Emerging Ingredients in Food and Drinks: Growth opportunities in flavors and formulation by product category

Especially in the major market countries, more consumers are looking to buy food and drinks products comprised of ingredients that they perceive to be healthy. For many consumers, food and drinks products made with natural ingredients fall into this category, with artificial ingredients being perceived as inherently unnatural and unhealthy.
This report analyzes the ways manufacturers have been responding to the consumer drivers of naturalness and health. These include using natural ingredient formulations which offer benefits of nutritionally rich, quality calories. It examines leading and newly emerging ingredients in each of the major food and drink categories, identifies developing trends within these categories and give examples of recent product launches. Also included are findings from an exclusive international survey of industry executives.


Key features of this report

• • Analysis of the fastest growing claims in newly launched food and drinks products for 2008-2009.
• Analysis of sales values for the natural and organic food and drink market in the US and Europe.
• Identifies emerging ingredients, and analyzes product applications and marketing strategies in NPD, drawing on data from the ProductScan Online NPD tracking service.
• Category analysis, identifying leading and emerging ingredients and developing ingredients trends for each of the major food and drink categories.
• Illustrated examinations of key product introductions and innovations.

Scope of this report

• • Understand how manufacturers are formulating existing and new products to meet consumer demands for natural and healthful food and drink.
• Understand how each of the major food and drinks categories are changing in terms of ingredient formulations.
• • Get up to speed on emerging novel ingredients and the benefits they offer consumers.
• Consider whether you should be looking beyond your present product portfolio for emerging opportunities.
• •Prompt your marketing and NPD teams with product and marketing ideas from around the world.
• •Set goals and objectives for your company’s new product development pipeline.

Key Market Issues

• •Regulatory pressures on manufacturers are firmly in the direction of making food and drinks products healthier. Trends in food and drink ingredients labeling regulations are also becoming more restrictive.
• •In developed markets, as the proportion of consumers interested in natural and healthful food and drinks increases, so will sales of products with naturally nutritionally rich and quality calorie content.
• •In developed markets, concerns about natural and healthful ingredients will fit in with consumers concerns about food and drink ethics – increasingly, healthful will also mean ingredients that are responsibly sourced in terms of social and environmental sustainability.
• •The idea of more gourmet and exotic products will also chime with consumers’ increasing concerns for natural and healthful ingredients – the idea of having premium and/or novel nutritionally rich, quality calories will catch on.
• •The staying power of emerging, novel ingredients will largely depend on meeting consumer demands in terms of taste, provenance and efficacy.


Key findings from this report

• ‘Natural’ was the top claim in food and drink product launches, with a share of 9.24% in 2008 rising to 10.03% in 2009.
• Between 2008 and 2009, soft drinks were the leading category in terms of their share (60.7% in 2009) of products launched with an innovative ingredient formulation, followed by confectionary.
• Manufacturers are driving bakery and cereal ingredient formulations forward by specifying provenance of key ingredients including wheat and garlic, and by specifying the genus of wheat varieties and of other key ingredients such as seeds.
• Probiotics remain a key ingredient theme in the dairy category and had a rising ingredient share in the period 2008-2009.
• A key theme in soft drink ingredient formulations between 2008 and 2009 was more natural ingredient formulations.
• One strategy used by manufacturers of confectionary products to offer benefits of calorie quality and nutritional value is fortification with vitamins and minerals.

