091209_FD_Issue 174

functionaldrinks zenithinternational newsletter This issue at a glance...

Page six and seven Ingredients focus on naturalness

Page three Slimming yogurt for ego boost

Pages five and six Sporting chance in Europe

Page three Elderflower brings seasonal health

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Issue 174

9 December 2009

enriched beverages

United States

From farm to bottle Columbia Gorge Organic, a family-owned farm, has introduced two new juices to its 100% certified organic portfolio of healthy drinks.

Both drinks, one featuring soy protein and the other rich in vitamin C, are part of its Vitatrition line of enriched juices. Like their existing counterparts, the new offerings are geared towards consumers of all ages, particularly those looking for a healthy and nutrient-rich alternative to other beverages.

Since launching its new beverages, the company has engaged in ongoing in-store sampling as well as offering monthly promotions, which have helped spur sales. According to Elizabeth Roberts, Marketing Coordinator/Product Development of Columbia Gorge Organic, Super C is fast becoming one of the company's top selling lines, whilst Protein Cocoa has proven popular among vegetarians and vegans.

Protein Cocoa and Super C have been available since 24 August 2009 for a suggested retail price of US$3.79 per 16oz bottle.

Protein Cocoa is made with GMOfree soy protein powder, low-GI agave syrup, banana purĂŠe coconut cream, soy lecithin, vanilla extract and dark chocolate cocoa, as well as minerals and trace elements from Himalayan pink salt - said to stimulate circulation, lower blood pressure and eliminate toxins, amongst other functions. Each serving of Protein Cocoa offers 10g of protein.

Super C includes acerola cherries, guava, orange and lemon peel, all high in vitamin C. The drink also contains rosehips and the juice of mangoes and strawberries to deliver 500% of the recommended daily value (RDV) of the vitamin.

Protein Cocoa and Super C are distributed by the company's own CoGo Northwest Distribution in the states of Washington and Oregon. Meanwhile, Natural Choice distributes throughout California with a third party distributing throughout Minnesota and Iowa.

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functionaldrinks zenithinternational newsletter Page 2 Issue 174 9 December 2009

editorial comment

the immune system throughout the winter (See Page 3).

Welcome to the 174th issue of functionaldrinks. With only a few weeks left until the holiday season, there is still no slowdown in activity within the functional drinks arena, as the geographical span and diversity of product launches in this issue bears testament to.

We also focus on a new 'ultra-fresh' energy drink with added brain health benefits, developed by New York-based Specialty Beverage & Supplement (See Page 4). And for those women who are conscious not only of their appearance but also of the environment, producer of natural and organic beauty products Noah's Naturals has unveiled its soon to be available powdered beauty drink (See Page 5).

Starting in Slovenia, local dairy company Ljubljanske Mlekarne has introduced a fatburning yogurt under its probiotic dairy range (See Page 3). Nearby in Austria, we look at Pinzgau Milch's new high-calorie meal replacement drink for elderly consumers (See below).

Also dairy-based, and with European origin, is the new cholesterol-lowering line by Colombian dairy cooperative Colanta, which features Raisio's well-known Benecol ingredient (See Page 4).

In the US we see two organic juices that have quickly found followers, launched by family-owned farm Columbia Gorge Organic (See Page 1).

We also cover a new artisanal botanical infusion

by Island Infusions LLC that promises to boost

Following on from functionaldrinks' presence at the recent Functional and Natural Ingredients (FI Europe) trade fair in Frankfurt, Cecilia MartinezNunez reports on an interview with WILD's Ingredients Product Manager HÊlène Moeller, who gave us some interesting industry insights (See Pages 6 and 7).

Held alongside FI Europe in Frankfurt, we also summarise the main points raised at the Sports and Performance Nutrition Conference, organised by Bridge2Food and with Zenith International Market Intelligence Director Gary Roethenbaugh as a key presenter (See Pages 5 and 6).

Cecilia Martinez-Nunez Deputy Editor cmartinez@zenithinternational.com

functional dairy

Austria

Supporting later life stages

Austrian dairy Pinzgau Milch has made its seemingly first entry into the functional drinks market with a highcalorie meal replacement drink named Promilat Vital.

Launched in Germany in the summer, the drink is targeted at elderly consumers who wish to obtain their daily vitamins and minerals in a convenient format.

The beverage has a skimmed milk base and also contains milk protein powder and a high content of sweet cream to satisfy the taste profile of its target market. Each bottle contains 418 calories,

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13.6g of protein, 59.6g of carbohydrates and 14g of fat. Added minerals include potassium, calcium and magnesium, with added vitamins including vitamins B12 and D3.The beverage is available in ready-to-drink (RTD) format in 200ml resealable bottles and is Ultra Heat Treated.The company recommends consumption of one to three bottles per day depending on the desired nutrient intake.

