Americans possess a growing awareness of the link between nutrition and health, as government committees become increasingly attentive to nutraceutical product claims and potential regulations.
The ageing consumer population seeks dietary supplements to balance work and active lifestyles, choosing foods that aid in health maintenance. The strategic market consulting group Frost & Sullivan expects the market for nutraceuticals, foods and ingredients that claim health and medicinal benefits, to expand dramatically.
New analysis by Frost & Sullivan , Strategic Analysis of the US Nutraceuticals Market, indicates the total market for functional ingredients, functional foods, functional beverages, dietary supplements, and foods for special dietary use is approximately $50bn (Euro54.15bn) at present.
"Realising the potential of this industry will greatly depend on government regulations, which currently do not offer the necessary framework to ensure the future success of the nutraceuticals market," says Frost & Sullivan Analyst Carlos Ayala.
Nutraceuticals and functional foods currently do not have official definitions from the government. Large pharmaceutical and food companies see the promise of these products, but are reluctant to commit significant resources until there are regulatory assurances that their investments will be rewarded.
Mergers have become key strategies for market participants. While some firms continue to use mergers to gain dominance in a particular segment, others hope to acquire complementary technologies. For small firms, alliances enable access to established distribution channels and necessary research resources.
"It is the middle and lower-tier companies that will benefit most from strategic partnering," says Frost & Sullivan Analyst Aninditta Savitry. "Rapid growth rates in key demographics, including health-conscious consumers, should provide the small and mid-sized acquisitions of niche food companies with more long-term profitability than many of the recent mega-mergers."