truly are. Because of the FDA’s recent regulations, companies have to be rather vague about their selling processes.” (Go here for more on CBD regulations and guidelines for retailers to follow when selling CBD.)
For manufacturers, Hall says, small, independent natural food stores are a great fit for selling functional beverages. “These retailers are used to seeing a wide range of health claims, and are happy to encourage consumers to seek more from their food.”
The Future of Functional The experts we spoke with agree that the market will keep expanding because consumers are investing in healthy diets. “Customers want products that have function you can feel and can back up their claims,” emphasizes Hall. Looking ahead, “these products also need to be widely accessible, affordable, and brands need to stand for the things they believe in.”
What’s more, says Suave, “The 2020 Dietary Guidelines for Americans might even recognize the role that ‘functional foods’ must start playing and how they are affecting the eating patterns of Americans.” He adds, “Food fortification will become more of a recognized and accepted nutritional marketing platform, driven and supported by the science and benefits of food functionality. Products will add and deliver another level of competitive advantage to win business and keep their products and brands on the shelf and in the daily diets of Americans.”
Emmer-Aanes, of Numi, expects a merging of health trends. The functional food and beverage industry, she says, will welcome more clean ingredients, fortified raw materials, plant power, convenient on-the-go packaging as well as ready to drink formats for functional beverages, and functional ingredients with condition specific blends. WFReferences
- International Food Information Council Foundation, “2018 Food & Health Survey,” foodinsight.org. Released 5/13/2018. Accessed 5/1/2019, www.foodinsight.org/wp-content/uploads/2018/05/2018-FHS-Report-FINAL.pdf.
- E. Sloan, “Top 10 Functional Food Trends,” Food Technology Magazine, 72(4). www.ift.org/Food-Technology/Past-Issues/2018/April/ Features/top-10-functional-food-trends-2018.aspx.
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- Statista Staff, “U.S. Functional Foods Market - Statistics & Facts,” Statista.com. Accessed 4/5/2019. www.statista.com/topics/1321/functional-foods-market.
- Market Watch Staff, “Cannabis Market Brief: Growing Number of Retailers Adding CBD Infused Products as Revenue Jump,” Marketwatch.com. Posted 4/11/19. Accessed 4/16/2019. www.marketwatch.com/press-release/cannabis-market-brief-growing-number-of-retailers-adding-cbd-infused-products-as-revenues-jump-2019-04-11.
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- BevSource Staff, “How Cannabis & Beverages Are Coming Together in the United States,” Bevsource.com, Accessed 5/1/2019, www.bevsource.com/news/how-cannabis-beverages-are-coming-together-united-states.
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- J. Santa Cruz, “Dietary Collagen — Should Consumers Believe the Hype?” Today’s Dietician, 21(3), 26, www.todaysdietitian.com/newarchives/0319p26.shtml.