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    Features

    Sweet Opportunities in Functional Confectionery

    Even during tough economic times consumers tend to make room for little indulgences, especially if they're healthy.

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    Rebecca Wright04.01.09
    Euromonitor International, Chicago, IL, estimates that global retail sales of confectionery grew 6% in 2008 to reach $158 billion, which represents a moderate slowdown on the 9% growth recorded the previous year. Chocolate confectionery was by far the largest category by retail value, accounting for 55% of the global total, followed by sugar confectionery and gum, which accounted for 31% and 14%, respectively.

    The confectionery market in general hasn't made significant gains for the past several years, mostly because it is a well-established, mature market. But that may soon change, as companies use health to drive innovation and growth in this sector.

    According to U.K.-based market research firm Business Insights, "healthy confectionery would have been an oxymoron just a few years ago, traditionally representing indulgence rather than health. However, as the industry and consumers have become increasingly health-conscious, the development of healthy confectionery has become an imperative NPD (new product development) strategy to avoid a steady and inevitable decline in sales."

    Categorizing it as a subsector of the functional food and beverage market, Euromonitor said sales of fortified/functional confectionery products topped nearly $930 million in the U.S. alone in 2007, representing 39% growth during the previous five-year period. Gum and chocolate made the largest gains between 2002 and 2007, growing 89% and 87%, respectively.

    Examining some of today's prominent trends, Marcia Mogelonsky, senior research analyst, Mintel, Chicago, IL, said high growth areas-with new launches and high consumer interest-primarily focus on chocolate, especially dark chocolate, where "consumers look to the product because it is 'rich in antioxidants.'"

    While there has been some interest in functional mints (i.e., Ice Breakers launched Burn and Energy varieties last year), Ms. Mogelonsky said they have not been given the attention they would need to really stand out in the marketplace.

    As for gum, she said it is almost old hat as a delivery system, having been associated with smoking cessation, breath freshening, tooth whitening, calcium fortification, etc. That being the case, she believes in gum's potential as a carrier for healthy ingredients.

    Finally, Ms. Mogelonsky highlighted gummy confectionery products as carriers for vitamins, which also continue to be popular with consumers. Although, Ms. Mogelonsky cautioned, "Some parents may see a disadvantage and a disconnect between health and gummy-type candy."

    According to Curtis Vreeland, Packaged Facts' senior analyst for the confectionery market, gums and hard candies are excellent vehicles for carrying functional benefits. "Creative manufacturers have recognized candy's value as an excellent delivery system for functional ingredients," he said. "They have responded by developing candy with added minerals (zinc or calcium), vitamins (especially vitamin C) and omega 3s. Sports-formulated jelly beans marketed by Jelly Belly (Sport Beans) are a great example of adaptive product development."

    Commenting on this market in view of the current economic downturn, Mr. Vreeland said, "Chocolate sales have been sustained even during these recessionary times because dark chocolate offers two benefits: affordable indulgence and a healthy treat. Americans' love affair with dark chocolate has exploded over the last few years, driven by antioxidant and low sugar health claims."

    Offering a similar perspective, Debra Miller, director of nutrition, The Hershey Company, Hershey, PA, said she considers candy and confections to be semi-discretionary. In other words, they are somewhat recession proof. "People need small indulgences when they cannot afford large indulgences," she said.

    In a recent report, Mr. Vreeland discussed the state of the chocolate market specifically with Tom Hernquist, Hershey senior vice president and global growth officer, who said that "[Hershey's] research validating the significant health benefits of cocoa and nut snacks, combined with our proven ability to develop and commercialize innovative new products, provides an immense capability to meet the growing consumer demand for healthier products."

    Mr. Hernquist also made a bold prediction for dark chocolate. Speaking at an industry meeting in 2007, he said, cocoa and dark chocolate would drive the chocolate category for the next hundred years, replacing milk chocolate, which was the driver for the last hundred years.


    Cashing in on the Chocolate Craze



    As a frontrunner in the functional confectionery business, chocolate, particularly dark chocolate, has an advantage that companies have been able to capitalize on in recent years, most notably its inherent health properties.

    In fact, Euromonitor believes chocolate confectionery sales managed to maintain positive growth in 2008 as a result of the positive perception that dark chocolate has among health-conscious consumers, particularly in developed regions such as North America and Western Europe.

    "Research shows that premium chocolate producers are focusing on the creation of a 'super-premium' dark chocolate category. They are doing this by introducing dark chocolate extensions featuring fruit, cocoa and marzipan fillings as well as chocolate products sourced according to cocoa bean origins," Euromonitor noted in its fortified/functional confectionery market analysis. "Another key trend in 2008 was the introduction of sugar-free dark chocolate premium lines-still a rarity in the market-by mainstream manufacturers. One of the latest examples was Hershey Co's introduction of Sugar Free Special Dark Chocolate in April 2008 in the U.S. market. This innovation adds the flavor and antioxidant properties of dark chocolate to the low-fat and oral friendly benefits of sugar-free products."

