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Dairy, bakery and beverages account for 72.9% of functional foods in the world’s biggest markets with energy/mood enhancement, gut health and heart health the dominant claims, according to NutraIngredients.com.

The report, citing a report from Leatherhead Food International, said in 2009, dairy accounted for $8.702 billion (NZD$1.23 billion) globally, bakery $5.18 billion (excluding Japan), and beverages $2.825 billion not including energy and mood drinks.

The UK-based organisation said the US and Europe will drive growth in the market from $22.923 billion in 2009 to $27.126 billion in 2015 – an 18.3% growth rate – but warned health claim regulations in the EU and elsewhere could severely crimp market development.

The report excluded sales of mood/energy products in the figures, despite registering their popularity, trend-wise.

“The future of functional foods depends on a few key points,” the Leatherhead report was quoted saying. “Health claim regulations in Europe are currently under scrutiny and the future of other global regulations will shape the health claims permitted on packaging.”

“Credibility is key. Regulations are likely to become stricter and only health claims with strong scientific backing will be permitted for use or can be endorsed. Consumers are also becoming savvier to the concept of ‘scientifically proven’.”

Of the other countries in its survey, Japan was predicted to record slower growth because its market was older but it remained the biggest functional foods economy with 39.2% of the total market followed by the US (31.1%), the five European countries (28.1%) and Australia (1.6%).

The five European markets – the UK, Spain, Italy, France and Germany – is expected to grow from $5.058 billion in 2009 to $6.454 in 2015 – an increase of 27.6% over the time span.

The UK has become the largest market for functional foods, having overtaken France in recent years. Leatherhead put this down to strong activity in functional dairy and yellow fats as well as “significant initiatives” in breakfast cereals and beverages.

France remains the second biggest market followed by Germany, Spain and Italy, “a distant fifth”.

Leatherhead points out that active health drinks dominate the European market, along with functional yoghurts (showing “dynamic growth”) and functional milks. Dairy products account for almost 70% of functional food sales in the five countries.

Popular brands include Danone Activia and Actimel spoonable and drinking yoghurts, Benecol spreads and dairy products, Burgen bread, Danone Danacol, So Good soy milk and Tropicana Essentials fortified juice.

The Japanese market is characterised by a longer association between food and health made by Japanese consumers. This is backed by the Foods for Specified Health Use (FOSHU) regulation which controls how health claims are made about functional foods. While the system was slow to take off, it has fostered a market worth almost $9 billion, the report said.

Healthy non-FOSHU products rely on consumer knowledge and implied claims and when added to the mix contribute to a market worth closer to $25 billion.

“In general, the use of functional ingredients is widespread in Japan, with probiotics, vitamins, calcium, and oligosaccharides regarded as almost standard in some sectors of the market.”

Leatherhead defined the Australian market as “relatively undeveloped, despite ongoing new product activity”. Australia’s population of a little over 20 million was also cited as a factor.

But it said the country had health R&D activity going on in probiotics, drinks, bread and cereals. Glycaemic Index claims are popular.

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