Key questions answered

• What are the emerging ingredients trends across each of the major food and drinks categories?
• How are the major multi-national manufacturers responding to consumer demands for natural and healthful, quality calorie ingredients?
• What are the newly emerged novel ingredients and how are they being marketed?
• Which factors effect the commercial success of novel ingredients?
• How are longstanding, established ingredients in each of the major food and drinks categories doing in the light of the trend toward natural and healthful ingredients?
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Table of Contents
About the author 2
Disclaimer 2
Executive summary 12
The emerging food and drinks ingredients market 12
Consumer and market drivers of emerging ingredients 13
Bakery and cereals 14
Dairy 15
Soft drinks 16
Confectionery 17
Savory snacks 18
Other food and drinks categories 19
Chapter 1 The emerging food and drinks ingredients market 20
Summary 20
Introduction 21
Definition of ingredients used in this report 21
Natural and artificial ingredients trends in the food and drinks market 22
The value of the natural food and drinks market 25
Key features of NPD 27
Category share of NPD 27
Leading regions in NPD 2007-2009 28
Products launched with an innovation rating 30
Innovative categories in terms of formulation 30
Important consumer groups for ingredients NPD 32
Key emerging ingredients within health and wellness areas over the next five years 33
Factors important for a new ingredient to achieve commercial success 34
Organizations influence on ingredients NPD 35
Structure of this report 36
Chapter 2 Consumer and market drivers of emerging ingredients 37
Summary 37
Introduction 38
Labeling of food and drink ingredients 39
US 40
Europe 40
Japan 41
Health and wellness 42
Food and drinks ingredients safety: nutritional quality, allergies and intolerances 43
Nutritional quality 43
Food and drink allergies and intolerances 45
Skin health and beauty 47
Eczema 47
Beauty 48
Heart health 49
Weight management 50
Digestive health 52
Cognitive health 54
Ethical food and drinks 57
Global travel, migration and novel and exotic ingredients 58
Individualization, gourmet and indulgence 58
The future 59
Chapter 3 Bakery and cereals 60
Summary 60
Introduction 60
Leading ingredients in bakery and cereals 60
Fast growing ingredients in bakery and cereals 63
New directions for wheat ingredient formulations 63
Product example: wheat in Kashi TLC Tasty Little Crackers All Natural Snack Crackers 63
Product example: wheat, honey and raw sugar cane in Kellogg's Nature's Pleasure 64
Product example: rye in Brinker Hamburger Bread 65
Product example: wild garlic in La Viva Knuspergebaeck Mit Wildem Baerlauch Und Bergkaese (Crunchy Crackers with
Wild Garlic and Mountain Cheese) 67
Seeds: an emerging ingredient trend 68
Product example: hemp, sunflower, sesame and flax seeds in Dr. Karg Bio Organic Crisp Bread 68
Product example: Black and white chia seeds in Pro Bar Fruition Snack Bars 69
Future trends in bakery and cereals ingredients 70
Chapter 4 Dairy 72
Summary 72
Introduction 73
Leading ingredients in dairy 73
Fastest growing ingredients in dairy 75
Novel flavors in dairy products 77
Product example: green tea, tomato and carrot in Dairyland Alive Yogurt 77
Product example: pomegranate in Namyang Natural Start Vulgaris Fermented Milk 78
Targeting consumers through specialized ingredient formulations 79
Product example: ‘free from’ in Soy Free Earth Balance Natural Buttery Spread 79
Future trends in dairy ingredients 80
Chapter 5 Soft drinks 83
Summary 83
Introduction 84
Leading ingredients in soft drinks 84
Leading ingredients losing share 2008-2009 87
Fastest growing ingredients in soft drinks 88
Product example: Botanical extracts in Firefly Fruit Drink with Botanical Extracts 89
Product example: organic botanical ingredients in Tizane 100% Organic Botanical Infusion Elderflower Beverage 91
Product example: organic ginkgo biloba in Cell-nique Organic Super Green Drink 92
Specification of ingredients: an emerging ingredient trend 93
Product example: white grape in BIO Synergy Beauty from Within Water 94
Product example: merlot, syrah and sauvignon blanc grapes in PureBlue SuperJuice 94
Product example: black cherry in North Land Black Cherry Goji Superfruits 100% Juice 95
Future trends in soft drinks ingredients 96
Chapter 6 Confectionery 98
Summary 98
Introduction 99
Leading ingredients in confectionery 100
Leading ingredients in confectionery losing share 102
Fastest growing ingredients in confectionery 102
Product example: organic cocoa in Tohi Chocolat Bio 104
Product example: cranberry and apricots in Cadbury Dairy Milk 105
Product example: pomegranate and passion fruit in Honey Stingers Organic Energy Chews 105
Product example: organic lucuma and goji berries in Navitas Naturals Organic Superfood Chocolate Kit 107
Fortification: an emerging ingredient theme in confectionery 108
Product example: Vitamins and minerals in Frutels Acne Care Chocolate 109