    What about taking chocolate beyond its antioxidant health benefits? In order to take the pulse of the consuming public, Barry Callebaut, Zurich, Switzerland, conducted a study in January 2008, which showed that one in four consumers in Western Europe and the U.S. want chocolate with extra physical or emotional health benefits. "Chocolate with the scientifically proven ability to improve the sense of emotional well-being ranks highest on chocoholics' wish lists," said Hans Vriens, chief innovation officer. "Around 27% of them long for chocolate with mood-enhancing qualities and a quarter of all chocolate lovers want chocolate that can help them to relax after a stressful day at work."

    Chocolate with proven health-enhancing properties is a popular concept, according to Mr. Vriens, with 21% of consumers interested in chocolate that is scientifically proven to keep their heart healthy. Tooth-friendly chocolate also ranked high on Barry Callebaut's survey, receiving an interest score of 19%, while 17% of consumers claimed to want chocolate that provides extra benefits to strengthen the immune system.

    Packaged Facts' Mr. Vreeland has noticed some of the same trends. "Consumers are looking beyond a product's basic sugar and carb content to evaluate whether ingredients address their specific health needs," he said, adding, "All while never losing their demand for good-tasting products-they want their food to be both delicious and nutritious."

    To meet rising demand, Mr. Vreeland pointed out that all of the major confectioners have established health and nutrition centers to capitalize on the health and wellness trend. Mars established the Health and Nutrition Division; Hershey has its Nutrition & Natural Product Sciences Division; and Nestl formed the Nestl Research Center. "These centers are taking the lead in developing new products that blend objective nutritional science with subjective chocolaty indulgence," he said.

    At Barry Callebaut, researchers have been busy creating chocolate products that harness and preserve the natural health-enhancing components of the cocoa bean (e.g., the cocoa flavanols). "During conventional processing of cocoa beans into chocolate, a significant amount of the healthy substances inherent to the cocoa bean are lost," said Mr. Vriens. "Barry Callebaut applies 'controlled fermentation' to retain the active health components inherent in the cocoa bean. As one of the results, Barry Callebaut has developed ACTICOA chocolate, which has a guaranteed amount of polyphenols needed for an antioxidant effect."

    Mr. Vriens insists there is evidence to suggest that fortification in a substance's natural matrix is more effective than if it is applied outside its natural matrix. He used the example of vitamin C to make his point. "Vitamin C is more effective in oranges than in pills. So, antioxidants that are naturally found in cocoa are more effective in chocolate than as a component added to other foodstuffs," he said. "This is why Barry Callebaut aims at preserving and enhancing the naturally healthy components of the cocoa bean."

    In addition, Barry Callebaut has developed "re-balanced chocolate," which has an improved nutritional profile (less sugar, less fat). Apart from ACTICOA and rebalanced chocolate, Barry Callebaut has also launched tooth-friendly chocolate, which Mr. Vriens says has been endorsed by dentists as safe for teeth, carrying the "tooth-friendly international" quality seal. Its latest development revolves around probiotic chocolate, which "[helps] maintain a healthy intestinal balance and support a strong immune system."

    Hershey's Ms. Miller also believes inherently functional is better than fortified confections. "Although not illegal to put nutrients into chocolate, I don't think adding nutrients to chocolate is in line with the spirit of what was intended for fortification," she said.

    In terms of where "functional" chocolate is headed, Ms. Miller said she hasn't seen a major player emerge to take ownership of the category. "There is no clear player that has taken the big dive," she said. "I think a lot of companies are waiting for someone to get a better idea where to go in this market."


    Sweet, Nutritious Delivery



    Looking at confectionery as a delivery system, Jeff Wuagneux, president and CEO, RFI Ingredients, Blauvelt, NY, said it is probably the most exciting thing to happen to nutraceuticals in quite some time. "The energy category, for example, which has been dominated by pills or beverages, is seeing a recent surge in development of confectionery products," he said. "This trend is likely to continue as confectionery provides a convenient (i.e., easy to carry and use) and most often pleasant (i.e., sweet, pleasant flavor and aroma) means of supplementation."

    Further, Mr. Wuagneux believes lifestyle products geared toward mood support, cognitive health, sedation, antioxidant supplementation and diet are also likely to make significant gains using confectionery as a delivery system, along with the immune support and cold relief categories.