The drink is available in five flavours - vanilla, coffee, strawberry, banana and chocolate, and is priced at â‚Ź1.50, including VAT. Promilat Vital is available in retail outlets and pharmacies, and direct from Pinzgau Milch, as well as also being used in old people's homes and hospitals.

Following the product's success in Germany, the company aims to expand distribution to Austria, the UK, France, Scandinavia and Italy in the near future.

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functionaldrinks zenithinternational newsletter Page 3 Issue 174 9 December 2009

herbal beverages

United States

Botanical immune boost

anti-viral and boost the immune system.Taken in early spring, it is thought to help reduce hayfever later in the season and is also considered an excellent blood purifier.

Island Infusions LLC, producer of the Tizane-branded range of artisanal botanical infusions, has introduced an immune-protecting variant for the winter season.

Elderflower Tizane, like its existing three siblings, is 100% certified organic and free from artificial preservatives, flavours, colours or caffeine, and is instead sweetened with blue agave nectar, making the drink a low calorie option.

Although FDA regulations do not allow the company to market Tizane as having any health benefits, all of the drinks contain active ingredients derived from herbs that have been used for medicinal purposes for centuries.

Elderflower has long been recognised and used in traditional herbal medicine for upper respiratory illnesses such as colds, flu and sinusitis.The herb can reportedly also help with arthritis, soothe the nerves, act as an

The new infusion is targeted at people who are looking for 'clean' beverages that satisfy both taste and health concerns. According to the company,Tizane is described as being about 'keeping the body in a balanced and healthful state while satisfying the taste buds'.

Although Island Infusions is always seeking inspiration for new drinks, it apparently intends to focus on growing the latest addition, which has already received favourable feedback from a large amount of retailers and consumers. In the meantime, grassroots activities and in-store taste sessions with promotional offers are being conducted, as well as introducing the drinks through spa and wellness centres.

Elderflower Tizane was unveiled in September 2009 at the Natural Products Expo East tradeshow in Boston and distribution commenced in October.The drink, which retails for US$2.99 per 12oz glass bottle, is available in the New England states, New York and metropolitan Washington DC areas. www.tizane.com

functional dairy

Slovenia

Drink yourself egoboostingly slim Slovenian dairy company Ljubljanske Mlekarne has extended its probiotic yogurt range Ego to include a new drinking yogurt, Ego Slim & Vital.

The drink contains a combination of the amino acid L-carnitine and coenzyme Q10, which acts as a cellular antioxidant, to help regulate body weight and promote strength and vitality. Its key benefits are said to include greater fat burning through efficient lipolysis (the breakdown of fat into energy), faster regeneration after workouts, and the provision of important nutrients to the heart, brain and immune cells.

athletes and active consumers, as well as vegetarians, older individuals, pregnant women and breastfeeding mothers who wish to ensure their sufficient intake of L-carnitine.

Packaged in 250ml bottles and available for purchase in Slovenian retail stores, the dairy drink is available in four flavours natural, strawberry, peach and tropical.

Ego Slim & Vital, which provides 102-180kcal and 7.5-8.5g per bottle protein depending on the variant, has a broad appeal and is targeted towards those looking to control their weight,

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functionaldrinks zenithinternational newsletter Page 4 Issue 174 9 December 2009

functional dairy

Colombia

Hearty opportunity in Latin America Cooperativa Colanta, Colombia's largest dairy cooperative, has launched the first dairy product in the country to use Raisio's Benecol cholesterollowering ingredient.

CEO of Raisio Matti Rihko commented on the launch, "The launch in Colombia represents a significant expansion of Benecol products in South America and is an indication of Raisio's ability to expand into new markets with major local partners.We are very pleased having Colanta as our new partner.We view South America as an interesting opportunity for Benecol products."

berry and peach flavours. However, milk products, fresh cheese, cream cheese and milk will apparently be added in the future.

To achieve the purported cholesterol-lowering benefits of Benecol, Colanta suggests consuming two 100g shots per day, the equivalent of two servings of yogurt, for at least two weeks. For longer term results, the company emphasises that regular, daily consumption for at least a year is key.

In order to support its latest launch, the dairy group has developed a dedicated website where consumers can find more information on its chosen cholesterol-lowering ingredient as well as get tips on how to lead a healthy lifestyle.They can also learn where the in-store taste sessions, with take-home samples, are being carried out.

Colanta Funciona yogurts, for sale through major retailers in Colombia since the end of October 2009, are available in 100g shots, 1litre bottles and mixed variant six-packs.

