Functional Food in European Union and Bosnia

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What is functional food, what are its benefits, potential advantages for further development of EU competitiveness? What are the potentials and risks of R&D in this field? What is the current situation in Bosnia and Herzegovina regarding this matter?

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Functional Food in European Union and Bosnia

  1. 2. the Evaluation of the wellness wheel
  2. 3. What are main functions of food??? <ul><li>Nutritional </li></ul><ul><li>Sensory/ hedonistic role </li></ul>
  3. 4. … but also a new “Psychological” role <ul><li>Functional food is generally “considered as food that contains biologically active components which offer the potential of enhanced health or reduced risk of disease,” http://www.eufic.org/article/en/page/BARCHIVE/expid/basics-functional-foods/ </li></ul><ul><li>New economic opportunities for the food industry and the future competitiveness of the EU economy </li></ul><ul><li>Despite existing risks that exist in terms of research and innovation in this industry, customers are willing to pain higher $$$$ for these sorts of products    Growing market and Great potential for the future. </li></ul>
  4. 5. <ul><li>As opposed to food supplements, functional food is considered to be part of the normal diet. </li></ul><ul><li>In 2008, there were 385 functional food products that were identified at the European market as those that contained 503 different “functional” ingredients. </li></ul><ul><li>Only until recently, functional food was still not defined by a particular legislation in the EU, and all member states were dealing with this relatively new matter on their national level. </li></ul><ul><li>The European Science and Technology Observatory (ESTO) says about Functional Food : </li></ul><ul><li>“ ( i) that the base product was a food, (ii) that it contained or was fortified with an ingredient, a micronutrient or a naturally occurring chemical with a beneficial effect on health, well-being or disease prevention and (iii) that this effect went </li></ul><ul><li>beyond normal and adequate nutritional effects, (iv) that these effects had been “demonstrated„ or were at least claimed and communicated to the consumers and (v) that these effects can be expected to materialize when the food is consumed in normal amounts.” </li></ul>
  5. 6. Legislation on “functional food” in EU <ul><li>in July 2003, the European Commission proposed a harmonized regulation COM/2003/0424 on nutrition and health claims made on foods, including dietary supplements. </li></ul><ul><li>In December 2006, the Council and Parliament of Europe adopted this regulation. </li></ul><ul><li>This is to ensure truthfulness of companies’ claims regarding functional food, hence protecting the customers but also helping the manufacturers, by offering a universal set of rules that ensure fair competition and protect innovation in the food industry. </li></ul>
  6. 7. <ul><li>The EU set up a European Commission Concerted Action on Functional Food to agree on and/or develop scientific methods that are to be used for the “development of food products that can have a beneficial effect on an identified physiological function in the body. </li></ul><ul><li>PASSCLAIM was established as a new EU Commission Concerted Action program, supposed to deal with validation, scientific substantiation of claims and communication to the consumer. </li></ul><ul><li>It is a way to regulate companies’ claims regarding the effects of the products they are selling as “functional food” which should increase the consumers’ confidence </li></ul>
  7. 8. <ul><li>The European Food Safety Authority (EFSA) is an independent European agency funded by the EU budget that operates separately </li></ul><ul><li>involved in implementing the harmonized regulation COM/2003/0424 on nutrition and health claims made on foods and for keeping the public informed on food safety. </li></ul><ul><li>F unctional FoodNet was funded under the EU 6 th Framework Programme. </li></ul><ul><li>It began its activities in January 2006 in more than 20 European countries and concluded in spring of 2008, focusing mainly on SMEs and larger companies producing functional foods and food ingredients. 190 companies took part. </li></ul><ul><li>Kinds of projects available: very large Integrated Projects (IPs), Networks of Excellence (NoEs), Specific Support Actions (SSAs) (FFNet is an SSA) and in Specific Targeted Research Projects (STREPs). </li></ul>
