Cereal Beverage market exploding

Posted - July 20, 2009

CEREAL BEVERAGE MARKET EXPLODING

By Kelly Roesler

The global functional foods market was valued at $164 billion in 2007 and is expected to grow to $240 billion by 2012, as manufacturers expand production of functional foods that deliver “health solutions” to support specific bodily functions (Nutraingredients.com, February 16, 2009).
Global economic pressures and increasing consumer expectations for improve overall health, convenience and environmental responsibility, are forces driving the organic functional beverage market.

“In spite of the economic recession the market for functional certified organic cereal drinks is still up,” says Alessandro Bartoli, VP of Italian beverages manufacturer Abafoods S.R.L. “Last year overall sales grew around 25 percent and this year we expect around 15 percent, which is still a very good number in the food sector”.Abafoods produces only certified organic functional beverages of soy, rice, millet, oats, kamut and other cereals under private label and for its own brand Isolabio . Outside Italy, France is the company’s second market followed by Spain and other EU countries. “In Spain cereal functional beverages were practically unknown until recently”, says Miguel AngelMontesinos of the Italian subsidiary La Finestra sul Cielo Espana. “With the growing number of food intolerances and allergies related to dairy, milk sales have dropped dramatically, to the point that the main conventional soy beverage players are now the dairy companies”. Today, soy, rice and oats drinks are found at retail shelves of major supermarkets.

WHO BUYS CEREAL BEVERAGES?

Organic functional cereal beverages appeal mainly to two major user groups: younger adults and higher-income consumers, especially professional women on-the-go. They also have potential as a breakfast food milk alternative for children and teenagers, who often leave home to school with no food or after a bowl of sugar-rich cereals. Recent attention to the prevalence of obesity in children, has prompted companies to develop lines to encourage this consumer group to choose beverages that promote a healthier lifestyle.

However, being organic and packed in a known brand is not enough to win new customers, especially younger consumers, says Montesinos. The acceptability of a new product is judged first by sight and smell. The color, consistency, smell, taste and aftertaste are all very important. “A beverage drink offered in a caramel or dark color as a replacement for cow’s milk is likely to be rejected before it has ever been tasted”.

Keeping all of these factors in mind, La Finestra sul Cielo Spain in association with Isolabio is launching its new BeVida this summer, to hit the “back to school” season. BeVida is an organic brown rice and kamut drink with chocolate flavour. It is calcium fortified with organic seaweed. “The product will be launched in Spain and Portugal, but the label will be presented in seven languages, to allow rapid penetration to other countries”, saysMontesinos, who is also introducing La Finestra in Latin America with high success.

KEEPING CONSUMERS ENGAGED IS KEY

Bartoli warns that to remain competitive, it is important to keep the consumer engaged to avoid saturation. AbaFoods and its clients are always innovating and paying attention to consumer perception. “We noticed that for committed consumers, being organic is not enough; they want to know if the ingredients come from local sources. The slow food and 100 mile movements now have an impact in the purchasing decision. “We noticed that in France, organic consumers prefer to buy soy and other cereal drinks that are made in France or a closer country. With this in mind, Abafoods plans to concentrate production of its cereal drinks with ingredients sourced in Italy, the first producer of organic cereals. We will import only those ingredients that do not grow locally, such as basmati rice and quinoa”. AbaFoods plans to introduce two new flavours this fall under its own brand: white corn and barley, both grown at neighbouring farms. This white corn is in the slow food list, is nutritious and grows in theVenetto region, where we want to support more organic farming conversion”.

With a growing aging population, awareness of preventive healthcare and the search for foods that may keep consumers away from high bills at the doctor, functional Foods and beverages expect being less vulnerable to the economic downturn., and cereal beverages as long as they are produced with the highest nutrient integrity and quality are expected to stay among the hottest food products in the next years.