Opportunities in healthy and functional ingredients by figlobalinsights

Opportunities in healthy and functional ingredients

3-5 December 2019 Paris, France

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Contents 1. Growing demand for health benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2. Challenges to overcome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3. Personalised nutrition strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 4. Health and nutrition in the digital age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 5. Functional ingredient strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 6. Personalising gut health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 7. Functional solutions for specific ages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 8. Trending in sports nutrition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 9. Navigating the regulatory environment . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10. Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

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Growing demand for health benefits More than ever, consumers are seeking out food and beverage products with health benefits. There is growing awareness for example that functional ingredients like probiotics and omega-3 fatty acids can help reduce cardiovascular disease risk and improve gut health,1 and that trendy extracts such as cannabidiol and algae could help businesses to differentiate themselves and boost appeal. Mintel recently identified green tea, turmeric, apple cider vinegar, ginger and ginseng as five of the most popular functional ingredients. Consumers associate these with a broad range of health benefits, but often without scientific basis.2 Growing demand for customisation in the food sector, a greater focus on healthier eating and ongoing activities in nutrigenomics have all strengthened the development of personalised nutrition products. In recent years, more and more manufacturers have achieved market penetration with bioactive ingredients.3 This increasingly crowded marketplace means that communicating the perceived health benefits has never been more critical.4 For those that get their strategy right the rewards could be great - the worldwide revenue for functional food is projected to increase from about USD 300 billion in 2017 to over USD 440 billion dollars in 2022.5 As a consequence, global functional specialty food ingredient market size is estimated to reach USD 48,221 million by 2025, growing at a CAGR of 5.5% from 2017 to 2025.6

Global Functional Specialty Fi Market Size 60,000

USD m

50,000 48,221

40,000 30,000 20,000

31,408

CAGR 5.5%

10,000 0 2017

2025

Source: Specialty Food Ingredients Market Report â&#x20AC;&#x201C; Grand View Research

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Challenges to overcome Manufacturers of functional foods must ensure that ingredient supply chains can meet growing demand as well as quality expectations. Regulations can be complex to navigate. In some cases, health claims for some nutrients are still not possible due to inconclusive evidence. Digital health represents both a challenge and an opportunity, and when it comes to using personal data, trust remains a crucial ingredient. Get your strategy right though, and the rewards can be huge, notes Jennifer Arthur, Head of Nutrition & Product Development, Leatherhead Food Research.

“Companies need to clearly articulate how they are intending to use the data and what benefits it will bring to the consumer; consumers won’t necessarily make the connection between providing the information in order to improve their health by themselves.”7

Personalised nutrition strategies Personalised nutrition – using information on individual characteristics to develop targeted nutritional advice, products, or services – is big business, with the global personalised retail nutrition and wellness market expected to reach USD 50 billion by 2025. According to Nard Clabbers, Senior Business Developer Personalised Nutrition and Health at TNO:

“While personalised nutrition is hot everywhere, it is still quite niche. The promise is huge, which is why understanding this market is important.”8 Clabbers stresses that to be successful in the personalised nutrition field, businesses should focus not just on the body but also take account of a person’s environment.

“It should be about helping people to make the right choices that suit them. If you cannot connect all the relevant health parameters of the consumer then you don’t have a good business model.”8

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Clabbers notes the work of a consortium run by TNO and Wageningen University, which seeks to investigate personalised nutrition and health from every angle.

â&#x20AC;&#x153;Dieticians will still be relevant because there needs to be someone to make sense of the data.â&#x20AC;? 8

Personalised nutrition and health from every angle

Mariette Abrahams, Founder & Director of Qina Consulting, argues that companies should take inspiration from other industries in developing their personalised nutrition solutions. Companies should not be afraid to nudge consumers towards healthier choices. It would also make business sense to have more women in positions of influence, given that they often make food purchase decisions.10

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Health and nutrition in the digital age Entrepreneur, pharmacist and healthcare consultant Mike Wakeman focuses on personalised nutrition from a pharmaceutical perspective.11 According to him, digital tools such as the online VitMedics.com could help manufacturers to deliver more personalised services. The tool takes into account a person’s drug intake as well as various lifestyle parameters.

“The tool enables patients to see the impact of each drug on their nutrient status, and identify where they are nutritionally deficient. It also tells them what food they should be eating if they are, say, deficient in magnesium.” 11

The online Vitmedics tooll

Dr. Volker Spitzer, Global Principal R&D Consumer Health, IQVIA, notes that food and pharma are increasingly coming together to focus on wellness and prevention. Speaking at the Future of Nutrition Summit 2018, he said that digital is playing a crucial role in this trend by empowering consumers through education and enhancing analogue products like medicine with interactive programmes and biometric sensors. 13 Dr. Spitzer observes that consumers are smart:

“Consumers are very selective in choosing those offerings that provide meaningful values. 85% of health apps have less than 5,000 installs.” 13

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Nonetheless, he notes that the prevalence of health and wellness-focused apps promises to be game changing.