The new range, called Colanta Funciona, currently only comprises yogurt drinks in strawberry, red

www.colantafunciona.com

energy drinks

United States

Energy with a twist New York-based Specialty Beverage and Supplement has launched a unique spring water-based energy drink, named JoJo. JoJo's energy-giving functional ingredients are stored in liquid form in the product's cap, and with a counterclockwise twist, are released into the 100% spring water contained in the bottle.

The company claims that this allows for the ingredients to retain optimum efficacy right up until the point of consumption.

Each cap contains a 'smart drink energy formulation' of B vitamins, amino acids (LPhenylalanine, 5-HTP), antioxidant-rich

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pomegranate, açaí and green tea extract and memory-enhancing citicoline. JoJo Energy utilises ingredient company Kyowa Hakko's Cognizin brand of citicoline, a natural nutrient found in every cell of the body. Studies have shown that Cognizin supports brain health in several ways, including increasing brain energy, providing essential structural components for synthesising brain cell membranes and supporting the formation of brain nutrients that regulate cognitive function.

The non-carbonated drinks contain no carbohydrates, sugar or calories and are available in six flavours: Super Berry, Black Cherry, Orange Sickle, Citrus Guava, Passion Fruit Mango and Mojito.

Chief Operating Officer Scott Ferrari launched the Specialty Beverage and Supplement business with Peter Scalise, a veteran of the nutrition supplement industry, with the pair having spent a reported US$3 million to bring JoJo to market.

The resulting drink is positioned as 'Good Energy' and as a cross between Red Bull and a vitamin-enhanced water.To promote the brand, a sampling campaign is underway across New York.

Available in grocery stores across New York and via the company's online store, each 500ml bottle retails at US$2.99. www.jojoenergy.com

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functionaldrinks zenithinternational newsletter Page 5 Issue 174 9 December 2009

cosmeceuticals

United States

Beauty benefits two by two, hurrah!

Noah's Naturals, producer of natural and organic beauty products, has made its entry into the functional drinks arena with news of its impending powdered beauty drink.

Called Anti-Aging Beauty Beverage, the offering has been designed to help consumers achieve nourished and hydrated skin. As its main functional ingredient, the powder contains Collactive, developed by

Israeli ingredients specialist Frutarom. This is an all-natural, anti-wrinkle ingredient composed of marine collagen and elastin peptides in the same ratio as found in the skin. When taken orally, collagen and elastin have shown synergistic anti-wrinkle action, stimulating the skin to lift and tone sagging areas and to minimise lines and wrinkles whilst also increasing moisture retention.

The beauty powder also contains the antioxidant rich fruits aรงai and goji, in addition to phytonutrients derived from pomegranate and blueberry. To help improve skin's tone and texture, lutein and lycopene have been added, with the product, free from added sugar, providing only 30 calories and 100%, 300% and 200% of the recommended daily allowance (RDA) of vitamins A, C, and E respectively.

Noah's Naturals Anti-Aging Beauty Beverage will be available from January 2010 at select food, drug and mass retailers across the US. A 14 day supply pack will retail for US$19.99, with a 30 day supply available for US$29.99. www.noahsnaturals.com

sports drinks/supplements

World

Bridging protein concept and product

With sports drinks and sports nutrition products growing and diversifying globally, Bridge2Food's recent Sports and Performance Nutrition conference in Frankfurt was more pertinent than ever.

The event summarised key category topics, with Zenith International and Innova Market Insights each offering their take on trends within the European sports and performance nutrition segments, set in context against global trends, with the remainder of the conference entirely Europe focused.

For Zenith International, Gary Roethenbaugh's presentation centred around sports drinks performance at a global level as well as in key regions including Europe, the US and Japan. To understand the sheer size of the sports drinks industry, Gary compared this against that of energy drinks, which has also seen meteoric

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growth, better defined segmentation and increased consumption occasions.

Gary also drew attention to the fact that the boundaries between sports and energy drinks are blurring.

Another interesting notion made by Gary was that of a 'white space opportunity'.

This refers to the fact that to date, performance sports drinks such as EAS and Muscle Milk have a loyal following and strong credibility, albeit with niche volumes. In contrast, mainstream brands like Lucozade, Gatorade and even vitaminwater and Red Bull have mass appeal yet tend not to have the nutrition claims and credibility. The (continued on Page 6)

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functionaldrinks zenithinternational newsletter Page 6 Issue 174 9 December 2009

sports drinks/ supplements

World

(continued from Page 5) white space opportunity is in the middle, taking performance drinks to the mainstream.