    Mr. Wuagneux considers nutritional bars the first primary delivery system for confectionery products, "partly because you could formulate with higher quantity of 'active' ingredients while still making the product taste good." However, he says emerging technologies with hard candy, soft chews, gummies and even chewing gums are now allowing the formulation of functional products in relatively small serving sizes.

    Primrose Candy, Chicago, IL, is fully entrenched in the soft chew market, assisting companies with the R&D of such products, through the manufacturing and packaging stages. As a result, Mark Puch, president, is uniquely qualified to discuss some of the most recent trends in this market. "There is definitely a strong market for using candy base as a delivery system for healthy ingredients. Viactiv, for instance, is a $100 million brand. And with many other smaller players getting into this business, the category is probably approaching sales of a half-billion dollars," he said.

    Primrose is positioned toward dietary supplements, as opposed to using popular marketing trends to make candy seem more nutritional, (i.e., through the use of natural and organic ingredients). As a result, it must comply with GMP regulations for dietary supplements.

    During the past several years, Mr. Puch has experimented with a variety of ingredients that lend themselves well to the soft chew delivery system. Some of the more notable include protein and creatine. "Using the soft chew to deliver protein and creatine actually improves the absorption of these ingredients," he explained. "Lately, however, we've been working on energy chews containing ingredients such as glucuronolactone, taurine, guarana, B vitamins and caffeine."

    John Heron, senior vice president, Sales & Marketing, Nutravail Technologies, Inc., Chantilly, VA, also sees a lot of potential for the soft chew category. "We expect to see a large uptick in our company's soft chew business. Nutravail has the ability to get truly great candy flavor in a soft chew that can deliver specific functional ingredients. Effectively you get Starburst pleasure with excellent nutritional benefits," he said. "We are producing chews for different marketers that taste so good consumers look at the functional ingredients as a bonus or a reason to justify eating candy."

    In the last year, Nutravail has developed chews with several different active ingredients, including omega 3s, superfruits, fiber and others designed to provide extra energy and other health benefits. "As people realize they can get functional benefits in a truly delicious form, we believe you will see more and more items available," Mr. Heron said. "This is a permanent trend [that parallels what] is going on in food and beverages."

    The popularity of certain delivery systems for health ingredients will always depend on their ability to deliver active ingredients in forms more enjoyable to ingest than pills, according to Debra Bryant, director, Business Development and Technical Services, BENEO-Palatinit, Morris Plains, NJ, who discussed some of today's advancements. "Delivery systems that resemble snacks have great popularity, such as chewable tablets, which are standard forms for breath freshening; hard candy, for delivering essential vitamins; lozenges, for cough suppressant ingredients; even chocolate bars that combine the feeling of indulgence that many consumers derive from the taste of chocolate with ingredients for reducing heart and body health concerns and improving one's mood."

    Given advances in delivery technologies and a marked increase in health awareness, consumers these days are more willing to embrace functional confections. Young-Soo Song, food applications associate project coordinator, Roquette America, Inc., Geneva, IL, said, "With an increasing awareness of the role foods and their ingredients play in health and obesity prevention, today's consumers are becoming savvier than ever. Great tasting, healthier confectionery products with nutritional benefits will drive future trends."

    Ms. Song went on to discuss the role fiber might play in functional confectionery in the future. "Consumers have learned that reducing fat, sugar and calories while increasing nutrients such as fiber and protein have become vital in maintaining a healthy lifestyle through better, balanced nutrition," she said. "Fiber-rich healthy snacks can offer a way to help maintain adequate fiber intake for people on-the-go. Traditional confectionery, an indulgent treat, tends to deliver non-nutritive calories with taste considered to be the primary consumer driver. Fiber has not normally been considered an option for indulgent sweets, but with recent developments in soluble fiber technology this is no longer the case."

    For example, Roquette's soluble fiber, Nutriose, is a resistant dextrin that provides substantial amounts of soluble fiber while maintaining the full taste of traditional confectionery. "This ingredient can often be a substitute for all of the corn syrup and a portion of the sucrose in many types of confections, allowing the reduction of sugars and increase of fiber fortification, without sacrificing the same great taste of the traditional counterparts," she said. "The outstanding stability of resistant dextrins facilitates production of candies that may require high temperatures such as hard candies and/or acid stability such as fruit flavored gummies, with no loss of fiber."

    In terms of formulation and utility, Ms. Song said the wide variety of flavors, appealing colors and shapes of gummies makes this product one of the most popular delivery systems for consumers, especially for children. "From a production standpoint, gummies have a relatively low processing temperature that helps to minimize loss from use of labile ingredients like vitamins," she said. "Relatively high levels of fiber can also be incorporated into gummies along with other functional ingredients. Chewy candy, chocolate and pressed tablets are also fairly popular carriers for functional ingredients such as fiber, antioxidants and vitamins."


