Key Trends in Functional Foods & Beverages

Updated: Dec 30, 2020


Natural functionality continues to drive product development innovation.

One massive trend underpins the success of almost everything else in the healthy food and beverage market. It’s the key driver of most innovation—from plant-based products to the re-birth of full-fat dairy, the rise of green juices, blueberries, almonds, seaweed snacking and tens (perhaps hundreds) more healthy propositions. This single, most-powerful trend is consumers’ desire for foods and ingredients that are “naturally functional.”

With a natural and intrinsic health benefit, companies can convey a compelling message. Bloggers and journalists love to write about things that are naturally healthy, which creates consumer buzz and interest. When people draw their own conclusions about the benefits of a naturally functional ingredient or product, then a health claim isn’t necessary.

The strongest growth potential of a naturally functional product for 2017 and beyond lies with turmeric, which—having proven its strength in the dietary supplements aisle—is starting the transition into foods and beverages.

With 580 published human studies on its benefits (with inflammation the single-largest area of research) it isn’t surprising that this traditional culinary ingredient in curries and other Asian dishes has grabbed consumer attention. In fact, there was an 800% increase in Google searches on turmeric in the period 2014-2016. This phenomenon isn’t confined to the U.S.; the same growth in online searches on turmeric can be found in countries as diverse as Germany, Australia and Spain.

The surge in interest is fueled partly by consumers’ growing anxiety to reduce their sugar intake. When people search for information about sugar, one of the key negative health effects they discover is its role in causing inflammation. Search for foods that are protective against inflammation and turmeric usually comes close to the top of the list.

Although few foods and beverages have attempted to tap into turmeric’s popularity, that’s beginning to change. The number of products using turmeric as an ingredient doubled in both the U.S. and Europe in the period 2014-2016. A sign of growing momentum is that “turmeric-centered” startups are beginning to gain traction, such as Temple Turmeric, a beverage brand that is heading above the $10 million annual sales threshold.

Another sign of success has been growth in upscale cafes—notably in Australia’s three biggest cities—of the turmeric latte. Favored by gym-goers, this concoction consists of dairy or almond milk with a large dose of turmeric. Instant powder versions for use at home are already showing up on Australian supermarket shelves (e.g., Nature’s Harvest brand). It’s only a matter of time before the ready-to-drink (RTD) turmeric latte shows up in dairy and almond milk versions in more stores.

Powered By Plants Yet again, 2017 looks set to be a year when strategy is powered by plants. Following the acquisition of WhiteWave Foods, Danone is now both one of the worlds’ top 10 dairy companies and also the biggest player in the global non-dairy milks market. Danone’s R&D expertise in yogurts coupled with its marketing muscle will ensure that the non-dairy yogurts and desserts market gets a big boost in 2017 and beyond.

This is not the only acquisition that shows how important a plant-food strategy has become. Coca-Cola also entered the market with the purchase of AdeS, a soy-based beverages brand, making it the number-one player in Latin America.

With these two well-resourced businesses in the market, the growth in non-dairy options that we have seen so far might just be the beginning of a much larger trend.

Among consumers, plant-based foods are capturing a bigger “share-of-mind,” fueled by the huge support the concept gets from high-profile bloggers, mainstream journalists like Michael Pollan, and also from the fact that all consumers are now considered “food explorers,” eager to try new tastes and foods.

And although more and more products use descriptors such as “vegan” or “vegetarian,” those eating styles are not the sole driver (after all, 10% of U.K. consumers describe themselves as vegetarian, but half of this group eats fish, and a quarter eat chicken). Rather, people often “feel better” if they eat less meat and sometimes only consume plant-based foods.

The biggest opportunities lie with snacking products that are explicitly plant-based, dairy-free and gluten-free, such as the many brands based on seaweed, beans, chickpeas and others.

Much of the innovation in this segment is about taking long-established plant ingredients and remaking them as something new. Here are two examples:

  1. Hippeas chickpea-based snacks—sold in the U.S. and U.K. in Starbucks and elsewhere—consist of a blend of chickpea flour with rice, extruded and baked to produce “puffs.” The product makes protein, fiber and total calorie claims.

  2. Brami Beans is re-working an Italian legume, lupini beans—eaten by the ancient Romans and still popular today in Italy—into a fresh, high-protein, plant-based snack. The New York-based startup is less than a year old and has already been picked up in 300 stores. Lupini beans have a good ratio of protein to calories (and a full range of amino acids) providing just 35 calories per serving (about 15 beans) with 4 grams of protein and 4 grams of fiber.

If you are a supplier of plant-based protein or plant-based foods that provide protein, you have a bright future ahead.

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