Functional Beverages for Gut Health

The

of FoodHistory

Survival

Calories

Satiety

Taste

Functionality

Enhancement

Optimization

Nutrigenomics

Malnutrition

of AffluenceThe more affluent we have become, the less nutritious our diet…..

Man’s Diet Then And NowPre-Industrial:

Calorie rich, nutrient dense Biodiversity in diet Significant exercise

Post-Industrial: Calorie rich, nutrient poor Lack of biodiversity in diet Limited exercise

The State of

Our FoodFood processing practices are depleting the quality and diversity of phytonutrients.

Studies are demonstrating a relationship between our (Western) diet and chronic diseases.

Post-industrial agricultural and food processing has removed phytonutrients heretofore thought “inactive” or useless. These compounds are routinely removed from plants through selective breeding and modern processing.

We used to eat from over 800 plant foods, now most Americans eat only three vegetables, namely french fries, ketchup and iceberg lettuce.

We have supplanted our food quantity concerns with consequences in quality.

ProcessedFoods

About 90% of the money that Americans now spend on food goes to buy processed food.

Approximately 10,000 new processed-food products are introduced every year in the United States.

Processed foods tend to contain lower levels of antioxidants than fresh fruits and vegetables and whole grain products.

Fast Food Nation; Dr. David R. Jacobs, University of Minnesota; American Council for Fitness & Nutrition.

FunctionalFoods

Consumers are recognizing the deficiencies in their diet and wish to take an active role in maintaining their wellness and maximize performance.

Food technology and nutritional science allow us to address these issues in a convenient and well-adopted manner:

Functional Foods & Beverages

There are three general types of functional foods & beverages with high marketability.

Types ofFunctional Foods

Food Medicine

Nutritious

Enriched

Enhanced

Engineered

Wellness

Health

Spectrum ofFunctional Beverages

Gut HealthMarket

In the United States alone, around 70 million adults suffer from digestive problems caused by poor consumption habits, high usage of additives for processing of food, and a high rate of antibiotic intake.

1 in 7 people suffers a chronic GI disorder.

76 million get food borne illnesses in the US annually & 40 million travelers get diarrhea.

WhyProbioticsProbiotics represent one of the fastest growing sectors in functional foods.

Global volume consumption is more than 3X that of omega-3, making probiotics the most successful functional ingredient in packaged foods after vitamins and minerals.

The ProbioticNumbers

The global probiotic products market was estimated at $27.9 billion in 2011, expected to reach $44.9 billion in 2018, growing at a CAGR of 6.8% from 2013 to 2018.

Sales of probiotic supplements alone, which account for only about 6% of the supplement market, totaled nearly $2.3 billion last year, outstripping soy products by about $200 million.

In US, per capita spending on probiotic supplements is expected to nearly double by 2016 and overtake Japan.

SPINS, 2011;Aggregated market data; Euromonitor, 2012.

ProbioticFoods

The lion’s share of probiotic sales was in foods and beverages. Sales of probiotic-containing foods grew 31.4% since last year. MarketResearch.com forecast a 7.6% annual growth rate through 2015.

SPINS, 2011.

ProbioticProducts

North America has tremendous growth potential because of consumers’ natural predisposition to taking supplements and consuming dairy products. Also probiotics are increasingly being used for specific conditions such as allergies, travelers’ diarrhea, etc.

Interest inProbiotics

Consumer interest in probiotics as measured by Google traffic 2004-2011; It has multiplied by 3.

The term “probiotics” grew in awareness 567% between 2002-2009 alone, recognized by 60% of Americans.

Natural Marketing Institute, HWTD, 2009.

Interest inProbiotics

81% of Americans ranked probiotics as the most important nutrient in a 2011 study released by IFIC.

57% of shoppers want to learn more about probiotics and immune health.

ProbioticBeverages

A look at a few good examples of probiotic beverages…

Cultured probiotic “shot” Launched over 75 years ago in Japan US sales already exceed 52 million bottles/yr. 6.5 billion CFU/serving Utilize proprietary Lactobacillus Casei Shirota

Yakult

RTD fruit juice with probiotic Launched in 1994 $50MM + annual sales Utilizes Probi LP299v probiotic Danone acquired a 51% stake

ProViva

Probiotic drink “shot” Launched in 2006 Based upon EU success of ProViva Probi LP299v probiotic plus vitamins 20 billion CFU/serving

GoodBelly

Powdered stick pack Fruit flavors, 20 Kcal/serving 2.5 billion CFU Utilizes B-longum BB536, acidophilus LA-14 Also contains prebiotic Inulin

Pre

According to the 2007 National Health Interview Survey, “prebiotics/probiotics” ranked fifth among natural products used for children.

MojoMilk First probiotic powdered chocolate milk mix Convenient stick packs Delivers 10x more active cultures than most yogurt 2 billion CFU/serving utilizing Ganeden BC30 60% less Kcal and 80% less sugar than Nesquik® Immune & digestive claims

Sparkling probiotic RTD 4 billion CFU Utilizes Ganeden BC30, L.paracasei, L. plantarum, L. rhamnosus 20 Kcal/serving

Kevita

Four Keysto Success

Must be endorsed, believed, and adopted by stakeholders.

Must provide taste, perceptible experience, convenience.

Must mitigate risk through scientific research.

Must be a recognizable, understandable or simple proposition.

Food vs.Drug

Successful functional products provide a wellness benefit but don’t masquerade as a therapeutic. Consumers don’t want to eat from their medicine cabinets.

They rely on science for validation, not as a primary selling point.

For “serious” health conditions, consumers have Rx options that are more validated and reimbursed by insurance.

Consumers need drugs, but they want foods.

Consumers eat to enjoy, everything else is secondary

Deliver a lifestyle solution, not a medicine

Most successes:Created new sub-categories

Built new brands, not line extensions

Provide convenience

Taste good

Observationsfor Success

Peter LeightonAbunda Functional Foods, [email protected](801) 550-6962

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