Ingredient Trends - US - December 2004

SUMMARY

INTRODUCTION AND ABBREVIATIONS

• Introduction
• Other relevant reports
• Definition
• Abbreviations & Terms
• Abbreviations
• Terms

EXECUTIVE SUMMARY

• Low calorie sweeteners show explosive growth
• Functional ingredients break out
• Vitamins and minerals and herbs slow down
• Global competition heats up
• Marketing is beginning to target consumers
• Consumers are proactive about their ingredient choices
• General vs. specific health reasons for reading nutrition labels
• Trends in low-calorie sweetener use

MARKET DRIVERS

• Incidence of obesity
• Figure 1: Incidence of overweight and obese Americans aged 18 and older,1994-2002
• Figure 2: Prevalence of obesity among U.S. adults, by key demographics,1991, 1995 and 2000
• Low carb: More than a fad
• Figure 3: Attitudes toward diets and nutrition, February 2004
• Figure 4: Incidence of being overweight, 6-19 year olds, 1976-2000
• Figure 5: Buying of low-cal/diet products, selected categories, byhouseholds with obesity and all other households, 2003
• General vs. specific health concerns
• Ingredient breakthroughs

MARKET SIZE & TRENDS

• Figure 6: Total North American wholesale sales of selected foodingredients, 1998 and 2003

MARKET SEGMENTATION

• Figure 7: Numbers of new products, segmented by selected types ofingredients*, 2002-2004

LOW-CALORIE SWEETENERS

• Launches of low-calorie sweeteners by type
• Figure 8: Launches of products with low-calorie sweeteners, by sweetenertype, 1999-2004
• Launches of low-calorie sweeteners by category
• Figure 9: Launches of products with low-calorie sweeteners, by category,1999-2004
• Launches of each low-calorie sweetener by category
• Sucralose
• Figure 10: Launches of products containing sucralose, by category,1999-2004
• Splenda brand
• Figure 11: Launches of products containing Splenda, by category,1999-2004
• Sorbitol
• Figure 12: Launches of products containing sorbitol, by category,1999-2004
• Maltitol
• Figure 13: Launches of products containing maltitol, by category,1999-2004
• Acesulfame potassium (ace-K)
• Figure 14: Launches of products containing acesulfame potassium (ace-K),by category, 1999-2004
• Aspartame
• Figure 15: Launches of products containing aspartame, by category,1999-2004
• Lactitol
• Figure 16: Launches of products containing lactitol, by category,1999-2004
• Erythritol
• Figure 17: Launches of products containing erythritol, by category,1999-2004
• Isomalt
• Figure 18: Launches of products containing isomalt, by category,1999-2004
• Xylitol
• Figure 19: Launches of products containing xylitol, by category,1999-2004
• Mannitol
• Figure 20: Launches of products containing mannitol, by category,1999-2004
• Stevia
• Figure 21: Launches of products containing stevia, by category,1999-2004
• Frequency of low-calorie sweetener launches in key categories
• Confectionery
• Figure 22: Launches of products with low-calorie sweeteners in theconfectionery category, 1999-2004
• Snacks
• Figure 23: Launches of products with low-calorie sweeteners in thesnacks category, 1999-2004
• Beverages
• Figure 24: Launches of products with low-calorie sweeteners in thebeverage category, 1999-2004
• Desserts & Ice Cream
• Figure 25: Launches of products with low-calorie sweeteners in thedesserts & ice cream category, 1999-2004

VITAMINS AND MINERALS

• Methodology
• Figure 26: Launches of products fortified with vitamins & minerals,by ingredient type, 2000-2004
• Figure 27: Launches of products fortified with vitamins & minerals,by category, 2000-2004
• Launches of each vitamin and mineral
• Vitamin C
• Figure 28: Launches of products fortified with vitamin C, by category,2000-2004
• Calcium
• Figure 29: Launches of products fortified with calcium, by category,2000-2004
• Vitamin A
• Figure 30: Launches of products fortified with vitamin A, by category,2000-2004
• B vitamins
• Figure 31: Launches of products fortified with B vitamins, by category,2000-2004
• Vitamin E
• Figure 32: Launches of products fortified with vitamin E, by category,2000-2004
• Iron
• Figure 33: Launches of products fortified with iron, by category,2001-2004
• Folic Acid
• Figure 34: Launches of products fortified with folic acid, by category,2000-2004
• Frequency of vitamin and mineral launches in each category
• Beverages
  • Figure 35: Launches of products with vitamin and mineral fortificationin the beverage category, 2000-2004

OTHER FUNCTIONAL INGREDIENTS

• Figure 36: Launches of products fortified with other functionalingredients, by ingredient type, 1999-2004
• Figure 37: Launches of products fortified with other functionalingredients, by category, 1999-2004
• Launches of the other functional ingredients
• Fiber
• Figure 38: Launches of products with fiber, by category, 1999-2004
• Omega 3
• Figure 39: Launches of products with omega 3, by category, 1999-2004
• Flaxseed
• Figure 40: Launches of products with flaxseed, by category, 1999-2004
• Pre- or Probiotics
• Figure 41: Launches of products with pre- or probiotics, by category,1999-2004

HERBAL INGREDIENTS

• Figure 42: Launches of products with herbal ingredients, by herbal type,1999-2004
• Figure 43: Launches of products with herbal ingredients, by category,1999-2004

SUPPLY STRUCTURE

FOREIGN TRADE

• Figure 44: Imports of selected ingredients, in the U.S., 2001-2004
• Figure 45: origin of selected Imported ingredients in the U.S., 2003

