The New Apple a Day

Selling the Health Benefits of Enriched 'Phoods'

The introduction of iodine to Morton Salt in 1924 was instrumental in eradicating a dangerous thyroid condition called goiter from the U.S. population. It was also the first time a food company purposely added a medically beneficial ingredient to food to help market that product.

Eighty years later, the food industry is intensively researching all kinds of other healthful ingredients it hopes to use to help sell otherwise everyday foods.

Functional foods, or "phoods" as they're sometimes called to connote the intersection of food and pharmaceuticals, have been trickling into supermarkets over the past several years -- think of calcium-enhanced orange juice and cholesterol-lowering margarine, for example. But they met with mixed success because consumers didn't know or care enough about the new ingredients.

Now, though, consumers' growing awareness of health and nutrition, and new regulatory rulings that will make it easier for manufacturers to make health claims on packaging are re-energizing the "phood" business. Once again, food companies see functional foods as a way to boost sales in a highly competitive market.

"It's definitely a big deal," said David Lockwood, editor of a recent report on functional foods by market research giant Mintel International Group Ltd. "We expect [the functional foods business] to grow about 7.6 percent annually through 2008 -- that's about twice as fast as the overall food market is going to be growing."

That kind of prediction is pushing companies like Kraft and Nestle headlong into nutritionally enhanced fare. At the recent annual meeting of the Food Marketing Institute, fully half of the 75 new products Kraft introduced had a "health and wellness" focus, the company said. That's up from 15 percent of its new products the year before. Many of these products have added vitamins and minerals, such as a new Kool-Aid that provides 100 percent of a child's daily vitamin C requirement and the Creme Saver Smoothie boosted with calcium.

Lutein, linked to vision health, is now added to Sunsweet Prune Juice. Soy protein, which can help prevent heart disease, is being added to cereals such as Kellogg's Smart Start. Food giant Nestle is actively unveiling products overseas, including yogurt with probiotic bacteria, to aid digestion. Nestle's nutritionally oriented products make up just 8 percent of company sales but account for 20 percent of its research budget, according to company spokesman Hans-Joerg Renk.

"There's a lot of research and development going on into what kinds of products people want, what kind of products can we produce to meet the demand -- that taste good and will be successful in the marketplace -- and how do we communicate the benefits," said Michael E. Diegel, a spokesman for the Grocery Manufacturers of America.

Glaceau Vitamin Water, spiked with nutrients such as taurine, vitamin C, calcium and potassium can be found on shelves of gourmet shops and supermarkets. Officials at privately owned Energy Brands Inc. attribute much of what they say has been dramatic growth in sales to consumers' rising interest in nutrition and wellness.

Company founder and chief executive J. Darius Bikoff said some major food companies rushed into the functional foods category several years ago without enough understanding of consumers and little patience when the idea didn't catch on right away.