    Gum Moves Beyond Oral Care



    BENEO-Palatinit's Ms. Bryant believes chewing gum has become one of the most sought after mechanisms for delivering nutrients. "Chewing gum is one of the most popular delivery systems for healthy ingredients because active substances can be released over time, thereby extending their effect," she explained. "In addition, chewing gum is most suitable for systemic delivery; bioavailability is improved as active health ingredients reach the gastrointestinal tract already dissolved or suspended in saliva."

    Euromonitor claims the introduction of new functional properties has moved the gum category away from it traditional "oral care" foundation. One key example in 2008 was Wrigley's introduction of Orbit Balance in the German market, featuring papaya and aloe vera as core ingredients.

    "It's targeted at health-conscious consumers willing to pay a premium for a gum combining exotic flavors with health properties," Euromonitor said. "Orbit Balance is being marketed as an opportunity for consumers to soothe their 'psyche and body' as it balances the fruitiness and long-lasting flavor of papaya with the equilibrium benefits associated with aloe vera."

    Another important trend spotted by Euromonitor within gum was the introduction of lines featuring energy-boosting properties in developed markets. One of the most prominent examples in 2008 was Coca-Cola Bevande Italia Srl's introduction of Burn Gum in the Italian market.

    "The product is being marketed as a 'flaming' sugar-free gum with caffeine and targets younger consumers seeking energy-boosting properties in a chewing gum," the market research firm said. "Burn Gum is a brand extension of Coca-Cola's Burn soft drink, a brand competing directly with Red Bull."


    Resolving the Identity Crisis



    The confectionery market is no stranger to criticism, particularly as it relates to the global epidemic of obesity. For years it has been lambasted for producing products with nothing but empty calories. Faced with these challenges, the industry continues to work hard to change its image. But it hasn't been easy.

    With health as the major driver of new growth opportunities, many companies have encountered a relative identity crisis when it comes to offering "healthy" or "functional" confectionery products.

    Mintel's Ms. Mogelonsky explained some of the contradictions. "Consumers readily embraced the chocolate-for-health concept, and manufacturers were quick to rush good-for-you-chocolate to market," she said. "But this was not as true for fortified/functional candy products for kids because the message is too confusing. Medicinal lollypops and gummy vitamins are excellent ideas, but there are issues surrounding the justification of 'candy is bad, candy is good' proposition."

    Heather Biehl, senior scientist, H.I.T.S., Wild Flavors, Erlanger, KY, offered a similar perspective. "Healthy candy can be confusing to some consumers, especially if new or unknown ingredients have been added. Above all, a functional confection must be sugar-free for a consumer to [consider] it 'healthy.'"

    In terms of research, she continued, "A company needs to understand the value of consumer awareness. If an ingredient doesn't have widespread appreciation, it can be tricky to convince wary consumers of its functional properties. It is important to use simple health statements on the packaging."

    Ms. Biehl went on to say that companies should also be aware of FDA's "Jelly Bean Rule," which prohibits health claims on unhealthy or low nutrient foods.

    Specifically, it requires that any product using the term "healthy" have at least a small percentage of a nutrient. In other words, foods, beverages and candy that are low in fat, cholesterol and sodium cannot claim to be "healthy" unless they contain at least 10% of vitamin A, vitamin C, calcium, protein, fiber or iron. This avoids the possibility of jelly beans, for example, which contain no fat or sodium, being able to claim they are "healthy" on their own.

    In terms of talking about health benefits, Mr. Vriens from Barry Callebaut believes clinical and scientific research is required to support any claims. "Barry Callebaut works with the best scientists and has an extensive portfolio of clinical studies that validate unique selling propositions for its cocoa and chocolate products," he said.

    In fact, during the past year, Barry Callebaut has fielded close to 30 clinical studies to substantiate scientific evidence supporting the relationship between chocolate products and improved memory and concentration, better heart health and better skin condition. "The clinical insights gained have generated revolutionary products," Mr. Vriens said.

    In order to make progress on the "healthy" confectionery front, Hershey's Ms. Miller said, "We're going to need a bigger bridge between confectionery companies and the good-for-you options. You have to get there with a level of credibility. I think the work being done on cocoa and chocolate is helping bridge that gap."

    Regarding claims, she added, "We're nowhere near crossing the bridge into areas like blood pressure or cholesterol lowering. For now, people in the middle will be more interested in wellness claims."

    For the future, Ms. Miller thinks this area will thrive under the health and wellness umbrella, making it easier for companies to move into the category. "I definitely think this category has legs, especially because chocolate and cocoa research is really starting to get more of an evidence base," she said. "Armed with that knowledge we can start branching out with some messaging. We may not have cured obesity yet, but we've certainly raised awareness on the importance of healthy behaviors."
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