Proactive consumers drive probiotics market

American consumers long have been proactive when it comes to health issues. The trend is driving functional foods—particularly probiotics. A recent survey by General Mills revealed that 9-out-of-10 women have become committed to their digestive health in the last five years, and 8-out-of-10 prefer to regulate their digestion through foods.

New product introductions support the finding; last year, 231 new probiotic-containing products were introduced, according to market research firm Datamonitor PLC, a big increase from the 34 introduced in 2005.

“As with any functional food, interest is driven by boomers,” said Ramin Ganeshram, chief food strategist at Iconoculture. “There’s an increased number of consumers who associate overall health with gut health. Increased interest in gluten-free foods also relates to that.” Ganeshram said probiotic drinks are the segment that has exploded.

“Americans are increasingly interested in maintaining or improving their health and wellness, and are looking for foods to help them in their quest,” said Michael Neuwirth, a spokesman for Dannon. “Consumer interest in probiotics has been spurred by the specific clinically proven benefits of products like Activia.”

Dannon in 2006 introduced DanActive, a yogurt product that has been clinically proven to help support the immune system when the body’s defenses are challenged. In 2007, the company introduced Activia, a yogurt product clinically proven to help slow intestinal transit. Dannon has continued to add line extensions, such as light versions of Activia and DanActive, Activia drinks and Activia Fiber.

Melissa Abbott, senior group analyst for The Hartman Group, credited Dannon with bringing the category mainstream. “Dannon did a fabulous job of educating the U.S. consumer about good bacteria,” she said. “Any mainstream grocer’s dairy cabinet is now flush with so many different kinds of yogurts, and consumers are moving away from cloyingly sweet products to tart yogurts with active cultures.” Other mainstream products also have made a mark on the category. General Mills introduced its own probiotic yogurt, Yoplait Yo-Plus, in August 2007. The company recently introduced a new blueberry acai flavor.

The category is expanding to nondairy-based drinks and drinks targeted to children. Lifeway Probugs is marketing an organic whole milk kefir drink for kids that is high in protein and calcium, contains inulin for optimum calcium absorption and has 10 live cultures to promote gut health. Nondairy drinks also are gaining momentum. Pepsi’s Naked brand has had a probiotic juice smoothie in two flavors on the market. Whole Foods and Costco carry the product. GoodBelly is another fruit-based shot that has been introduced in the last year.

Cultured probiotic drinks containing kombucha, a culture of microorganisms that has been used since ancient times, are showing signs of growth. “GT’s Kombucha was the first mass brand on the market, but we’re seeing more entries in this area,” Ganeshram said.

Manufacturers also have been adding probiotic benefits to cereals. Kellogg’s Kashi launched a probiotic digestive wellness cereal called Kashi Vive in 2006. CVS also stocks Kraft’s Live Active chewy probiotic granola bars on its shelves. “There’s a lot of probiotic enhancement in cereals and bars,” Ganeshram said. “Packaged foods are a good point of entry for many consumers.”

While category growth has slowed compared with recent years, during which category growth ranged from 5% to 11%, there still is upside for the category. Drug retailers have been slower to bring the products into their mix, and they may be missing an opportunity.

“Cooler space allocation is the first priority,” Neuwirth said. “Appropriate signage to adequately inform shoppers about the specific benefits of a product or a category of products is equally as important, since this continues to be an emerging segment and consumer education is absolutely imperative.”

Drug retailers have unique opportunities to merchandise the category near the pharmacy. Kim Harbinson, a spokesperson for General Mills, said that doctors often recommend probiotics to patients who are taking antibiotics, since antibiotics can be a cause of creating an imbalance of friendly and unfriendly bacteria in the gut. The pharmacy is a perfect adjacency for these products. “Single-serves are the way to go, since purchases can tend to be on the spot,” said Hartman’s Abbott.

Retailers might locate probiotic drinks in a stand-alone cooler near other functional foods, such as omega-3-enhanced cereals. Educational information to better inform consumers on the benefits of these products is essential for making these sections work.

Retailers who understand how to tap into the “era of consumer MD” can see strong growth in this and other functional food categories, said Ganeshram. “Consumers are increasingly looking to relieve their own symptoms,” she said. “Especially in this economy, they are looking to vitamins, supplements, functional foods and the advice of their pharmacist to fill in for a doctor visit in many cases.”