Chapter 1: Executive Summary

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1 Chapter 1: Executive Summary Definition, Scope, and Methodology Related Terms Functional Foods Nutraceuticals Foods for Special Dietary Use Condition-specific Nutritional Supplements Medical Foods Medical Nutrition Therapy Clinical Nutrition Personalized Nutrition Diet Is Implicated in Leading Causes of Death and Disability Table 1-1: 15 Leading Causes of Death in the U.S. The Regulatory Environment United States Canada Europe and UK Japan Australia/New Zealand People s Republic of China Market Factors The Diet-Disease Link Diseases Linked to Diet Kill Three Out of Four Americans More Than 6 in 10 Shoppers Buy Targeted Health and Wellness Foods Table 1-2: Purchasing of Targeted Food and Beverage Products, by Specific Health or Cholesterol, Digestive Health of Particular Concern Figure 1-1: Purchasing of Targeted Food and Beverage Products, by Specific Health Concern, 2011 (percent of U.S. grocery 4 in 10 Shoppers Frequently Purchase Targeted Foods and Beverages THW Shoppers Are Cutting Back on Grocery Spending But They Are Also More Willing to Pay More for Better-for-You Foods Market and Marketers Oatmeal, Yogurt Top Choices for THW Consumers Table 1-3: Purchasing of Selected Types of Grocery Products With Targeted Health/Wellness Positioning, 2011 (percent of U.S. grocery Credibility the Most Influential Factor in THW Purchases Figure 1-2: Most Important Factors in Targeted Health/Wellness Food and Beverage Purchase Decisions, 2011 (percent of U.S. grocery Companies Use Relationships With Medical Community to Promote Products

2 Clinical Trials Generate Confidence Among Consumers, Practitioners Industry Structure Acquisitions, Partnerships Characterize the THW Industry The Retail Marketplace Price Promotions Prompt Purchases, Special Merchandising Not So Much Figure 1-3: Comparative Influence of Retailer Marketing on THW Purchases, 2011 (percent of U.S. grocery In-Store Literature More Valuable for Information Than Employees Figure 1-4: Comparative Importance of Retailers as a Source of Information About Nutrients in Food, 2011 (percent of U.S. grocery Is There a Dietitian in the House? Product Trends and Opportunities North America, Asia Top Regions for THW Introductions Women s Health, Immunity the Leading Categories Figure 1-5: Global Targeted Health and Wellness Product Introductions, by Health Concern, (share of reports) Beverages Are Marketers Vehicle of Choice for Health and Wellness Benefits United States Represents Nearly One-Third of Global THW Introductions THW Consumers Buy Oatmeal and Yogurt Figure 1-6: Purchasing of Selected Types of Grocery Products Due to Specific Health or Products Benefits Are Increasingly Supported by Scientific Evidence Consumer Trends Three in Four Shoppers at Least Occasionally Buy Targeted Health and Wellness Foods Figure 1-7: Frequency of Purchasing Grocery Products Because of Nutritional Advantages Addressing Specific Health Concerns, 2011 (percent of U.S. grocery Two-Thirds Buy Groceries Explicitly Marketed as THW Products Figure 1-8: Frequency of Purchasing Grocery Products Marketed or Labeled as Targeting Specific Health Concerns, 2011 (percent of U.S. grocery Condition-Specific Grocery Shoppers Pursue Broader Wellness Goals Chapter 2: The Products Definition and Scope Related Terms Functional Foods Figure 2-1: Minute Maid Enhanced Juices Nutraceuticals Foods for Special Dietary Use Condition-specific Nutritional Supplements

