Even in these tough economic times, eating healthy foods remains a priority for most consumers, and many are still willing to pay a little bit extra for possible health benefits they can believe in – provided the taste is right. Here we highlight some current trends in nutraceuticals, with a focus on one recent success story – coconut water.

Women’s health

The key driving force behind the success or failure of many functional foods and nutraceuticals are women. As recently noted by Mitch Skop, senior director of new product development, Pharmachem Laboratories, "Women tend to understand the needs of their bodies better than men. Whether the questions go to the pros and cons of estrogen therapy or prenatal nutrition, women have always been at the forefront of health and wellness." In addition to prenatal nutrition and anti-aging, one area of women’s health that is drawing increased attention is iron supplementation. Many women experience anemia, and the resulting fatigue, especially during pregnancy. Foods and beverages fortified with iron might be attractive products for women seeking to boost their iron levels, as prescribed iron supplements often cause stomach upset, heartburn and constipation, resulting in non-compliance. Of course, the major market for products targeted towards women remains weight loss. However, increasing regulatory scrutiny has led many manufacturers to tone down their weight-loss claims or remove them entirely. In any case, women as a consumer group are becoming increasingly sceptical of broad health claims without supporting evidence, given the lack of efficacy of many products and increasing consumer awareness. As most companies know, it is also important to remember the majority of food purchase decisions are made by women – of course not just for their own consumption, but for their families as well. Given that women’s health issues often overlap with men’s, this is something that product and marketing managers should keep in mind.

Men’s health

In the area of men’s health, manufacturers of nutraceuticals and functional foods have a real challenge on their hands – and possibly a real opportunity. Although men face many of the same challenges as women, there are very few products designed and marketed specifically for men. This is not because men are healthier. In fact, more men die from cancer than do women, and might thus benefit from preventive strategies involving increasing antioxidant intake (e.g. superfruit-based ingredients). Many men also suffer from post-partum depression, which in men is referred to as "paternal depression". Here, mood-boosting ingredients might, with some very careful marketing, be able to help (e.g. Ginkgo biloba, omega-3, St. John’s wort). Here, manufacturers face a marketing challenge – namely, how to move beyond sex-themed advertising and sports-themed products. In certain cases, one underutilized route might be to bypass men by marketing directly to their purchasing managers – women (see above).

Sports

Functional beverages, particularly those targeted at athletes, have experienced few new product introductions recently. One area of innovation is in all-natural drinks. According to Netherlands-based Innova Market Insights, "The most popular health-related claims recorded by Innova Market Insights during 2010 were undoubtedly concerned with naturalness and freedom from artificial additives and preservatives. This encompassed a wide range of products, led by juices and water, which tend to be seen as inherently fairly natural." Perhaps it comes as no surprise then that one of the most rapidly growing products in this area is coconut water.

Coconut water

Over the past several years, coconut water has steadily advanced as possibly the next big product in sports hydration. The main advantages of coconut water are three-fold: it is all-natural, low-calorie, and rich in electrolytes. Endurance athletes and spa customers were the first enthusiasts, then Pepsi and Coca-Cola got interested. In 2009, Pepsi bought Amacoco, the biggest coconut water company in Brazil; in late 2010, Pepsi bought one of the top US brands, O.N.E. Coco-Cola now holds a minority stake in Zico, which currently has almost one-third of the US market – about $200 million in annual sales. Following the time-honoured wisdom of using celebrity power to market new products, Zico recently enlisted the services of basketball star Kevin Garnett, who plays for the Boston Celtics. As an endorser of Zico’s brand of coconut water, Garnett is thought to have landed a deal that combines both cash payments and an equity stake in the company. According to Garnett, "I won’t call it magic, but it’s close. It’s light on the stomach since it has low acid and it allows me to play 34 minutes in a game with some of the young stars in the league without cramping. I don’t mind being the face of the coconut water boom. There [are] so many people who care more and more about what is going into their body and I can help grow that awareness."

Both in the EU and the US, coconut water has experience rapid growth in the past several years, moving smoothly from the shelves of natural food stores to large supermarket chains, with leading companies experiencing at least double-digit annual growth. Zico has grown 150 percent each year for the last five years. One of the remaining challenges to move this product from its current (albeit steadily growing) niche towards true mass-market appeal is taste. John Sicher, publisher of Beverage Digest, recognizes this is the key challenge for coconut water because "for many Americans, it’s very much an acquired taste." For this reason, various brands of coconut water, also in the EU, are trying to attract first-time customers (and repeat costumers) with flavours such as passion fruit, mango, and even chocolate. But no matter what the flavour, companies marketing coconut water can emphasize the fact that this product is made in nature, not in a lab, and for many consumers that is an important selling point.

Social media

Perhaps more than in any other product category, functional foods and nutraceuticals have the potential to benefit significantly from the effective use of social media. Early adopters of new products in this area are likely to be technology-savvy and highly networked, so word-of-mouth marketing strategies have the potential to rapidly grow awareness of products that experience an initial appeal. Companies without direct experience with social media are well-advised to solicit the help of knowledgable consultants who can help devise and execute an effective marketing stategy based on these increasingly popular communication tools. In this way, consumer feedback – a critical aspect of new product development – can also be obtained in a cost-effective manner.