Innova Market Insights Head of Research, Lu Ann Williams, highlighted category developments in both the US and Europe, with examples of sports nutrition products that are becoming increasingly mainstream.

This is thanks to better distribution through supermarkets and convenience stores, better segmentation and targeting, and cheaper alternatives, particularly private label sports drinks in the US.

Another event highlight was an address by Key Account Manager at Axellus Oy Mika Somppi, a Finnish healthcare products specialist. In his presentation, Somppi offered a very detailed picture of the Finnish sports nutrition market.

Somppi also explained the recent progression from sports powders towards RTD sports drinks, which has been helped by increased consumer awareness in the past four years. He also commented on the Finnish market being very particular in that the very defined seasons affect purchasing behaviour, resulting in different products for different occasions.

Other presentations offered more technical information, such as those presented by ingredients companies Volac, Solae, DSM Food Specialties and BENEO-Palatinit GmbH, each covering a different aspect on the importance of protein consumption.

Overall, the conference was well run and well attended, with high calibre delegates and presentations, and an ideal networking opportunity.

ingredients

Germany/ World

Supplier insight At the recent Functional Ingredients and Natural Ingredients exhibition in Frankfurt, functionaldrinks' Cecilia Martinez caught up with WILD Ingredients Product Manager Hélène Moeller.

Responsible for the marketing of single ingredients such as flavours, colours and extracts, Moeller gave us an insight into the leading ingredient company's latest developments.

functionaldrinks (FD): What have been your most recent developments for the beverage industry?

Hélène Moeller (HM): One recent development

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in food ingredients for beverages is certainly our new stevia extract. In February of this year, WILD Flavors Inc, an allied company of WILD in Heidelberg, Germany, established a partnership with Sunwin International Neutraceuticals, a worldwide supplier of allnatural, zero-calorie stevia.Thanks to this cooperation,WILD customers all over the world benefit from a guaranteed supply of raw materials and years of competence in the production of stevia extracts of the highest quality. In line with this, we have already developed stevia-based food and beverage concepts, which will allow the industry to launch products immediately upon EU approval.

FD: How do you think the health claims regulation has affected food and drink companies?

HM:The health claims regulation has certainly had an impact on the food and beverage industry. It has made companies more hesitant when it comes to the marketing of functional products with a specific health benefit. In view of the EFSA opinions released so far,WILD anticipates that only those products backed by clinical human studies will be allowed to any carry health claims.WILD is already able to offer the industry various scientifically-proven functional food and beverage concepts. (continued on Page 7)

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functionaldrinks zenithinternational newsletter Page 7 Issue 174 9 December 2009

ingredients

Germany/ World

(continued from Page 6)

impression on products' taste, as demonstrated by sensory tests.

FD: Have you seen any trends in terms of health benefits?

HM:There's a clear trend towards the fusion between naturalness and functionality, which WILD expects to last. Prime examples are functional ingredients such as antioxidants that are very popular at the moment; their natural health benefit is easy to explain to the consumer. In particular, red fruits - such as superfruits like cranberries or pomegranate and tea extracts naturally contain high levels of antioxidants.

WILD's standardised antioxidant blend based on polyphenols from green and white tea, grape seeds and green rooibos enables beverage producers to enrich even products in the lighter colour spectrum with antioxidants.

Furthermore, our Fruit Up, a 100% fruit extract as a purely natural sweetening option, has been used by key clients for a number of years.Thanks to its balanced sugar spectrum, Fruit Up has a low glycaemic index and can be applied to nearly every food and beverage application. Another benefit of Fruit Up is that it can be labelled as a "fruit extract" in ingredient lists.

FD: How does Fruit Up fit with your development of stevia-sweetened product concepts?

HM: Stevia and Fruit Up can be perfectly combined to create low GI and low calorie products.They both also meet consumer demands for natural ingredients, and make a proven

FD: Coming back to trends, which areas within the functional drinks industry would you say are showing the most growth?

HM: Energy is still the biggest growing functional segment.WILD is expecting a further segmentation of the energy drinks market with targeted offerings.

The appearance of energy shots and natural energy drinks are indicators of this.

However, trends still tend to come from Asia or the US, as in the case of energy drinks that contain juice.WILD is known for identifying promising trends at an early stage and transferring them to other regions. Recent examples are relaxation and concentration drinks, which are becoming more and more popular in the US. Specifically for the European market,WILD has developed a "Mental Energy Drink" concept. Its main functional ingredient is a standardised lemon balm extract combined with Fruit Up.The generous dose of the extract has a stimulating effect, with "Mental Energy Drink" increasing alertness and boosting performance and cognitive abilities, particularly in stressful situations, as confirmed by The Brain Science Institute of the Swinburne University of Technology in Melbourne, Australia.