3 Table 2-1: Selected Condition-Specific Nutritional Supplements Tracked by SymphonyIRI Medical Foods Medical Nutrition Therapy Clinical Nutrition Personalized Nutrition You Are What You Eat, After All Diet Implicated in Leading Causes of Death and Disability Table 2-2: 15 Leading Causes of Death in the U.S. The Regulatory Environment Permissible Label Statements Range From Informative to Why Bother? Health Claims Table 2-3: Requirements for Use of Fiber/Heart Disease Health Claim in Food Labeling Qualified Health Claims (QHCs) Table 2-4: Standardized Qualifying Language for Qualified Health Claims Table 2-5: Qualified Health Claims Structure/Function (S/F) Claims Dietary Guidance Nutrient Content Claims (NCCs) Table 2-6: Comparison of Health Claims, Qualified Health Claims, Structure/Function Claims, and Dietary Guidance Statements Chapter 3: Market Factors/Macro-Trends The Diet-Disease Link Diseases Linked to Diet Kill Three Out of Four Americans Table 3-1: Projected U.S. Population by Age Bracket, (in thousands) Purchasing Patterns More Than 6 in 10 Shoppers Buy Targeted Health and Wellness Foods Table 3-2: Purchasing of Targeted Food and Beverage Products, by Specific Health or Cholesterol, Digestive Health of Particular Concern Figure 3-1: Purchasing of Targeted Food and Beverage Products, by Specific Health Concern, 2011 (percent of U.S. grocery Seventy Percent of Shoppers Purchase Food/Beverage Products Specifically for Nutritional Content Figure 3-2: Purchasing of Food and Beverage Products for Specific Nutritional Benefits, 2011 (percent of U.S. grocery Just Under 70% of Shoppers Buy Beverages for Special Nutritional Benefits Figure 3-2: Purchasing of Specific Beverage Products for Special Nutritional Benefits, 2011 (percent of U.S. grocery 4 in 10 Shoppers Frequently Purchase Targeted Foods and Beverages Half of All Shoppers Are Driven by Wellness Goals and Concerns

4 Table 3-3: Agreement with the Statement The groceries I buy are determined in part by specific wellness goals and concerns, by Health Concern, 2011 (percent of U.S. THW Shoppers Are Cutting Back on Grocery Spending Table 3-4: Agreement with the Statement I am cutting back on grocery spending these days, by Health Concern, 2011 (percent of U.S. But They Are Also More Willing to Pay More for Better-for-You Foods Table 3-5: Agreement with the Statement I am willing to pay more for better-for-you grocery products, by Health Concern, 2011 (percent of U.S. THW Shoppers Will Pay More for Quality Groceries Table 3-6 Agreement with the Statement I am willing to pay more for higher-quality groceries, by Health Concern, 2011 (percent of U.S. The Regulatory Landscape U.S. Food and Drug Administration Health Canada European Food Safety Authority UK Food Standards Agency/Department of Health Japanese Ministry of Health, Labor, and Welfare Food Standards Australia New Zealand State Food and Drug Administration, People s Republic of China Chapter 4: Marketing Strategies and Trends Communicating Benefits Oatmeal, Yogurt Top Choices for THW Consumers Table 4-1: Purchasing of Selected Types of Grocery Products With Targeted Health/Wellness Positioning, 2011 (percent of U.S. grocery Figure 4-1: Purchasing of Selected Types of Grocery Products With Targeted Health/Wellness Positioning, 2011 (percent of U.S. grocery Credibility the Most Influential Factor in THW Purchases Figure 4-2: Most Important Factors in Targeted Health/Wellness Food and Beverage Purchase Decisions, 2011 (percent of U.S. grocery Frequent THW Shoppers Are Exceptionally Influenced By Health Benefit Reputation Table 4-2: Most Important Factors in Targeted Health/Wellness Food and Beverage Purchase Decisions, by Frequency of Purchase, 2011 (percent of U.S. grocery Health Benefit Reputation Also Influences Decision to Purchase High-Antioxidant or High-Omega Foods Figure 4-3: Most Important Factors in High-Antioxidant Food and Beverage Purchase Decisions, 2011 (percent of U.S. grocery Figure 4-4: Most Important Factors in High-Omega Food and Beverage Purchase Decisions, 2011 (percent of U.S. grocery Internet the Most Valuable Source of Information About Nutrients Table 4-3: Most Important Sources of Information About Nutrients in Food, 2011 (percent of U.S. grocery

