The Future of Probiotics in Functional Foods and Beverages

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The Future of Probiotics in
Functional Foods and Beverages
A analysis of product innovation and market potential in the US, Europe, and
Asia
Reference Code: CM00234-031
Publication Date: February 2014

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About the author
Valerie Skala Walker has over 20 years' experience analyzing the consumer packaged goods industry. After
beginning her career in brand management at Procter & Gamble, she worked in marketing research at
Information Resources for 16 years. At IRI, Valerie contributed to the development of best practices for
evaluating new product launches and new techniques for analyzing and applying consumer and shopper
insights. She has been a frequent and popular speaker at CPG industry conferences on new product trends
and success factors. She graduated from St Olaf College, Northfield, Minnesota, with a degree in political
science, and earned her MBA at the Fuqua School of Business, Duke University, Durham, North Carolina.
Disclaimer
Copyright © 2014 Datamonitor
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purpose of the information or advice contained herein. The Publisher wishes to make it clear that any views
or opinions expressed in this report by individual authors or contributors are their personal views and
opinions and do not necessarily reflect the views/opinions of the Publisher.

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Table of contents
About the author 2
Disclaimer 2
Executive summary Error!
Bookmark not defined.
Chapter 1 Introduction Error!
Overview Error!
About this report Error!
Definition of probiotics Error!
Market size and growth projections Error!
Scientific backing Error!
From raw science to consumer applications Error!
Commercialization has somewhat outpaced the science Error!
Regulatory restrictions remain a significant hurdle Error!
Factors stimulating demand for probiotic foods Error!
Functional products offer key benefits versus supplements Error!
Still much room for consumer education Error!

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Chapter 2 The developing science of probiotics Error!
Introduction Error!
Five categories of technical advancement Error!
Probiotics currently being studied and/or used commercially Error!
Recent advances in clinical research Error!
Recent advances in manufacturing technology Error!
The trend towards evidence-based marketing Error!
Consumer education Error!
Featuring the quantity and variety of probiotic content Error!
Scientific documentation of health claims Error!
Combining probiotics with other nutrients for a more complete solution Error!
Chapter 3 The current market for probiotic foods Error!
Introduction Error!
Market structure and opportunities by food category Error!
Fermented dairy foods and beverages are largest segment Error!
Fermented non-dairy foods and beverages remain popular in Asia, not the US Error!

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Probiotic-fortified foods and beverages are a large, relatively new opportunity Error!
Marketing to fundamental consumer needs Error!
Highest potential health issues for functional foods Error!
Marketing to specific consumer lifestages Error!
Digestive and immune health benefits are relevant across all lifestages Error!
Emerging opportunities in sports nutrition, weight management, heart health Error!
Chapter 4 The US market Error!
Introduction Error!
Supplements are biggest challenge to functional foods Error!
Key events in US research and regulation Error!
Recent product innovation Error!
Non-dairy beverages Error!
Frozen dairy treats 9
High protein products for active adults, especially fitness-oriented men Error!
Confectionary Error!
Recommendations for US marketers Error!
Advancing the markets for digestive and immune health Error!

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Branching out to address new areas of health Error!
Chapter 5 The European market Error!
Introduction Error!
Key events in European research and regulation Error!
Top health issues in Europe Error!
Recent product innovations Error!
Recommendations for European marketers Error!
Chapter 6 The Asian market Error!
Introduction Error!
Market development and regulatory environment by country Error!
Japan market and regulatory highlights Error!
China market and regulatory highlights 10
India market and regulatory highlights Error!
Key health issues in Asia Error!
Recent product innovations Error!
Probiotic yogurt and yogurt drinks Error!

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Probiotic drinks for digestive health plus weight management Error!
Probiotic drinks for digestive health plus energy Error!
Probiotic digestive and immune health benefits come to tea and candy Error!
Products for infants through young children Error!
Recommendations for Asian marketers Error!
Chapter 7 Conclusions Error!
Appendix Error!
Report scope Error!
Research methodology Error!
Glossary/abbreviations Error!
Bibliography/references Error!