Product example: vitamins and minerals in Atomic Energy Bites Original Energy Soft Chews 110
Future trends in confectionery ingredients 110
Chapter 7 Savory snacks 112
Summary 112
Introduction 113
Leading ingredients in savory snacks 113
Fastest growing ingredients in savory snacks 116
Product example: toasted garlic in Stacy's Bagel Chips 116
Product example: lime and nuts in Living Intentions Gone Nuts! Gourmet Seasoned & Sprouted Nut Blends 117
Healthful ingredients: an emerging savory snack trend 119
Product example: Raw vegetables in RawStarz 100% Raw & Organic Chips 119
Product example: flavored seeds in Pumpkorn Organic Shelled Pumpkin Seeds 119
Future trends in savory snack ingredients 121
Chapter 8 Other food and drinks categories 122
Summary 122
Introduction 123
Hot drinks 123
Leading ingredients 123
Product example: Puerh green tea in Numi Organic Tea 124
Product example: Hibiscus in Socal Cleanse Organic Detox Tea 125
Fastest growing ingredients in hot drinks 126
Product example: Licorice in Kawa Taille de Guepe Activ'Plantes Functional Herb Infusion Tea 127
Product example: chrysanthemum in Vykasa Way of Life Ultra Premium Whole Leaf Tea 128
Future trends in hot drinks 130
Ready meals 130
Leading ingredients in ready meals 131
Product example: Einkorn wheat in Sonnentor Risonnos 131
Product example: organic corn in Glutenfreeda's Wheat Free Gluten Free Burritos 132
Fastest growing ingredients in ready meals 133
Product example: wheat noodles in Nagatanien Ramen Pasta 134
Product example: Portobella mushrooms in Crepini Cafe Frozen All Natural Crepes Handmade with Gourmet Filling
Future trends in ready meals 136
Chapter 9 Key players and conclusions 137
Most innovative manufacturers/brands in ingredients NPD 137
Nestlé 137
Danone 139
Wild Flavors Inc. 140
Future foods: emerging ingredients trends in food and drink 141
Bakery and cereals 141
Dairy 142
Soft drinks 142
Confectionery 142
Savory snacks 143
Hot drinks 143
Ready meals 143
Barriers to growth opportunities for emerging ingredients 144
Production costs of natural ingredients 144
Novelty and staying power 144
Food ethics verses exotics 144
Regulatory environment 145
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Figure 1: Category Share of NPD, global, 2007-2009 27
Figure 2: Leading regions in share of NPD, 2007-2009 28
Figure 3: Please RANK in order the regions which currently lead in ingredients NPD now and in the next five years? 29
Figure 4: Innovative feature, of all products launched with an innovation rating, 2007-2009 30
Figure 5: Category share of innovative ingredient formulation, %, 2008-2009 31
Figure 6: Please rate how IMPORTANT you think the following consumer groups will be for ingredients NPD over the NEXT 5 years 32
Figure 7: Factors influencing the commercial success of new ingredients 35
Figure 8: Influence of organizations on current ingredients NPD 36
Figure 9: Key consumer and market drivers impacting upon trends in food and drinks ingredients 39
Figure 10: Please rate how IMPORTANT each of the following health areas will be in food and drinks NPD over the NEXT 5 years. 42
Figure 11: Glutenfreeda's Wheat Free Gluten Free Instant Oatmeal 62
Figure 12: Kellogg's Nature's Pleasure 65
Figure 13: Brinker Hamburger Bread 66
Figure 14: Knuspergebaeck Mit Wildem Baerlauch Und Bergkaese (Crunchy Crackers With Wild Garlic And Mountain Cheese) 67
Figure 15: Dr. Karg Bio Organic Crisp Bread 69
Figure 16: Fruition Snack Bars 70
Figure 17: Wallaby Organic Down Under Lots of Fruit Low fat Yogurt 73
Figure 18: Naturally Light Yogurt 77
Figure 19: Dairyland Alive Yogurt 78
Figure 20: Namyang Natural Start Vulgaris Fermented Milk 79
Figure 21: Soy Free Earth Balance Natural Buttery Spread 80
Figure 22: Kubus Play! Carrot & Fruit Drinks 86
Figure 23: Firefly Fruit Drink with Botanical Extracts 90
Figure 24: Tizane 100% Organic Botanical Infusion Elderflower Beverage 91
Figure 25: Cell-nique Organic Super Green Drink 93
Figure 26: PureBlue SuperJuice 95
Figure 27: Tru Chocolate 102
Figure 28: Tohi Chocolat Bio Organic Dark Chocolate Bar 104
Figure 29: Cadbury Dairy Milk Cranberry and Granola and Apricot Crumble Crunch 105
Figure 30: Honey Stingers Organic Energy Chews 106
Figure 31: Navitas Naturals Organic Superfood Chocolate Kit 107
Figure 32: Frutels Acne Care Chocolate 109
Figure 33: Atomic Energy Bites Original Energy Soft Chews 110
Figure 34: Blue Ginger Black Sesame and Sea Salt Multi-grain Brown Rice Chips 115
Figure 35: Stacy’s Bagel Chips 116
Figure 36: Gone Nuts! Gourmet Seasoned and Sprouted Nut Blends 118
Figure 37: Pumpkorn Organic Shelled Pumpkin Seeds 120
Figure 38: Numi Organic Tea 125
Figure 39: Socal Cleanse Organic Detox Tea 126
Figure 40: Kawa Taille de Guepe Activ'Plantes Functional Herb Infusion Tea 128
Figure 41: Vykasa Way Of Life Ultra Premium Whole Leaf Tea 129
Figure 42: Sonnentor Risonnos 132
Figure 43: Glutenfreeda's Wheat Free Gluten Free Burritos 133
Figure 44: Crepini Cafe Frozen All Natural Crepes 135
Figure 45: Natural ingredients in Nestlé Milkybar 138

