Opportunities in Functional Nutrition
20 Jul 2021 | Innova Market Insights
The ongoing trend toward proactively managing health and well-being has been brought into sharper focus by COVID-19. As consumers embrace healthier ways of living, the opportunities for the food and beverage market to support improved nutrition are growing. Lu Ann Williams, Innova Market Insights’ global insights director, presents the developments and opportunities in the realm of functional nutrition.
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Hi, everyone.
I'm Louanne Williams.
I am the Global Insights director here at Enova.
I'm going to spend the next 20 minutes or so talking to you about what we see happening in functional nutrition today.
I think we've really come full circle, in the mid 1990s is when we really saw.
The beginning of marketing on, on food benefits, you know, we had Snackwells was launched in the US and that really started, you know, all the communication around low fat.
In Europe, Yakult was launched.
Around that time, and that's when we really saw the emergence of all the benefits like, you know, around fiber and, and gut health and probiotics and prebiotics and so on.
So we really have come full circle.
We went through about I don't know, 15 years of a real focus on natural and clean label, that's still there as , but there's definitely, huge interest in consumers, and functional health.
So today I'm going to talk about three things.
First, we're going to look at this whole idea of holistic health.
Consumers definitely have a more holistic view of what health means, that it's mental as as physical.
It can be energy, all kinds of things.
I'll talk about that.
The overall positive nutrition trend, and really this focus on the functional benefits.
And then, really, the last part, the, this whole idea about boosting your body's resilience has really been amplified by the past, by the, by the past year and what's happening around COVID.
So we'll start with looking at a holistic approach to health.
Starting out, we'll look at, yeah, really we see some generational divides here.
So we've looked, we did a lot of consumer research and we looked into what benefits are different generations looking for.
So the younger ones are more interested in physical appearance, performance.
These are really the consumers that drove what happened in, in protein, for example, they're most willing to change what they eat.
So you can see here, Gen Z, really interested in physical appearance, but also sports performance.
Millennials, you know, really active lives, they're looking for energy, to, to keep them going.
And then Gen X and boomers, are more looking at very targeted benefits.
So, Gen Xers, of course, you're in certainly that super busy part of your life with kids and Aging parents and so on, so things like immunity, sleep, mood enhancement are really important.
And then for boomers.
That's when you start to, I'm kind of doing air quotes, your problem starts.
So it might be joints, it might be not being able to, to stay asleep, things like that.
So, Yeah, there are definitely really clear generational preferences and needs when it comes to health benefits.
There's also differences regionally.
So, we also asked, we asked consumers across 10 countries, you can see them across the bottom.
And we asked who chooses products that are find it important to choose products that boost nutrition, or benefit different body functions.
The split here is what we always see.
So you can see countries China, Mexico, Brazil, India, Indonesia there is massive interest in What we call active nutrition, looking for products that have benefits and ingredients that really support those benefits.
Indonesia usually is the, is the top when it comes to to nutrition claims on packages and interest from consumers.
And then Europe and North America, a little bit lower, but still a lot of interest in these benefits.
Another thing that we see happening is that trends are really starting to collide when it comes to these functional food launches.
This is a nice example to illustrate that.
It's a range of plant-based foods.
They're nutritional supplements, and they really support two things a plant-based lifestyle, but also with very targeted performance benefits as.
So that's another thing that you're going to see as I go through these slides today.
Also looking at what's happening over the past 5 years, we've measured and looked at functional nutrition launches, and you can see that there's been a nice steady increase, and it really picked up last year.
And, and again, we expect to see this continuing as the Yeah, the effects of, of, of COVID continue.
We asked consumers also, how important are the following methods of staying healthy.
So we asked, there were a whole bunch of big long list, but you can see that 40% said good and positive nutrition, more important even than than dieting.
The, the box here in the middle on the right.
This comes from our, our mega trends, and one of our consumer trends is this whole idea of holistic -being.
So consumers definitely have an idea now that it's not just about your physical health, it's about All kinds of things.
It's about your physical security.
It's about food safety.
It's about the physical benefits, you know, and I mentioned some of those.
It could be, you know, having the energy to get through the day or boosting your immune system, but also this whole idea of, of mental fitness is really important.
So, COVID is definitely also amplifying this.