5 Positive Food Messages, Third-Party Certification Increasingly Effective Figure 4-5: Consumer Preferences Regarding Food Messaging (percent of U.S. adults) Marketing Strategies Companies Use Relationships With Medical Community to Promote Products Marketing to Practitioners Can Be Rewarding, But Challenges Remain Nutrition Education in Medical Schools Is Inadequate Nutrition Professionals Represent a Prime Target Clinical Trials Generate Confidence Among Consumers, Practitioners Industry Structure Acquisitions, Partnerships Characterize the THW Industry Innovator Profile: Abbott Nutrition Advances Science-Based Nutrition Innovator Profile: Raisio Group a Pioneer in Both Clinical Trials and Medical Marketing Innovator Profile: Nestlé Health Science s Vision Is To Create a New Food/Pharma Paradigm Chapter 5: The Retail Marketplace A Note on Consumer Data More Than 6 in 10 Shoppers Buy Targeted Foods and Beverages Table 5-1: Purchasing of Targeted Food and Beverage Products, by Specific Health or Where THW Shoppers Buy Groceries Alternative Channels Are Exceedingly Popular Table 5-2: Leading Retail Channels for THW Consumers, by Health or Wellness Concern, 2011 (percent of U.S. grocery shoppers; indices of 150+) THW Shoppers Buy Groceries Through a Wider Variety of Channels Table 5-3a Purchasing Patterns of THW Consumers, by Health Concern and Retail Table 5-3b: Purchasing Patterns of THW Consumers, by Health Concern and Retail Table 5-3c: Purchasing Patterns of THW Consumers, by Health Concern and Retail Table 5-3d: Purchasing Patterns of THW Consumers, by Health Concern and Retail Table 5-3e: Purchasing Patterns of THW Consumers, by Health Concern and Retail Table 5-4: Retail Channel Preferences, by Health Concern, 2011 (index) Diet-Conscious and Health-Proactive Consumers Favor Supertarget, Natural Food Chains Table 5-5: Grocery Channel Preferences of Consumers Watching Their Diet, by Health Concern, 2011 (percent and index of U.S. adults) Table 5-6: Attitudes Toward Health, Medicine, and Diet: Psychographic Indicators for Grocery Channel Preferences, 2011 (percent and index of U.S. adults)

6 Retailers Role in THW Buying Decisions Price Promotions Prompt Purchases, Special Merchandising Not So Much Figure 5-1: Comparative Influence of Retailer Marketing on THW Purchases, 2011 (percent of U.S. grocery In-Store Literature More Valuable for Information Than Employees Figure 5-2: Comparative Importance of Retailers as a Source of Information About Nutrients in Food, 2011 (percent of U.S. grocery Scoring Systems Help Shoppers Choose Better-For-You Foods Is There a Dietitian in the House? Chapter 6: Product Trends and Opportunities A Note on Methodology Global Overview North America, Asia Top Regions for THW Introductions Women s Health, Immunity the Leading Categories Figure 6-1: Global Targeted Health and Wellness Product Introductions, by Health Concern, (number of reports) Figure 6-2: Global Targeted Health and Wellness Product Introductions, by Health Concern, (share of reports) Figure 6-3: Global Targeted Health and Wellness Product Introductions, by Health Concern, (number of SKUs) Figure 6-4: Global Targeted Health and Wellness Product Introductions, by Health Concern, (share of SKUs) Beverages Are Marketers Vehicle of Choice for Health and Wellness Benefits U.S. Overview United States Represents Nearly One-Third of Global THW Introductions Immunity Accounts for One in Five New Products in U.S. Figure 6-5: U.S. Targeted Health and Wellness Product Introductions, by Health Concern, (number of reports) Figure 6-6: U.S. Targeted Health and Wellness Product Introductions, by Health Concern, (share of reports) Figure 6-7: U.S. Targeted Health and Wellness Product Introductions, by Health Concern, (number of SKUs) Figure 6-8: U.S. Targeted Health and Wellness Product Introductions, by Health Concern, (share of SKUs) Figure 6-9: U.S. Targeted Health and Wellness Product Introductions, by Health Concern, 2011 (share of SKUs) Table 6-1: U.S. Targeted Health and Wellness Product Introductions, by Health Concern, 2007 vs (share of SKUs) Half of Hot Cereal, Yogurt, Fresh Produce Purchasers Are THW Consumers