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Recent advances in clinical research
Probiotics, such as those commonly found in most yogurts, are widely believed to be helpful in maintaining a
healthy balance of good and bad bacteria in the gut, thereby ensuring healthy digestive and immune system
function. But a growing body of evidence suggests that specific strains of bacteria can actually be useful in
treating and/or preventing specific digestive and immune system dysfunctions, as outlined in the chart below.
As the clinical efficacy of specific bacteria strains is confirmed through multiple research studies, more
targeted consumer products will likely be developed to compete with existing "general purpose" products like
Activia and Yakult.
Figure 1: More specific digestive and immune benefits are being discovered
Digestive and immune health
benefits/indications
Examples of probiotics with at least some scientific
backing (not all-inclusive)
General maintenance of digestive health B. longum BB536, L. casei Shirota,
Howaru Dophilus (L. acidophilus NCFM),
Howaru Bifido, L. plantarum 299V, B. infantis 35624, B.
lactis BB-12
Regulate the GI tract to prevent digestive
discomforts such as diarrhea, constipation, gas
L. casei Shirota, B. lactis DN 173-010
Diarrhea due to pathogenic bacteria growth
caused by specific infection (e.g., rotavirus) or
antibiotic use
Sa. boulardii, Lactobacillus GG,
B. longum BB536, B. coagulans BC30,
LacidofIL (combination of L. rhamnosus Rosell-11 plus L.
helveticus Rosell-52)
Gastritis caused by H. pylori bacteria L. Johnsonii La1
Irritable bowel syndrome, inflammatory bowel
disease, colitis, Crohn’s disease
VSL#3 (combination of 4 strains of Lactobacilli, 3 strains of
Bifidobacteria, and 1 strain of Streptococcus),
B. coagulans BC30, Lacidofil
Lactose intolerance B. coagulans BC30, L. bulgaricus, Lacidofil,
Str. Thermophilus,
Infant colic L. reuteri Protectis
General maintenance of immune system health B. coagulans, Howaru Rhamnosus, Howaru Bifido (B. lactis
HN019), L. Casei DN-114 001, combination
Common infections: colds, flu, upper
respiratory tract health
Howaru Protect (B. lactis Bi-07 plus
L. acidophilus NCFM), B. lactis BI-04,
B. longum BB536, L. casei Shirota,
ProbioKid (L. helveticus Rosell-52, B. infantis Rosell-33,
and B. bifidum Rosell-71)
Seasonal allergies B. longum BB536
Rheumatoid arthritis pain B. coagulans BC30
Source: Datamonitor DATAMONITOR
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Figure 2: Kevita provides a less tart alternative to yogurt and kombucha
Product: KeVita sparkling probiotic drink
Market launch: USA, April 2011 (6 flavors) and January 2013 (2 new flavors)
Target: Adults
Health benefit: Immune and digestive health
Probiotics: 4 billion CFUs at time of manufacturer of a proprietary culture
handcrafted by KeVita: B. coagulans GBI-30 6086,
L. paracasei, L. plantarum, and L. rhamnosus.
Inspirational attributes:
• Neither a fermented milk like yogurt nor a fermented black tea like kombucha,
KeVita is fermented with coconut water, tea, or reverse osmosis water. This
makes KeVita light in flavor, refreshing and delicious, neither tart nor
vinegary.
• Certified organic, non-dairy, non-GMO, gluten free, and vegan, with just 10
calories per 8 oz. serving
• Website features a variety of articles from credible sources (e.g., doctors and
respected publications like the New York Times) that describe how probiotics
support the immune system and promote digestive health
Source: Kevita DATAMONITOR
Frozen dairy treats
Figure 3: Lifeway kefir bars provide probiotics in an on-the-go treat form
Product: Lifeway frozen kefir bars
Market launch: USA, April 2013
Target: Adults (based on flavors)
Health benefit: Power-packed with 10 live and active kefir cultures to
rev up immunity and digestion
Probiotics: Blend of 10 probiotics (no quantity specified)
Inspirational attributes:
• A nutrition-packed superfood transformed into a 60-calorie dessert
• Four tart and tangy flavors: coconut, pear, green tea raspberry and
vanilla
• The most “probiotic” of at least eight brands of frozen yogurt / kefir bars
launched in 2012-2013, most taking off the Greek yogurt craze in the US
Source: Lifeway DATAMONITOR
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improving the intestinal environment". Danone offers Bio (known elsewhere as Activia) yogurt and drinks with
digestive health benefits and Densia with a bone health claim based on calcium and vitamin D content.
China market and regulatory highlights
The Chinese Food and Drug Administration (CFDA) defines "health food" as foods, beverages, and dietary
supplements with specific health functions (i.e. making structure/function claims but not used for the
treatment of diseases). All health foods must be registered and approved by the CFDA.
Following the global trend toward stricter requirements for substantiating health benefit claims, the CFDA has
become more aggressive in challenging misleading claims and enforcing regulations, particularly since the
reorganization of the agency in early 2013.
Currently, 27 health claims are allowed for functional foods in general, including enhancing immune systems,
assisting blood pressure reduction, assisting blood lipids reduction, assisting blood sugar reduction, assisting
weight control, regulating gastrointestinal flora, facilitating digestion (regularity), and facilitating bowel
movement. Both animal and human studies are necessary to substantiate all of those claims except
"immunity", where only animal studies are necessary. Of note, health claims in China are approved for each
product as a whole, so the use of an existing ingredient in a new product form requires new studies.
However, the cost of conducting studies is lower in China than in many developed countries and the
requirements successful claims are clearly defined. For key ingredients, evidence of previous use and
approval in other countries is generally required.
At present, just 25 bacterial strains are allowed to be labeled "probiotic", and just three general health claims
are authorized on these various probiotics: enhancing immune health, regulating gastrointestinal flora, and
facilitating digestion.
Yakult, which entered China in 2005, can market its drink with the claim that it helps with "immuno-regulation
and improving intestinal flora". Danone Bio (Activia) was launched in 2009 and now holds about a third of the
"digestive comfort" yogurt segment. In China, the yogurt market is dominated by local players China Mengniu
Dairy, Hangzhou Wahaha, and Bright Food.
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