Vitafoods Europe Discussion Forum Summary

This year's Discussion Forum provided a unique count-down of the biggest opportunities and the biggest challenges facing the functional food and food supplement industries as they look forward to the next decade. 

Chosen, rated and explained by a panel of multi-disciplinary experts, this provided a really exceptional opportunity not just to understand these issues better, but also to grasp the debate and controversy surrounding them.   

Below is an overview of the discussion at the Vitafoods Discussion Forum held in Vitafoods Europe on 12 Thursday 2011, in Geneva.

Product Concept

In the past the way for product development started with investments in research. The scientists got the resources and founding to undertake the research that they estimated was needed. However, when the results then came to marketing, it often appeared that the science was not usable to develop and substantiate products that corresponded with consumer wishes. Companies that can turn this process around and can undergo an elaborated market research, listening closely to the consumer are capable of developing product concepts with high market potential. The scientific research can then be targeted at this specific product and can be performed with the regulatory environment in mind. This enables companies to conduct studies that are usable both for the strengthening of the product’s scientific substantiation and the regulatory compliance procedures.

Innovation

Innovation is key for progress and product optimization. However, looking at innovation only from the product development point of view is not sufficient. Innovative ways for marketing and communicating to consumers are equally important. New marketing techniques and use of the internet and social media are essential for companies that want to pave the way and outrun their competitors

Segmentation

Product segmentation is a way to appeal to the specific demands of specific groups of consumers. Specific product formulations, targeted at specific groups of the population (children, pregnant women, smokers, etc) are better suited to convince the consumer of their usefulness for their specific situation. Personalised nutrition will take this a step further. It is more and more realized that the individual genetic makeup of the consumer determines his or her health status and it will become possible in future to target products to specific population groups, determined by specific genetic predispositions. Of course, how to reach these individual consumers becomes also more and more difficult.

Medicalisation

Medicalisation of food is also a trend that offers more and more opportunities because consumers are constantly searching for solutions to improve and maintain their health. Chronic diseases such as obesity, hypertension, cardiovascular disease, cancer, are threatening more than half of the population in Europe. Building products focused on this medicalisation, while keeping the right side of the medicinal registration process is a delicate process.  However, whether the regulators like it or not, consumers are driving this process and the European Food Safety Authority (EFSA) is encouraging it through almost a medicalisation of the claims evaluation process.

Partnership

In the past it was possible for companies to do every aspect of the product-marketing chain on their own. Today this becomes less and less appropriate and business can be maximised by partnerships.

Such partnerships can develop on many different levels, because each partner has their own specialisation and a combination of forces can lead to a boost in performance. Some examples:

- Partnerships between companies to share development and research costs
- Partnerships between companies and research centres to find mutually beneficial collaboration and obtain public funding
- Partnerships between companies and communication groups to address new forms of communication, social websites, etc
- Partnerships between companies and distributors to maximise presence of products in specific distribution channels
- Partnerships between companies and specialist knowledge centres to increase efficiency of product development and regulatory compliance procedures

This is the reason why we increasingly see joint ventures, mergers, exclusive license agreements, etc. Economy of scale makes research investments in the food sector bearable.

Another form of partnership is collaboration in trade federations to help make regulatory consequences realised and solved.  The broad cross-section of the ingredient sector is hugely underrepresented in food and food supplement trade bodies and seriously unengaged in helping shape its regulatory future.  This needs to be addressed.

Quality

While safety is a given and must be the same for all products on the market, differentiation in terms of quality is an opportunity for companies to demonstrate value, sustainability and build a closer relationship with the consumer. Investing on product/ingredient quality will provide a competitive advantage to companies when properly communicated to the consumer. Economy might currently face a big challenge but quality will be always one of the first priorities for the European consumer.

Regulatory

Regulatory is the biggest hurdle for innovation and market development. We live in an era where focus is so much on control and market approval and trust in food companies is missing.  Unfortunately we see an important discrepancy between the rules that are thought necessary and the resources that are required to make the system be functional. Unfortunately also, we see a trend towards regulatory requirements without an adequate appraisal of the genuine impact.
Some examples:

- The nutrition and Health Claims Regulation is now applied in such a way that it may lead to devastating consequences for the functional ingredient sector. No official full impact assessment has ever been conducted.

- The revision to the Novel Foods Regulation was not adopted and the improvements in it therefore have been put on hold for the time being.  It remains to be seen if this legislation will see the light of day. 

- The same is now happening with the EU labelling revision. The requirements for origin labeling as requested by the EP are so excessive that it will greatly reduce the flexibility needed for sourcing of ingredients and may considerably increase price.

In such circumstances, can regulatory elements be used as an opportunity? Yes, but primarily for companies that engage in the process.

Communication

Communication is the ultimate challenge as it is the direct link to the consumer. In a crowded market characterised by tight competition, communicating how your product stands out is key.