As the US dietary supplement market continues to flag - a brief look at the results of many of the supplement producers is testament enough to that - the functional food market is booming, according to a new report from the Nutrition Business Journal.
US sales of functional foods reached $18.5 billion (€21.2bn) in 2001, accounting for 3.7 per cent of the total food market of $503 billion. This is likely to increase even more in the next four years, with annual growth of around 5-7 per cent, before slowing thereafter to reach sales of $31 billion in 2010, according to the report.
The last decade of the 20th century saw an explosion in the number of new functional food products, with virtually every major food corporation introducing some kind of functional product - although some were more successful than others. But many companies believed - rightly - that the potential gains were well worth the investment in functional foods, as a successful product "provides corporations with one of their most powerful opportunities for brand differentiation", according to Patrick Rea, NBJ research director and author of the report.
"We tried to explore the development of functional foods over the last several years from a marketing catch phrase into a trend that is truly quantifiable and meaningful to consumers," Rea explained. "The report also captures just how deeply the concept of functional foods has penetrated the food industry."
For the purposes of the report, the US functional food market was divided into eight different categories and 37 subcategories, with sample products listed in each. Growth is forecast to 2010 for each subcategory. The report examines strategies used by food, ingredient, consumer health care, dairy and dietary supplement companies to create and market functional brands. Mergers & acquisitions are analysed as mainstream manufacturers and suppliers buy into functional categories.