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    Columns

    A Thriving Market for High-Quality Meal Replacement Beverages

    Manufacturers are developing great tasting, healthy products to replace missing or unbalanced meals.

    A Thriving Market for High-Quality Meal Replacement Beverages
    MRB sales exceed $3 billion in the U.S., reflecting double-digit growth over the past few years.
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    Greg Stephens & Kent Cipollo, PhD, Windrose Partners01.05.16
    The market for meal replacement beverages (MRB) has grown consistently since their commercial inception in the early 1970s. Though before this time there were modified infant formulas to address such health issues as PKU (phenylketonuria) the market really opened with the advent of easy-to-prepare “complete balanced nutrition” in a can.

    Used primarily in hospitals and nursing homes, these products replaced “blenderized” meals for those who could not eat solid foods due to health or disease issues. They also served as tube feeding products, which were less prone to clogging feeding tubes. Many patients relied on these “medical foods” as their sole source of nutrition for years. Since these early days—with brands like Ensure and Sustacal—MRB formulations have grown to become a multi-billion-dollar food category.

    In 1977 Thompson Medical launched Slim Fast, a commercial weight loss product, which led to the proliferation of “shakes” to help fight the growing U.S. obesity epidemic. More recently, meal replacement products have addressed the needs of on-the-go convenience. Powdered Carnation Instant Breakfast led the way for literally hundreds of beverages across all distribution channels. Today, an array of MRBs address a variety of needs, including sports nutrition and several niche markets.

    Market insight reports have shown MRB sales exceed $3 billion in the U.S., reflecting double-digit growth over the past few years. This does not include the “institutional” (hospital, nursing home, home care) use as medical foods. Most of the products are convenient, ready-to-drink, moderate- to low-calorie, fortified nutritional beverages.

    Today’s on-the-go beverages differentiate from the legacy brands by being more “healthy,” “natural” and offering improved organoleptic characteristics. These offerings are not easy to develop. Tapping into advances in food science, process and applications technologies, today’s manufacturers are developing great tasting, healthy products to conveniently replace missing or unbalanced meals.

    The MRB Consumer
    Roughly 17% of U.S. consumers reported using MRBs in the past year. The most frequent reasons for consuming MRBs include: the need for additional protein in the diet (34% of users), as a meal supplement/replacement (20%), as a good source of vitamins/minerals (16%) and as a weight-loss tool (15%).

    The MRB is a “lifestyle” category defined by attitudes and behaviors more than demographics. The category skews young, active and slightly female (55%). Barriers to use include taste, sugar content, added calories and no perceived need for the products. Protein content resonates best with all users, especially younger consumers, and weight-loss and caloric content appears more relevant to the 35-64 cohort.

    Windrose Partners Associate Kent Cipollo, PhD, contributes his technical insights in the following overview of how science and technology have fed growth in this category.

    Beverage Manufacturing Options
    The typical beverage production sequence has two streams: ingredients and packaging. The ingredient stream begins with mixing and blending. Ingredients can be dry, liquid concentrates or frozen concentrates. Processing refers to how the ingredient is handled before it is put into the package and after it is in the package. Each type of processing, packaging and storage has its own sensory, nutrition, cost and shelf-life implications. Packaging is critical in all aspects of the beverage development, not only from a processing and distribution standpoint but it also affects how consumers view the product, including taste, convenience, nutrition, value and image.

    The processes for manufacturing may be viewed as a continuum, with fresh on one end and aseptic on the other. Fresh might be defined as no preservation while aseptic kills all microbes. A fresh beverage may be put directly into a package without any preservation process; there is no effort to kill microbes. It likely will taste most like the original ingredients (e.g., fruit and/or vegetable) and likely retain the most nutrients; however, it likely has a relatively short shelf life.

    An aseptically processed beverage on the other hand is heated to kill microbes. Even the package is treated with a wash that kills microbes. The product is then pumped into the package in a sterile filling compartment. A final aseptic beverage does not need to be refrigerated/chilled and thus has a longer shelf life. Along the continuum between fresh and aseptic, there are many variations of processing technologies that address such variables as taste, cost, nutrition, packaging and shelf life.

    Insights on Product Formulation
    The product formulation presents numerous challenges to development. For instance, when formulating beverages containing citrus juice, the low pH limits the choice of protein. Caseinates, milk protein isolates, milk protein concentrates and most soy protein isolates will not function properly at pH 4.0 due to isoelectric point related precipitation. Therefore, whey protein isolate, whey protein concentrate and/or a combination of soy protein isolate may be utilized. From a sensory standpoint, whey protein and soy protein are astringent at pH 4.0. Thus, a formulation containing a high level of protein (>15 grams per serving) will likely be very astringent and result in a low overall consumer taste preference.  

    For a product providing complete nutrition, some fat will be required, even to solubilize the fat-soluble vitamins (A, D, E, K). The addition of fat will improve sensory aspects but will increase the caloric content. These are simply a few examples of the complexity of product development. Also, keep in mind there is a significant patent landscape for MRBs, so a thorough patent search should be conducted.

    Beverage Manufacturing Options
    From a manufacturing standpoint, there are five basic beverage processes: cold fill, hot fill, regular pasteurization, ESL pasteurization and aseptic. One significant difference between the processes is shelf life, which may range from a few days to more than a year. A newer processing technology uses high pressure to kill microbes rather than, or in addition to heat. This method should result in less sensory degradation.

    Shelf-Life Testing
    Every retailer and distributor wants long product shelf life. Good documentation is critical here. In addition to demonstrating nutrient stability over the intended shelf life, your plan should include protocol for confirming product homogeneity. Most often, three pilot batches made with different lots of key raw materials are used in a shelf life study. When less than three are used, documentation should explain your rational. Additionally, reliable analytical methods must be used to support the shelf life testing plan. Method validation typically includes the demonstration of accuracy, precision, linearity, specificity and ruggedness.

    Link to the Business Plan
    All of the above must be integrated into your business plan. From our experience, the most critical link is shelf life and sales volume. Retail sales rate is critical and the most difficult to quantify given the investment to develop and launch a product line. Sometimes test markets are used to support projections. Forecasting retail sales rates is a function of three elements: concept appeal, proposition execution (product, package, communication, pricing, availability, etc.) and marketing investment to drive awareness, trial and distribution. Each element has major impacts on volume.

    The market for meal replacement is growing, driven in part by the aging Baby Boomer population, on-the-go lifestyles and advances in technologies affording some great tasting, healthy products. Developing such products is not easy and can be a sizable investment. It is wise to have a knowledgeable team supporting launch of your new, best-selling brand.


    Gregory Stephens
    Windrose Partners

    Greg Stephens, RD, is president of Windrose Partners, a company serving clients in the the dietary supplement, functional food and natural product industries. Formerly vice president of strategic consulting with The Natural Marketing Institute (NMI) and Vice President of Sales and Marketing for Nurture, Inc (OatVantage), he has 25 years of specialized expertise in the nutritional and pharmaceutical industries. His prior experience includes a progressive series of senior management positions with Abbott Nutrition, including development of global nutrition strategies for disease-specific growth platforms and business development for Abbott’s medical foods portfolio. He can be reached at 267-432-2696; E-mail: gregstephens@windrosepartners.com.

    Kent Cipollo
    Windrose Partners

    Kent Cipollo, PhD, is an associate with Windrose Partners. He has more than 33 years of experience in nutritional product research and development. He led Solae’s application development programs for food and beverage and at Abbott Nutrition was responsible for medical food and infant nutrition product development. He holds a PhD in Biochemistry from the University of South Carolina and a BA from The College of Wooster.
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