"Consumers are looking for health benefits from the food and drink they buy, rather than just sustenance," says Jon Walsh, director of new business at Nestlé UK. "They are also looking for products that contain natural ingredients."

Last September, Unilever's president of foods, Vindi Banga, announced his ambition to transform as many of the company's brands as possible into functional foods, predicting continued opportunities in the sector. He said this strategy would give brands in static or declining markets an opportunity to revitalise their appeal.

According to figures from Mintel, the market for functional food rose by 171% between 2002 and 2007 to £613m, driven by greater health awareness among consumers, high levels of NPD and big marketing budgets.

"Consumers are looking towards personalised nutrition and health maintenance," says Bryan Martins, customer development controller at Danone, which owns Activia and Actimel. "This has helped maintain the growth of the functional food market."

However, there are signs that, while the bubble has not yet burst, it is leaking air. Growth slowed last year, mainly due to the decline in the functional yogurt drinks sector as consumers became sceptical over health claims.

"There's been a rationalisation of brands [within yogurt drinks] which has helped simplify the category message, and we've now seen sales stabilise. There are drinks outperforming the market - Actimel, Benecol and Yakult - which all have real clarity in their proposition," says Martins.

The active health drinks and yoghurt category is valued at £402m and is growing at an annual rate of 4%. The category is being driven by yogurt, which grew 24% during the past 12 months. It is dominated by Activia, which accounts for more than 80% of the category and grew 32% over the same period. However, the drinks category fell 7% during 2007 [Nielsen, May 08].

"Although functional yogurts are performing relatively well, their growth has slowed over the past year and the yogurt drinks sector has started to decline," says Chris McDonough, Müller UK's marketing director. "People have started to opt out of the functional sector and we have undertaken consumer research to understand why this is happening."

McDonough says the research found that the main barriers to purchasing functional products are: a lack of trust that the products have any real benefit; a perception that it's all hype and not real science; and a scepticism that the products do not contain enough of the beneficial ingredients to make a real difference.

"These are issues which need to be addressed if we are going to bring in new users and encourage lapsed users to return," he adds.

Müller has gone back to the drawing board with its Vitality range, taking out the Omega-3, which consumers said they found confusing, and increasing the prebiotic content from 1g to 2.5g so that each pot and bottle now contains 50% of the recommended daily amount.

Clarity of message is something that could define the functional foods category going forward.

The fact that Activia, Benecol and Yakult are all growing is partly down to their marketing spend but also because they're trying to communicate complex scientific credentials to consumers in a simple way.

Alan Jelly, marketing director for Yakult, says people want things delivered in an easy and straightforward way. "They don't want to have to measure out how much they should be drinking or eating," he explains. "This is why we have packaged Yakult in a 65ml bottle with one bottle for each day of the week in a pack.

"Consumers aren't impressed by complicated explanations that leave them confused. You can deliver science in a friendly and simplistic way that adds value to the brand and to consumer understanding," he says.

Rimi Obra-Ratwatte, senior nutritionist at Kellogg's, argues that the difficulty for marketers is to strike a balance between promoting specific scientific benefits and a reassurance that the product is good for overall wellbeing.

"People are looking for quick and easy, but enjoyable, ways to take nutrients," she says. "People want to be seduced by the science, but in a way that is still quite simple."

This challenge will become more difficult with the introduction of tighter laws on what marketers can say in advertising (see panel, left).

Obra-Ratwatte describes herself as a conduit between the health claims and the brand marketing team. "I help them translate complex scientific messages into consumer-speak," she says.

In the case of the launch of Special K Sustain, a product designed to make consumers feel fuller for longer, and thus reduce their desire to snack, Obra-Ratwatte advised marketers not to talk about gut hormones - key to the science behind the satiety effect - in its advertising. "We have to engage them with the scientific platform, but not by talking about the intricacies of satiety."

