Lifestyle trends and predictions point to functional foods being at the top of shopping lists in the very near future. Not only that analysts are predicting that by 2010 the nutraceutical market will be worth £1.6 billion in Europe alone. Functional foods are likely to grow as the major pharmaceutical and food giants plough investment behind the category. Food for thought? But that's only the beginning. Companies just breaking into this area are encountering costly product research and development and are being caught up in a regulatory nightmare. Coupled with the general mistrust of technically modified food by the consumer companies are having to seriously consider how to best launch their product.

The claims that give functional foods their unique positioning are also their most controversial aspect. As long as a health claim does not say a product can cure, treat or prevent human disease (Food Labelling Regulations), and is underpinned by sound science and not misleading (Food Safety Act 1990), it is not scrutinised by the law. Health claims are different to nutritional claims, such as high fibre, low fat and low salt, which are regulated. So companies need to think carefully about how they can successfully communicate the benefits of functional foods to the consumer and make sure their message is clear, science based and educational without making a claim which will risk the food having to be withdrawn.

Nestle has acknowledged these issues and is looking at the current trends in the food industry, what has gone wrong in functional foods, new products and success factors and future prospects for functional foods in order to make sure that they are fully prepared.

Following the crises over genetically modified foods and BSE, the UK consumer view the food industry with suspicion. This means that companies have to seriously consider the best way to launch their products. One company that is taking a proactive role in developing functional foods that are accepted and welcomed by the consumer is Heinz. Heinz is taking a proactive role by providing information on healthy food choices and initiating scientific research to identify specific health benefits of functional foods. Yakult are communicating the benefits of pro-biotic strains and have made sure that there is a strong scientific basis behind the claims that they make.

The retailer is also facing the challenge of how to best communicate functional foods to the consumer. Safeway is using data from customer research to consider how they should best communicate and position functional foods and to decide on optimal store positioning. Sainsbury's is also considering what the retailers role should be in healthy eating and is examining whether the consumer is confused and how to make healthy eating easier.

Looking towards the future, although genetically modified foods have had a difficult introduction this may change as they start to be used in functional foods. Companies like Monsanto and Dupont are using biotechnology to enhance the nutritional value of foods. Genetically modified foods can be used to improve food composition, freshness and availability and can also be used to improve the nutritional profile of plant and animal products. This should dramatically improve the reputation of GM foods and will be an interesting development in the future of functional foods.

Nestle, Heinz, Yakult, Danone, Chr. Hansen, Redbull, Safeway, Sainsbury's, Roche Vitamins, Monsanto, Dupont and a number of other companies will be discussing these issues at IQPC's Functional Food and Beverages conference on 11 - 13 September in London. This event will give you the opportunity to benchmark against your competitors and gain valuable insight into what companies are doing in this crucial area. To reserve your place, e-mail functional@iqpc.co.uk or phone +44 (0) 20 7430 7444.