"As the environment in which our food and beverage ecosystem operates in evolves, consumer preferences are moving. Products are no longer just products as consumers are demanding more from their food.  Added functionality and personalisation are trending and products are being tailored to meet every single condition. Not just in terms of nutrition and associated health benefits, but also convenience and how our food is packaged.

A functional food or beverage is considered to be an enhanced or enriched food that has the ability to provide, or at least facilitate, health benefits beyond the provision of essential nutrients (e.g., vitamins and minerals). The attraction and desire for these types of products are expedited if they offer a solution. If a product holds the desired functionality that was not formerly present, there will be a substantial preference to purchase specifically if they facilitate positive health and a healthier lifestyle.

Probiotic functions are a great example of a functional aspect of food that has gained popularity. As there has been a spotlight on gut health and its overall effect on health (mentally and physically), products such as kombucha, coconut kefir, and probiotic yoghurts, have gained immense popularity given their gut health-promoting components.  Additionally, consumers aren’t afraid to pay a premium for these products as they value their health above price.

As there is an increasing focus on health, consumers are starting to challenge and scrutinize everything they put in their mouths. Food companies are re-thinking their strategy to position themselves as nutritional businesses, providing scientifically enhanced functional foods. Looking to companies such as Nestle who earlier in the year indicated they want to sell their confectionary arm and realign their strategy with healthy options as consumers are shifting away from sugary indulgent foods.

Functional, high-health foods are therefore permeating our markets as there is a strong desire to transition from curative healthcare to preventative and consumers actively seek out options to optimise the function of their bodies. This is opening doors for pharmaceutical companies to leverage on a new market, as the gap between nutrition and medicine is closed.

With a natural and intrinsic health benefit, companies can convey a compelling message.  With social media connecting channels faster than ever, there is a lot of buzz around natural, and as close to nature as possible, products.  If enough buzz is created around a specific quality of a product and people are able to draw their own conclusions about the benefits of a naturally functional ingredient or product, then a health claim isn’t necessary.

With a pivot to focus on health, major players in the food and beverage industry are realigning their strategy and refocusing on consumer need. An example is General Mills, a US packaged foods giant, which has been investing in various functional food companies. Recently they invested US$6.5m in probiotic startup Farmhouse Culture and earlier in the year one investing in an organic granola company that uses functional mushroom powder to enhance its wellness bars with benefits like increased energy, vitality and immunity.

With a food ecosystem saturated with options, if a consumer isn’t satisfied with a product they will just find another product that fulfils their requests.

Coca-Cola is shifting their long-term play and creating products in line with health and nutrition appeal.  Not only releasing a range of naturally flavoured waters, they have released Coca-Cola Plus, a beverage to promote weight-loss. They recognise following the path of sugar-filled beverages is no longer viable and need to rethink their products and how they fit into a competitive market heading down the path of healthy alternatives and functionality.

The entire industry has seen a major shift towards healthy habits and a holistic view of health.  Increased education and awareness in health have prompted a clear shift towards food with high nutrition and function.

Today’s fast-paced lifestyle means that consumers are seeking solutions that enable them to minimise the time doing the things they like least, concurrently increasing those things that give them pleasure. Convenient functional options ensure this is achievable. Products such as Soylent are targeting this growth area. Soylent has been developed in the United States as a nutritionally “perfect” drink that contains everything the body needs to thrive.  With a tagline of “providing maximum nutrition, with minimal effort” consumers can use this drink as a meal replacement, with zero prep and zero thought.

In an environment with abundant options, to remain relevant, innovation in food capability needs to be highly considered in an evolving ecosystem."