However, Kellogg's has also learned it must avoid communications that can lead to the health benefit message being lost. In 2004, it launched pre-biotic kids' cereal Rice Krispies Muddles, but quickly changed the name to Rice Krispies Multigrain to make its health credentials more obvious. n

what the buyers are saying

I believe this is going to be the year functional drinks start to fulfil their potential. Tesco is keen to lead the way in this exciting new area and for the first time this year we have dedicated fixtures in our larger stores for health and wellbeing drinks. We have been introducing innovative new products, many from smaller suppliers, for some time and have been pleased with the performance of some of the lines we have introduced. We think shoppers are starting to get interested in this category and some of these brands have the qualities necessary to make it into the mainstream.

Jane Potter

soft drinks buyer, Tesco

what the brands are saying

There has been a huge change in attitudes towards health in the UK in the past few years. Consumers are more health aware and are looking for foods that can help improve their overall health. There are also those that suffer from particular health problems who don't want to take another medicine and who are keen to find foods that can help them control or reduce the symptoms. Functional drinks such as Yakult address these needs and also help people think about prevention instead of waiting until they need a cure.

Alan Jelly

marketing director, Yakult

CLARITY OF PURPOSE

Rather than trying to blind consumers with science, marketing of functional is now stressing the benefits

When it comes to backing their brands with marketing, manufacturers are keen to put their money where their mouths are - Müller's £2.5m support package for the relaunch of Vitality is just one example.

Communicating the benefits of a functional product is vital to getting the brand's messages across, but rather than blind consumers with science, the clearer the message, the more successful and greater the cut-through will be.

"TV has been an important way for us to communicate the message," says Bryan Martins, customer development controller at Danone. "We are seeing other channels take off, such as the Internet, as people become information-hungry. That's why we have a website, as we can talk to consumers about what the product does. Another key area is communicating on pack - with bold words and the 'scientifically proven' stamp, and by keeping the message to one benefit."

Yakult marketing director Alan Jelly agrees that TV has an important role to play in the marketing mix and that it helps build brand awareness as well as communicating key product benefits. "However," he says, "long-term relationship building and direct consumer contact supports the development of the brand. The marketing mix should be consistent and all aspects of the plan should work in synergy. The market has a vast offering of products, and consumers can often get confused about which products do what."

For new products, he says, sampling can play a big part in delivering success. "Consumers can sometimes be reluctant to pay for something they may not like or understand," adds Jelly. "By getting products into hands it overcomes some of these barriers."

He also says consumers are becoming more interested in what the packaging tells them. "People want to be able to pick up a pack and find all the information they are looking for. Nutritional information should be easy to find, ingredients should be clear and product benefits prominent," says Jelly.

"This is why, when a consumer picks up a pack of Yakult, what stands out are the benefits of Yakult - in a way that engages the consumer."

A COMPELLING CASE

Brands and retailers now have to navigate tougher European regulations when making functional claims

In its recent report into the functional foods sector, Mintel revealed that consumer cynicism over health claims were one of the key obstacles holding back wider purchasing of the sector. In short, manufacturers have to be able to walk the walk as well as talk the talk.

In July 2007, the EU brought in regulations on nutrition and health claims that govern what food and drink manufacturers can say about their products. All health claims that are made on packaging and advertising must be substantiated by scientific evidence.

The EU has set up an approval system for health claims, based on assessment of supporting scientific evidence. All products must go through this system before they can carry a health claim.

This is not a problem for Yakult, which was first launched in the UK in 1996 as one of the first probiotic products in Europe.

"Every year Yakult invests considerable resources into trials and research around the world, which has helped to establish its reputation as a credible scientific company," says marketing director Alan Jelly.

"We are constantly conducting new studies as consumers become more interested in the science behind probiotics. As a science-led business we promote and encourage consumers to learn about the benefits and understand the science."

Bryan Martins, customer development controller at Danone, agrees. "We've worked on communicating the science behind the brand to consumers. Through our website you can look at our scientific evidence. A lot of money is spent on research to show that the product does what it says it does."

Meanwhile, Müller is putting more emphasis on the prebiotic content of its relaunched Vitality brand and has doubled the prebiotic content.

"At 2.5g per pot or bottle, Vitality now delivers half the daily amount that can have a beneficial impact on the digestive system. We will be communicating this on pack and via our website so that consumers have a clearer understanding of the contribution prebiotics will make to their diet and wellbeing," says Chris McDonough, Müller UK's marketing director.

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