COMPANIES AND BRANDS

• Figure 46: Leading manufacturer sales of companies active in theingredients market, 2002 and 2004
• Cargill, Incorporated
• BASF
• Archer Daniels Midland
• DSM N.V. (Roche Vitamins and Fine Chemicals)
• Merck KGaA
• Ajinomoto Co
• Associated British Foods (SPI Polyols)
• McNeil Consumer and Specialty Pharmaceuticals (Johnson & Johnson)
• Eisai
• Danisco A/S
• Roquette Freres
• NutraSweet Co.
• Nutrinova GmbH (Celanese AG)
• Indena SPA

ADVERTISING & PROMOTION

• Cargill
• BASF Health & Nutrition
• Archer Daniels Midland (ADM)
• DSM N.V.
• Ajinomoto
• McNeil: Splenda (Sucralose)
• Nutrinova GmbH

THE CONSUMER

• Introduction
• Influence of ingredients on buying decisions
• Figure 47: Label components influencing buying decision, October 2003and November 2004
• Figure 48: Label components influencing buying decision, by gender,October 2003 and November 2004
• Figure 49: Label components influencing buying decision by age, October2003 and November 2004
• Figure 50: Label components influencing buying decision, by income,October 2003 and November 2004
• Figure 51: Label components influencing buying decision, by race,October 2003 and November 2004
• Figure 52: Label components influencing buying decision, by maritalstatus, October 2003 and November 2004
• Figure 53: Label components influencing buying decision, by the presenceof children, November 2004
• General vs. specific health concerns as motivator
• Figure 54: Main reason for reading nutrition labels, October 2003 andNovember 2004
• Figure 55: Main reason for reading nutrition labels, by age, October2003 and November 2004
• Base: 1,000 adults aged 18+ in 2003 and 2004
• Figure 56: Main reason for reading nutrition labels, by householdincome, October 2003 and November 2004
• Figure 57: Main reason for reading nutrition labels by the presence ofchildren, November 2004
• Trends in low-calorie sweetener use
• Figure 58: Changes in low-calorie sweetener purchase behavior, October2003 and November 2004
• Figure 59: Changes in low-calorie sweetener purchase behavior, by age,October 2003 and November 2004
• Figure 60: Changes in low-calorie sweetener purchase behavior, byhousehold income, October 2003 and November 2004
• Figure 61: Changes in low-calorie sweetener purchase behavior, bymarital status, November 2004
• General attitudes toward vitamin and minerals
• Figure 62: General attitudes toward vitamins and minerals, November 2004
• Figure 63: General attitudes toward vitamins and minerals, by gender,November 2004
• Figure 64: General attitudes toward vitamins and minerals, by age,November 2004
• Figure 65: General attitudes toward vitamins and minerals, by race,November 2004
• Figure 66: General attitudes toward vitamins and minerals, by thepresence of children and marital status, November 2004
• Summary
• Influence of ingredients on buying decisions
• General vs. specific health concerns as motivator
• Trends in low-calorie sweetener use
• General attitudes toward vitamins and minerals

FUTURE & FORECAST

FUTURE TRENDS

• Health-consciousness has become a mindset
• Ingredients are here to stay
• Carbohydrates fight back
• Childhood obesity concerns open opportunities
• Qualified health claims in the future

MARKET FORECAST

• Figure 67: Forecast of North American wholesale sales of selected foodingredients, 1998, 2003, and 2008

APPENDIX: TRADE ASSOCIATIONS

APPENDIX: NEW PRODUCT BRIEFS

LOW-CALORIE SWEETENERS

• Wells Dairy: Blue Bunny Sweet Freedom
• Coca-Cola: Diet Sprite
• HealthySweet Inc.: Baking Sweetener Mix

VITAMINS AND MINERALS

• Sara Lee Bakery: Earth Grains Extra Fiber Bread
• Albertsons: Splash Blended Juice Beverage
• Dean Foods: Land O Lakes 80 N Sunny Low-Fat Milk and Fruit Juice Drink

OTHER FUNCTIONAL INGREDIENTS

• Momos Veggie Kitchen: MoRainbow Veggie Fish
• Trader Joes: Spicy Soy & Flaxseed Tortilla Chips
• Lifeway Foods: Lowfat Kefir Cultured Milk

HERBAL INGREDIENTS

• Coca-Cola: Full Throttle Energy Drink
• Anheuser Busch: B-to-the-E

APPENDIX: RESEARCH METHODOLOGY

• Consumer Research
• Sampling & Weighting
• Presentation & Definition
• Further Analysis
• Trade Research
• Informal trade research
• Formal trade research
• Desk & Internet Research
• Sources
• Definitions
• Forecasts

APPENDIX: WHAT IS MINTEL?

• Mintel Reports
• Global New Products Database
• Comperemediaｮ
• Mintel Services
• POS+
• Mintel Consultancy

TABLE OF CONTENTS

As consumers have begun thinking of food as a vehicle for achieving specific health goals, the emphasis of food ingredients has changed. Ingredients that fortify (herbals, vitamins and minerals) and ingredients that reduce (low calorie sweeteners, low-carbohydrate polyols) have become important parts of the product development process, crucial to creating foods that are healthful and popular. Researching the levels and patterns of ingredient use in new products is a unique way to understand where the food industry is heading.

Unlike the standard Mintel report, which focuses on the end-consumer market, this report deals with an intermediate market level--where ingredients are sold to food manufacturers in an industrial wholesale process. Consumers affect intermediate markets only to the extent that their demands drive the number of products in which featured ingredients appear. The incidence of usage of many ingredients is examined in this report, via Mintels Global New Products Database. A host of other factors that impact the markets for these ingredients are also analyzed, such as innovation within the ingredients market, regulation, and global competition.

The report covers trends in the usage of specific ingredients within the following broad categories:

• low-calorie sweeteners
• vitamin and mineral enrichment
• other functional ingredients
• herbal ingredients