WILD expects concentration as well as relaxation drinks to pick up in Europe given that stress is one of the top consumer concerns.We believe that relaxation drinks in particular are a potential counterpart to energy drinks; both can exist synergistically, as has already happened in the tea drinks segment where there are caffeinated teas for energy as well as those for relaxation.

There has definitely been a big shift within the food and drinks industry towards the use of more natural ingredients.WILD is anticipating that the looming EC flavour regulation, coming into effect on 20 January 2011, will encourage manufacturers to adjust their product formulations accordingly and focus more on natural flavour alternatives.WILD's philosophy, since the company's foundation in 1931, has always been to offer natural ingredients to the food and beverage industry. www.wild.de

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functionaldrinks in brief

Europe

Koma Unwind drink available across Texas.

The European Food Safety Authority (EFSA) has approved cholesterol-lowering claims made by products containing plant stanol esters, the active ingredients used in products such as Raisio's Benecol.This is reportedly the first disease reduction claim authorised by EFSA. Germany: German ingredients specialist Wild is seeking additional information from EFSA as to how it should proceed in terms of further studies following a rejection of the immune-boosting claims of its Immune Balance Drink concept.

UK: Voltz Distribution UK has been promoting its eponymous energy shot in the trade press and highlighting its attributes, including its broader customer appeal compared to other energy drink brands and high profit margins for retailers.

World

Canada: Performaxx Brands, a subsidiary of New York-based Full Motion Beverage, has signed an agreement with Altra Food Distributors for the sale of its Kosher certified 2oz zerocalorie energy shot, Energize, throughout Canada.

US: PepsiCo has revealed that it will expand its Amp-branded energy drink portfolio with a new energy shot, new variants to the sugar-free line, new suggested 'value' price points for multi-packs and the possibility of a new juice range packaged in PET.

Further research has found that between 2004 and 2007, sales of Nestlé's functional foods rose by an impressive 23.7% annually and by 20% in 2008, compared to growth of 6.2% a year for its regular food products.

Ingredients supplier BI Nutraceuticals has added new herbal extracts to its portfolio.The extracts can be used in dietary supplements, functional foods and beverages.The new ingredients are: elderberry to boost antioxidant properties; antioxidant rosemary; the superfruit mangosteen; and yerba maté.

The count of product launches containing cranberry reportedly reached 562 in 2009, 38 more than in 2008, and nearly twice the 310 debuts of 2005. Furthermore, cranberry nectar, outside its 'home market' of the US, is most popular in the UK and Ireland, with off-trade volume sales accounting for over 50%. In Israel, where cranberry nectar was largely unknown until 2005, off-trade sales shot to an almost 6% share of total nectar volume in 2008.

Bebida Beverage Company has partnered with distributor Austin Beverages to make its relaxation

functionaldrinks zenithinternational newsletter

Editor: Jenny Foulds Deputy Editor: Cecilia Martinez-Nunez Contributors: Charmaine Holmes, Laura Knight Market Intelligence Director: Gary Roethenbaugh functionaldrinks is issued 25 times a year and is only available by subscription: electronic PDF format only £495; hard copy and PDF £595* *VAT chargeable on electronic format to UK companies and EC companies not registered for VAT

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In an interview, Carl Sperber, spokesman for Living Essentials, explained the importance of being first to market in reference to its energy shot, 5 Hour.

Sperber commented, "We had a lot of time to establish ourselves as a product, establish how we were different as an energy solution for people, and to carve out a niche in what, at the time, was an underserved area in the energy drink category."

According to research, sales of functional foods in Western Europe grew 10.2% a year between 2004 and 2007, compared to those of packaged food which rose by 6.3% during the same period.

Meanwhile in the US, sales of foods with 'gut health' claims grew by an average 15.8% a year between 2002 and 2007, compared to only 2.9% growth of overall food sales.

North America

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Bond Laboratories, producer of various functional food and drink products, has added two distributors to the distribution network for its Fusion Premium Energy range.The drinks will now be available in over 1,000 on- and offpremise accounts throughout the south central Kansas region.

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7 Kingsmead Square Bath BA1 2AB United Kingdom t +44 (0)1225 327900 f +44 (0)1225 327901 e functionaldrinks@zenithinternational.com www.functionaldrinksnews.com No part of this periodical may be reproduced in any form, copied or stored electronically without prior permission in writing from the publisher. Every effort is made to verify all information published, but Zenith International cannot accept responsibility for any errors or omissions or for any losses that may arise as a result.

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