7 Table 6-2: Purchasing of Selected Types of Grocery Products Due to Specific Health or Figure 6-10: Purchasing of Selected Types of Grocery Products Due to Specific Health or Orange Juice Is the Beverage Most Often Purchased for Nutritional Benefits Figure 6-11: Purchasing of Specific Beverage Products for Special Nutritional Benefits, 2011 (percent of U.S. grocery Fiber, Vitamins, Minerals the Most Desirable Nutritional Content Figure 6-12: Purchasing of Food and Beverage Products for Specific Nutritional Content, 2011 (percent of U.S. grocery Fruit Juice Is Selected for Antioxidant Content, Fish for Omega Fats Superfruits Figure Prominently in New Products Table 6-3: Key Ingredients in New Targeted Health and Wellness Food and Beverage Products (by ingredient and specific health concerns addressed) Products Benefits Are Increasingly Supported by Scientific Evidence Next-Generation Technological Innovations Deliver Table 6-4: Selected New Targeted Health and Wellness Food and Beverage Products Chapter 7: Consumer Trends Findings Are Based Primarily on Packaged Facts Proprietary Surveys 80% of Shoppers Buy Groceries Because of Special Nutritional Characteristics at Least Some of the Time Figure 7-1: Frequency of Purchasing Grocery Products Because of Special Nutritional Characteristics, 2011 (percent of U.S. grocery Three in Four Shoppers at Least Occasionally Buy Targeted Health and Wellness Foods Figure 7-2: Frequency of Purchasing Grocery Products Because of Nutritional Advantages Addressing Specific Health Concerns, 2011 (percent of U.S. grocery Two-Thirds Buy Groceries Explicitly Marketed as THW Products Figure 7-3: Frequency of Purchasing Grocery Products Marketed or Labeled as Targeting Specific Health Concerns, 2011 (percent of U.S. grocery Nonwhite Shoppers Are Heavier Consumers of Groceries Explicitly Marketed as THW Foods and Beverages Table 7-1: Demographic Indicators Favoring Frequent Purchase of Groceries Explicitly Marketed as THW Products, 2011 (percent of U.S. grocery Table 7-2: Demographic Indicators Favoring Occasional or More Frequent Purchase of Groceries Explicitly Marketed as THW Products, 2011 (percent of U.S. grocery Age Is the Leading Demographic Indicator for Purchase of THW Groceries for Most Health Concerns Table 7-3: Selected Demographic Indicators for Purchase of Targeted Health/Wellness Foods, by Health Concern, 2011 (percent of users and index of U.S. grocery Distinct Gender Differences Exist for Different Health Concerns Table 7-4: Purchasing of Targeted Health/Wellness Foods, by Health Concern and Gender, 2011 (percent of users and index of U.S. grocery

8 THW Grocery Shopper Profile Skews Upscale Table 7-5: Selected Demographic Indicators for Purchase of Targeted Health/Wellness Foods, by Health Concern, 2011 (percent of U.S. grocery Seniors Exceed All Other Demographics in Rate of Purchase of THW Grocery Products of All Types Table 7-6: Selected Demographic Indicators for Use of Targeted Health and Wellness Foods, by Type of Grocery Product, 2011 (percent and index of U.S. grocery But Boomers Comprise a Larger Customer Base Table 7-7: Selected Demographic Indicators for Use of Targeted Health and Wellness Foods, by Type of Grocery Product, 2011 (percent of U.S. grocery Demographics for Use of Certain THW Brands Skew Upscale Table 7-8: Demographic Indicators for Use of Targeted Health and Wellness Foods, by Brand or Brand Line, 2011 (percent and index of U.S. adults) THW Shoppers Say They Are in Good Physical Health Table 7-9: Agreement With the Statement I Am in Good Physical Health, by Health Concern, 2011 (percent of U.S. grocery Table 7-10: Agreement With the Statement I Have a Serious Medical Condition/Disease, by Health Concern, 2011 (percent and index of U.S. grocery Condition-Specific Grocery Shoppers Pursue Broader Wellness Goals Table 7-11: Psychographics Regarding Health and Wellness Goals, by Health Concern, 2011 (percent and index of U.S. grocery Table 7-12: Use of Nutritional Supplements, by Health Concern,2011 (percent and index of U.S. grocery Table 7-13: Importance of Nutritional Supplements, by HealthConcern,2011 (percent and index of U.S. grocery Table 7-14: Use of Prescription Medication, by Health Concern, 2011(percent and index of U.S. grocery Appendix I Selected Dietary Components With Potential to Address Key Health Concerns Appendix II Selected Branded Foods/Ingredients Tested in Human Clinical Trials Appendix III Addresses of Selected Marketers

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