“Health optimisation – where you have your medical history, genetic profile and other biomarkers etc. on an electronic medical record that is connected to your doctor and pharmacist – is probably closer than we think. Everything is going in this direction. The role of the consumer is changing from consumer only to industry partner.” 13 Also major manufacturers are getting in on the game, for example, Nestlé Japan has launched the company’s first personalised health support service.14

ShopWell is an app that scans barcodes to find the ingredients in

about every product, to provide personalised advice on allergens and healthy choices.

23andMe’s DNA Test provides advice on nutrition and exercise to control risk factors.

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Functional ingredient strategies Dr Michael Kemp, Nutrition Manager at Kerry Health and Nutrition suggested in a recent webinar16 that manufacturers should use ingredients that consumers think of as healthy, in combination with well-established healthy ingredients. For example, an ingredient with a healthy halo, like ginger or apple cider vinegar, could be combined with fruit juice, which is widely perceived as healthy. Kemp also suggests using nutrients with strong supporting science to anchor the product. For example, consumers looking for an immune-boosting beverage might be attracted to orange juice with added ginger, which helps differentiate the juice from others on the shelf – but it also makes sense to add an ingredient with established immune benefits like vitamin C.

“When innovating, remember to anchor with ingredients that are supported by science…You need the science-backed ingredient there for your own protection.”17 Kara Landau, Founder of Uplift Food discussed consumer awareness of prebiotics at the Hi Europe Conference 2018. She noted that while two thirds of supplement users have heard of prebiotics, awareness is significantly lower in the food and beverage category.18

“Nonetheless, there are real opportunities to create viable products out there,” she said. These include synbiotics, which combine prebiotic and probiotics to capitalise on the probiotic halo effect. Landau noted the growing popularity of using natural prebiotic-rich ingredients as sweeteners. Fructooligosaccharides for example, short-chain polymers of D-Fructose and D-glucose, occur naturally in bananas, garlic, artichokes and chicory.

Personalising gut health Recent studies have shown that gut microbes affect the way we store fat, how we balance levels of glucose in the blood and how we respond to hormones that make us feel hungry or satiated,19 and consumers are increasingly aware of this link. There is growing demand to consume more probiotics and prebiotics, and consumers are conscious of the importance of dietary fibre. This is creating opportunities for more targeted products in the gut health sector. Kara Landau notes that digestive health is the number one claim for prebiotic supplements, with some products going beyond digestion to promote the mood-supporting benefits of boosting the gut-brain connection. Dr. Christian Sina from the Institute of Nutritional Medicine at the University of Lübeck suggested during his Future of Nutrition Summit 2018 presentation that a viable strategy would be to focus on a tailored nutrition approach that complements what is already there in the gut. Probiotics that compete with bacteria already there can be complicated, according to him.20

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According to Julian Mellentin, Director of New Nutrition Business, consumers’ quest for digestive wellness remains a big driver of new opportunities for businesses large and small. The focus on gut health has had a positive impact on the global probiotics market, however due to strict regulations on the communication of health claims in Europe, the probiotics sector still faces an uphill struggle in achieving success in this market. According to Euromonitor data, probiotic yoghurts and fermented milk have lost more than EUR 1 billion in projected sales during the period 2009-2017. It is unlikely to change much in 2019, however there are a number of lobby groups working to change the tough approach to probiotic claims.21 In the meantime, fermented foods such as kefir, kombucha, sauerkraut and tofu top the list of superfoods of many consumers as well as dietitians.22

Health-Ade Kombucha

enefiber Nutriose Chewable B Tablet Assorted

Consumers are conscious of the gut health benefits of yoghurt and increasingly avoid products containing artificial colours, flavours and additives, instead favouring products that advertise their probiotic content.

Califia Farms is dairy-free and contains 10 billion live colony forming units (CFU) of probiotics

Activia’s probiotic culture of Bifidus Regularis aims to improve digestion and immune function

Kellogg’s has a line of pre- and probiotic added cereals called Happy Inside, while Danone is creating plant-based yoghurts with probiotics, designed to meet the needs of speciality diets. This builds on scientific evidence that when it comes to bacteria and personalised nutrition, a one size fits all approach does not always work.