And then you can see there that 28% of consumers across those 10 countries again said that they were consuming foods and beverages to improve their physical health during COVID, and they expect to continue.
So people keep asking me what's going to stick.
So functional foods are going to stick for a good long time, that's for sure.
And now we'll start off talking about the positive nutrition trend.
So we asked consumers in the recent months, have you purchased any of these?
And we gave them a big long list of foods and beverages that have specific benefits.
And here are the top three responses for just a few countries.
So hydration topped the list in the US and then in China, but you also see their immunity in all three countries.
Energy really important in the US.
Interesting that you see physical appearance in Germany, and then, of course, China, as I mentioned before, Asia, Latin America, lots of interest in, in functional benefits, and here digestive health made the top three.
And then just some some nice examples, beverages is always a great way to introduce functional benefits.
So this is an electrolyte drink in the US that also contains vitamins and botanicals.
So there you have those trends colliding there, those benefits colliding, also with an immune health claim.
Botanicals and immune health are certainly going to be a winning combination in the next, the next 11, 234 years.
And then a nice example there from our newsletter that we write about a probiotic, a lactic acid bacteria that is specially made to make, to make it to the end of your digestive tract.
So these are some of the things that we see happening to meet the consumer needs that you see here.
This is a lot of information, so really just let's go down and focus on the bottom right quadrant of this.
So we're trying to figure out which functional benefits are starting to emerge and what's growing fast.
So, you see a high source of protein, high source of fiber, established, been around for a very long time.
So we're always trying to figure out what's coming next.
So we looked at the at the claims that were growing on food and beverage launches, and that is on our x axis.
This is what is growing the fastest.
And the y axis is the penetration, so the number of products and the size of the bubble is the is the number of the number of product launches.
So you can see some of the emerging ones are those very functional benefits, things like DHA, prebiotics, immune health, brain health, probiotics.
So these are some of those.
In some ways, they're the, the ones that are back from the middle of the 1990s.
There was a huge interest in, and really when prebiotics, probiotics were introduced to consumers at that time, DHA as.
But, but again, you can see they're back.
So, relatively low, penetration and number of products, but growing very fast.
So these should be the emerging winners.
Of of new benefits.
And then just to focus in on the microbiome, if, if I had to bet my money on something, this would certainly be one that I would put a big bet on for the next 20 years.
It's back.
It's not just about gut health, but it's, I think now we're starting to see the science emerge about what can different probiotics do, what kind of benefits can they bring.
I think every time you open the newspaper or, you know, in the B2B world, there's a headline.
We just put a few of those here, even the Wall Street Journal magazine.
I had a, had an article on what, what is your microbiome.
There's testing services, so again, this is also gonna be supported in that whole drive towards personalized nutrition and finding those benefits that you need.
But you can see here already that 40% of consumers tell us that having a healthy gut or a microbiome is very important for immune health.
So, it'll be super interesting to see what kind of benefits, Emerge out of this and, and what will be, promoted.
And then I think, one of the nicest examples I've seen here is Goodbelly.
So they established themselves in the US with the little, the little shots, and this is a really interesting format.
So it really comes from like OTC.
So again, this collision of, in this case, different categories.
And it's a little easy melt, probiotic that just dissolves, in your mouth, and you can see the different benefits there, one, digestion, one immunity.
So, definitely one to watch and follow and see what happens.
And then just diving into this a little bit further.
So again, in terms of the different benefits, so again, this is, a couple of headlines, from the website Nutrition Insight.
So here's one, a story about looking at, Joint inflammation, skin and joint inflammation being related to sugar and fat.
And then we just took a quick look to see if we looked at products that had a digestive or a gut health positioning, and then some type of sugar-related claim, you can see that if we look at the two periods, 2016 to 2017 versus 2020 to 202021, we definitely see an increase.
In those types of product launches, so this really supports what we see in that headline as an area that is starting to grow and also looking at in terms of anxiety related to gut health, and there's a story there looking at a gauze that's being made by Fries and Campia.
So again, this is definitely an emerging area, but I think something that would absolutely resonate with consumers.
And a nice example there of a brand that has been Producing all kinds of little snack products that have really specific functional benefits, and this one is also has a probiotic, but related to, in this case, immune health, but also it says benefits for skin conditions and also mental health.
