Obesity is a major concern in most developed countries with approximately 10% to 20% of children considered obese.
Most developed countries also have an ageing population with high incidence of degenerative diseases, heart disease, stroke, diabetes, cancer and other ailments.
There is also evidence, demonstrated in a 2004 Australian study in the Journal of Nutrition, that dietary habits during pregnancy can make infants more susceptible to chronic diseases in adulthood.
Today’s consumers have far greater knowledge of diet-health relationships.
Consequently, food choice decisions are increasingly influenced by the self-medication and disease prevention attributes of foods.
To some extent, this is due to publicity programs of government(s).
Governments in developed countries are saddled with high health costs, growing absenteeism and falling productivity due to health problems.
Consequently, governments are promoting better dietary habits.
In 2004, the French parliament banned vending machines that stock carbonated beverages, chocolate bars and salty snacks from schools.
The French parliament also legislated that marketeers of fatty foods include a health warnings in their advertisements or pay a ‘fat tax’ of 1.5% of the advertising budget.
As a result of greater awareness of diet-health relationships, consumers initially shifted to a ‘balanced-diet’: less consumption of red-meats and trans-fats; greater consumption of fruits, vegetables, whole grains and other wholefoods.
However, the last two decades have shifted to using foods in self-medication and disease prevention has evolved and as a result a wholly new food category, commonly described as ‘functional foods’ has emerged.
The USA, EU and Japan are the three largest and fastest growing markets for functional foods with 2003 retail sales registering US$18.5 billion in the USA, US$$15 billion in the EU and US$9 billion in Japan.
USA, EU and Japan account for 85% of the US$50 billion global functional foods market.
Demand for functional foods in all major markets is forecast to increase at about 8% to 12% annually.
Most commentators say the functional foods market will grow at a compound rate of about 8% to 12% annually for at least the next 10 years.
USA, SA, EU and Japan trends are being replicated in Australia. In 2003, retail sales of functional foods in Australia registered US$0.75 billion, per capita expenditure of US$37.
However, per capita expenditure in Australia is far lower than the USA suggesting that there are substantial opportunities in Australia to grow the market for functional foods.
Health and wellness is replacing convenience as the major influencer in food choice decision-making thus providing food processors ‘new’ avenues for brand extensions and product differentiation.