Health related and functional foods show year-on-year growth

HEALTH-RELATED and functional foods are continuing to drive growth in the global food and drinks market, according to three new reports from LFI.

The reports, which concentrate on the functional foods, confectionery and dairy markets, show year-on-year growth in all three sectors, with functional foods in particular experiencing double-digit increases in value. €

New health-related lines in confectionery and dairy products are also largely responsible for continued growth in two relatively mature markets.

With ongoing product investment, market activity and considerable media attention, the global functional foods market continues to expand across most parts of the developed world.

New sectors are still emerging, while sales have received a further boost from the fact that many existing foods and brands have been repositioned and are now being marketed on a wider health platform.

• The International Functional Foods Market updates previous studies carried out in 2000 and 2004, and reports that sales of functional foods in the five major Western European markets, plus the USA, Australia and Japan, reached US$16.1 billion in 2005, of which Japan accounted for almost 36%. This uses a strict definition of products that make a specific health claim, whereas a broader definition results in a global market value of more than $36 billion.

Using the strict definition, products marketed on a gut health platform represent the largest sector, with sales worth $6.8 billion in 2005. This represents over 42% of the overall market, compared with 36% for heart health products. Applying the broader definition, the share of the total market taking by the two categories falls to just over 40%. By product sector, dairy products account for almost 43% of the global market, ahead of other categories such as cereal products (19%), beverages (14%) and fats and oils (12%).

Functional products are also apparent in the global confectionery industry, appearing in formats such as vitamin-enriched boiled sweets, breath-freshening mints and vapour-release chewing gum. Although it has reached maturity in many parts of the world, confectionery sales continue to grow, driven by rising demand from an increasingly affluent consumer base in developing countries such as Russia, China and India.

In the developed world, much of the market’s recent growth can be attributed to niche sectors, such as low-fat, low-sugar, organic and Fairtrade, as well as functional products.

• The Global Confectionery Market – Trends & Innovations provides an analysis of the confectionery industry worldwide. In 2005, it was worth an estimated $119.6 billion, up by almost 19% on 2001.

During this time, the market increased by almost 13% in volume terms, reaching almost 15.7 million tonnes, and by 2010 market value is expected to be worth over $145bn, with volume forecast to rise to over 17.8 million tonnes. Western Europe and North America account for the bulk of the sales, and they also have the highest per capita consumption – for example almost 15kg in Denmark, Ireland and Switzerland.

However, many of these markets have seen static or falling consumption levels in recent years, with sales having been adversely affected by consumer health concerns.

All three of the market’s sectors are primarily contested by a handful of major companies such as Cadbury, Mars, Nestle and Wrigley.

• Key Players in the Global Dairy Industry provides in-depth profiles of 34 of the world’s largest dairy companies. Of these, 22 completed mergers or acquisitions during 2003, 19 in 2004 and 16 in 2005. Like confectionery, the global dairy industry has been characterised by consolidation among the major players in recent years.

Globalisation remains a key priority for many of the larger dairy firms worldwide, and most already operate across a wide range of markets and countries.

Brands are also becoming more international, with the result that many suppliers are slimming down their ranges to focus on a few key product areas, and recent new product activity has featured the incorporation of healthy ingredients, as well as the development of more convenient forms of packaging.

The level of corporate activity remains high, with recent examples including Campina’s acquisition of the butter specialist Aveve Zuivel and Danone’s establishment of the Stonyfield Europe subsidiary focusing on organic lines.

Other major dairy firms profiled include Arla Foods, Fonterra, Dairy Crest, Lactalis and Dean Foods.


Volume 40, Number 7
September 2006
ISSN 0967 - 0908
http://www.leatherheadfood.com