So, this is a good indicator of things to come.
OK, now we'll move on to that 3rd box I mentioned and looking at overall resilience.
So we asked consumers what types of things they were looking for, and there's a just a list there on the left seeking happiness, constant stress is an issue, young consumers also feeling a lot of stress, feeling tired, problems sleeping, and looking for ways to alleviate that.
And again, in terms of what's happening and what we expect to continue to happen, this is a fantastic way to illustrate that a product from Pepsi.
So also interesting that we have such a big player invested in in products like this.
So this is a sparkling functional water that has different benefits that for stamina and relaxation.
So if you see there on the products, there's one with L-theanine and one with with genseng.
Again, this is also the, the trends colliding.
So, botanicals related to, you know, as a natural clean label source of a benefit, in this case.
OK, this is another kind of busy chart, but we can just focus in on the key things here, and this comes back to that whole idea of holistic -being and looking at different mood platforms.
This is one of our top 10 trends as , that mood will be a new occasion.
So we asked consumers, are you interested in purchasing products that have the following mental or emotional benefits?
So brain health was number one.
Followed by mental stimulation and then helped me feel happy and I'm sure if we broke this down there would also be generational divides here.
But again, looking at growth versus number of product launches, you can see that mind function, concentration, beauty, calming, relaxation, these are some of those benefits that are not as established but are growing very fast.
So something to look out for there.
And then looking at some of the products that are already doing some of these things.
So on the left there you see functional ingredients that are there to ignite the brain.
The one on the top.
So this is again just thinking about how all these trends are layered in together.
So this is a plant-based gelato, so an indulgent product that also contains a natural ingredients.
So it has tiger nut flour.
It also has adaptogens, but the claim is to leave your gut as healthy as your taste buds.
So you can imagine that this appeals to quite a young consumer.
And then the product on the bottom.
Is from Kirin in Japan and it has beta lactolin, and again, this is a product really specifically targeting their super aged society with memory supporting benefits.
So again, two different ways to approach different generations.
And then a really interesting one is, hard seltzer definitely just, it is the drink of the summer.
It really emerged in the US or powered ahead last year and now, If you look across Europe this summer, you see a lot of it.
And so it's interesting that opens up a whole new world of what else can we do with, with sparkling water.
So, consumers, you know, were looking for a way to drink something healthier, maybe drink less, sugary drinks and something that was lighter.
So that was an obvious choice.
Then, OK, let's put some alcohol in it.
So we had hard seltzers, and now we see, here's a couple of examples of Sparkling water or seltzer, being used to carry functional benefits.
So, super interesting that Perrier have an energy version, and again, you can see caffeine yerba mate.
So again, those collision of trends there, natural ingredients supporting the, the benefit.
And then another, drink that was launched in the US that has Lion's mane, and again, there's Ltheanine again to boost your mind, and help you focus.
So of course the one thing that everybody always wants to know is what's next.
So, in terms of what we see happening next, so we think functional foods are just gonna power on ahead post-COVID.
And I mentioned, especially in Asia and Latin America, these are regions where consumers are very, very interested in beverages that have, functional, very positive, active health, benefits.
I think I mentioned many times today this whole idea about the hybridization of benefits.
So there's definitely an opportunity for products to carry multiple claims.
Also, you know, look at that plant-based is certainly one of the biggest trends, clean label here to stay.
So how do you now take some of those ingredients that also bring those benefits?
And, and talk to consumers about that.
So, there will be multiple claims on these products.
And then mental health is definitely a differentiator.
When we put that on our trends, I think we had it on there last year and the year before as , this emergence of, As food being really important for your mood, and I think that's another one that COVID absolutely amplified that because we couldn't go out.
So food became a source of our entertainment.
It became, I know, speaking as a consumer myself, it was, we ate a lot of family meals, tried a lot of different things.
It became a great way to create a social opportunity, make us feel happy.
But then there's the also very functional side of that as and the benefits that consumers are looking for.
So look for those opportunities to differentiate around different mood platforms, as.
So I know I flew through that very fast, but I have to say I found that this is such an interesting, collection of slides that I, I hope, I think you will all find some inspiration, but I hope everybody has some great ideas, and that you can go off and do the next big thing.
Thanks for watching.