Table 1: The 10 fastest growing claims in new products launched (%), 2008-2009 24
Table 2: Value of the US and European organic food and drink market, by country, $bn, 2000- 2010 25
Table 3: The natural (excluding organic) food and drinks market in Europe and US, by key product categories ($bn), 2000-2010 26
Table 4: Key emerging ingredients within health and wellness 33
Table 5: Per capita fruit consumption, European countries and the US, kilograms/person, 2001-2011 44
Table 6: Market value for the allergen and intolerance food market in Europe and US ($m), 2001-2011 46
Table 7: Estimated prevalence of atopic dermatitis across seven major markets (‘000s), 2005 47
Table 8: Oral beauty supplements market value in Europe and US ($m), 2001-2011 49
Table 9: Prevalence of cardiovascular disease in the 7 major markets (‘000), 2005 50
Table 10: Number of overweight and obese adults (15+ years old) by country (millions), 2002- 2012 51
Table 11: Estimated prevalence of IBS in seven major markets (‘000s), 2008–10 53
Table 12: Consumer survey: the extent to which Europeans feel they have 'lots of energy' 55
Table 13: Prevalence of Alzheimer’s disease across the seven major markets (‘000s), 2007-0956
Table 14: Top twenty leading ingredients in bakery and cereals, ranked by share, 2008-2009 61
Table 15: Top twenty fastest growing ingredients in bakery and cereals, 2008-2009 64
Table 16: Top twenty leading ingredients in dairy, ranked by share, 2008-2009 74
Table 17: Top twenty fastest growing ingredients in dairy, ranked by growth, 2008-2009 76
Table 18: Top twenty leading ingredients in soft drinks, ranked by share, 2008-2009 85
Table 19: Top twenty fastest growing ingredients in soft drinks, ranked by growth, 2008-200989
Table 20: Top 20 leading ingredients in confectionery, by share, 2008-2009 100
Table 21: Top 20 fastest growing ingredients in confectionery, 2008-2009 103
Table 22: Top 20 leading ingredients in savory snacks, by share, 2008-2009 114
Table 23: Top 20 fastest growing ingredients in savory snacks, 2008-2009 117
Table 24: Top 10 leading ingredients in hot drinks, by share, 2008-2009 124
Table 25: Top 10 fastest growing ingredients in hot drinks, 2008-2009 127
Table 26: Top 10 leading ingredients in ready meals, ranked by share, 2008-2009 131
Table 27: Top 10 fastest growing ingredients in ready meals, 2008-2009 133
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