This briefing has highlighted the growth in many functional beverage categories in recent years and the strong indications of further growth potential. While there are challenges ahead for marketers of functional beverages, there are also some extremely positive factors.

As the general ‘health and wellness’ boom has shown, consumers in many developed markets are increasingly looking for healthier food and drink options and, along with that, the idea of medicating through diet is becoming increasingly established.

For the multinational companies involved in the market, there are plenty of regions where penetration of functional beverages is far lower than in countries such as Japan, the US and the UK. The geographical potential is therefore significant and the major corporations investing in functional concepts have the infrastructure to capitalise on that, as well as the research and development resources to continue the required innovation stream the category requires.

As many of the ailments that functional beverages seek to address are prevalent in old age, the fact that people are generally living longer lives also provides huge potential for many functional categories.

However, at the same time producers of functional beverages have to address the enormous challenge of tighter regulatory control. This is already being seen in the EU, with the implementation of the new EU directive on functional food and drinks covered in the third section of this report.

It will be interesting to see the reaction to the new EU approach in other regions of the world. Australia is already in the process of revamping its regulatory structures around functional food and drink but is some way behind the EU. The US, for now, has a more permissive regulatory framework but there is pressure there for tighter control.

The evaluation process conducted by the European Food Safety Authority (EFSA) has been characterised as a chastening experience for the functional category. That is certainly one way of looking at it. But, equally the EU’s evaluation and regulatory process could be seen as positive for the sector in the long term, adding to the sum of knowledge in the field and ultimately providing legitimacy.

EFSA has said its work on functional claims “highlighted the importance of constructive dialogue between risk assessors, scientists, decision-makers and stakeholders”. Manufacturers would certainly agree. To a degree, the past four years has represented something a learning-curve for both regulators and the industry.

Crucially, EFSA has said that by ensuring a shared understanding of the scientific evidence required, its work will support industry in establishing future directions for research and innovation. Given that EFSA has rejected 80% of functional food claims, some manufacturers may be less convinced that it is lending “support”, but in a sense the assertion – or the aspiration at any rate – is perfectly justified.

It should also be borne in mind that EFSA is not the regulator. It is the official scientific body deputed by the European Commission to act on the new EU regulation. One could therefore argue that railing against EFSA is shooting the messenger. If there were problems of communication between EFSA and industry, the agency is clearly striving to eliminate them.

In supporting the aims of the new regulation on functional foods and drinks with a comprehensive scientific evaluation of what these products claim to do, the EFSA process has provided, albeit with a prevailingly negative outcome so far, a clear appraisal of where the functional category is, and arguably a good idea of where it has to go.

The application of tougher standards and greater evidential rigour should not be the death-knell for functional foods and drinks. Indeed, if it were that would surely tell us that the sceptics were right and that these were by and large ‘snake oil’ products that have been found out by a tougher regulatory process, and good riddance.

Rather, it could be seen as a salutary experience, heralding a new beginning for the functional food concept. The new EU regulatory framework without question lends far greater legitimacy to those products which won favourable approvals than they had before.

Moreover, it could be said that the EU regulatory process in itself does not devalue the concept of functional food and drink, regardless of how many claims failed to gain approval. In fact, in holding the sector to greater account it is arguably saying that the functional concept is something worth protecting and nurturing.

At a time when health authorities the world over are striving to develop strategies focused on preventive health measures, improving and guarding health through diet has never been more important to governments.

As stated at the beginning of this briefing, this may be primarily about restructuring diets in favour of generally healthier foods but there is no reason why the consumption of foods with known – and scientifically supported – positive health improvement capabilities cannot also play a part. For that to happen, it follows that the claims such products make have to be consistently validated.

Figure 1

Source: Leatherhead Food Research: Future Directions in Functional Foods (July 2010)

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Figure 2

Source: Leatherhead Food Research: Future Directions in Functional Foods (July 2010)

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Leading probiotic dairy markets by country/region, 2008 (US$m)
  Yoghurt Probiotic drinks Total
Spain 460 590 1,050
Germany 145 595 740
Italy 225 450 675
US 525 125 650
France 425 225 650
UK 200 415 615
Netherlands 75 155 230
Australia 60 70 130
Canada 55 20 75
Asia Pacific 4200 2300 6500
Latin America 570 1075 1645
Total 6940 6095 12960

Source: just-food: Global market review of probiotics – forecasts to 2013
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For the third part of this four-part briefing, click here.