Kellogg’s Happy Inside

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Functional solutions for specific ages Europe’s ageing population presents opportunities for functional food manufacturers. Over 65s tend to have reduced appetites, which can lead to increased requirements for macro and micronutrients, in particular protein, calcium, vitamin D and vitamin B. Products targeting specific functionalities such as bone strength and memory are also appearing, though getting claims approved remains challenging. Ayela Spiro, Nutrition Science Manager at the British Nutrition Foundation, focused on cognitive decline and dementia at the Hi Europe Conference 2018, noting that evidence to support the use of specific functional ingredients for improving cognitive function or decreasing risk of dementia is inconclusive. Rather the scientific literature currently indicates that following a healthy dietary pattern is the best strategy.28 At the other end of the age spectrum, Josephine Garvey, independent consultant, discussed human milk oligosaccharides (HMOs) in infant milk formulae.29 According to her:

“Human milk is the ultimate in personalised nutrition, and Human Milk Oligosaccharides have been shown to be hugely important to infant health.”29 As a result, more companies are looking to include HMOs in infant formulae. Microbial fermentation is often involved to create ‘structurally identical’ synthetic oligosaccharides. So far, the EFSA & FDA have approved the safety and use of two HMOs. Garvey suggested that more data and long-term follow-up was needed to realise the full potential of personalised approaches to infant nutrition.

Trending in sports nutrition The sports nutrition market covers a range of products such as protein powders, protein bars, nitric oxide boosters and creatine supplements. In 2018, Lumina Intelligence identified 2600 unique brand variants across 20 countries.30 The global sports nutrition market is expected to reach USD 44 billion by 2021.31 Dr. Jeroen Wouters, Innovation and Nutrition programme expert at the Dutch Olympic training facility in Papendal, discussed potential lessons from cutting-edge research into the impact of nutrition on elite athletes at the Hi Europe Conference 2018.32 Monitoring tools are being used to collect personal data to steer athletes in the right direction and to enable the team to develop more targeted products based on needs. Such apps are also increasingly appearing on the market as digital health goes mainstream. Protein, long associated with health and wellness, has moved beyond its traditional core sports nutrition market. The European market for plant protein-based products for example is forecast to grow by 7.1% between 2018 and 2023,33 and the phrase ‘plant extract’ has immediate resonance with consumers across Europe. The perceived benefits of a plant-based diet will continue to drive plant protein as an attractive ingredient.34

Bio-synergy Lean & Green made with pea, buckwheat and rice. Each serving contains more than 21g of protein

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Navigating the regulatory environment Food manufacturers need to be aware of legislation at the EU level when looking to bring healthy and functional products onto the market. Regulation No 1924/2006 on nutrition and health claims36 lays down the conditions for the use of nutrition and health claims on food packaging. Christiaan Kalk, LSBI founder and regulatory affairs consultant, agreed that the list of newly accepted health claims under this Regulation is not that long. He told attendees at the Future of Nutrition Summit 2017 that food researchers should perhaps consider learning from the better financed pharmaceutical world, and that food and medicine can support health in a complementary fashion.

“No single domain can claim exclusivity towards our health,” he said.37 Manufacturers should also be aware of novel food regulation requirements, which cover ingredients not consumed within the EU to a significant degree before May 1997. Regulation (EC) 2015/2283 on Novel Foods38 came into force in January 2018, and centralises the authorisation procedure. The benefit of being covered by EU novel foods law is that you have one simplified authorisation process and access to the whole EU internal market. Ingredients such as additives, flavourings and solvents – as well as GMOs – cannot be considered to be novel foods.

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Key takeaways •C onsumers are more than ever seeking out food and beverage products with health benefits •C lear communication in an increasingly crowded market is critical •D espite growing popularity personalised nutrition remains a niche sector – there are plenty of untapped opportunities •B usinesses need to consider a consumer’s environment and context – as well as their health needs – to truly connect •M onitoring tools and apps will revolutionise personalised nutrition and empower consumers • T apping into consumer data will help manufacturers deliver tailored services • T he importance of gut health has seeped into public consciousness • F unctional ingredients can help Europe’s ageing population live long and better – this is a market that will continue to grow •P rotein, long associated with health and wellness, has moved beyond its traditional core sports nutrition market

The information provided here was compiled with due care and up to date to the best of our knowledge on publication.

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5 6

Specialty Food Ingredients Market Report â&#x20AC;&#x201C; Grand View Research https://www.figlobal.com/fieurope/visit/news-and-updates/exploring-personalised-nutrition

7 8

Nard Clabbers, Future of Nutrition Summit 2018.

Mariette Abrahams, Future of Nutrition Summit 2018.

Mike Wakeman, Hi Europe Conference 2018.

Dr Volker Spitzer, Future of Nutrition Summit 2018.

https://www.nestle.com/media/news/nestle-launch-wellness-club-personalised-health-service-japan https://www.businesswire.com/news/home/20170223005344/en/Innit-Acquires-ShopWell-Plans-Platform-

Launch-2017 16

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Kara Landau, Hi Europe Conference 2018.

18 19

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Dr. Christian Sina, Future of Nutrition Summit 2018.

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Ayela Spiro, Hi Europe Conference 2018.

Josephine Garvey, Hi Europe Conference 2018.

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Jeroen Wouters, Hi Europe Conference 2018.

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Christiaan Kalk, Future of Nutrition Summit 2017.

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