  8. 9. FACTS & FIGURES /EU study, Aug ‘08 <ul><li>there are at least 168 EU companies active in the field of functional foods. </li></ul><ul><li>the global market fall into the range of EUR 30-60 billion . </li></ul><ul><li>estimates for the EU market range from EUR 6-20 billion . </li></ul><ul><li>That was billion, not million....¸(a lot of $$$$for those healthy youghurts...) </li></ul>
  9. 10. Functional food market: And Fats DAIRY CEREALS, SNACK FOOD BEVERAGES
  10. 11. Further categorization of Fu. Food: <ul><li>Besides this classification according to the food group that it belongs to, functional foods can also be classified by the disease they are expected to prevent (e.g. diabetes, osteoporosis, colon cancer), its physiological effects (e.g. immunology, digestibility, anti-tumor activity), the category of its specific biologically active ingredients (e.g. minerals, antioxidants, lipids, probiotics), its physico-chemical and organoleptic properties (e.g. color, solubility, texture), or the processes that are used in its production (e.g. chromatography, encapsulation, freezing </li></ul>
  11. 12. Who makes this food? Where in EU? <ul><li>H alf of these companies have their headquarters in Germany , almost one sixth in the UK, one tenth in Spain and about 5 percent in the Netherlands . There are also 26 US companies with functional food products on the European market, 11Japanese companies and around another 30 companies from outside the EU. </li></ul><ul><li>High cost of marketing and R&D </li></ul><ul><li>The majority of companies present on this market are already well-known and established large international names. </li></ul>
  12. 13. WHO buys this sort of food? <ul><li>Women and younger respondents, as well as respondents with higher incomes generally were also more likely to buy functional food than others. </li></ul><ul><li>The main reasons for purchasing these products was “to stay healthy,” followed by “to do myself good” and “good taste ” . </li></ul>
  13. 14. Why do others not buy this food? <ul><li>The reasons for not buying functional food included “general concerns about novel food, bad taste, preference for organic food, focus on the present rather than on the future, absence of illness, fear of side effects, aversion towards artificial additives, distrust of effectiveness and price. ” </li></ul><ul><li>Governments are seen as having technical expertise to only be political institutions, and food retailers to have commercial interests only. </li></ul><ul><li>H ealth professionals, doctors, and university scientists, as well as consumer and patient organizations are usually considered “credible,” whereas industry scientists, the media, environmental groups and the European Commission are seen as having specific non-customer, but rather profit-oriented motivations on their agendas. </li></ul>
  14. 15. <ul><li>Consumers need to be educated and understand functional food health benefits . </li></ul><ul><li>Despite greater initial R&D and ingredient costs, price premiums may however reach 30 percent or higher , depending on the product </li></ul><ul><li>Manufacturers must be able to target a niche, communicating a specific health benefit linked to a common ailment or incorporating multiple desirable qualities into a single product. </li></ul>
  15. 16. <ul><li>Nestlé declared it was “moving from an agrifood business to an R&D-driven nutrition, health and wellness company .” At least 12 other top food and beverage companies have signaled similar intentions, including Danone, Unilever, General Mills, Kellogg, PepsiCo, Coca-Cola, Yakult, and Kraft. </li></ul><ul><li>Nestlé forecasts that by 2017, global sales of nutrition for “specific need states” could reach $100 billion , and is heavily investing in its R&D component </li></ul>Therefore, BIG companies are CHANGING strategies.
  16. 17. R&D in what direction?? <ul><li>On the EU level, approximately 10-20 percent of the overall research budget in the field of food and nutrition is allocated to functional food. 106 research institutes or company departments were identified that – in 2005 – did research related to functional foods in the EU . </li></ul><ul><li>The main target groups and targeted health threats for the current research are: the ageing population and related health problems, children in relation to their calcium intakes; targeted health threats like cancer, and the case of increased lycopene intake in playing a preventive role, as well as obesity, cardiovascular diseases and immunology issues </li></ul>
  17. 18. Threats??? <ul><li>No information on the cost-effectiveness of functional food. </li></ul><ul><li>At what cost could expected health benefits come, or how much is to be invested in order to really make products that help prevent diseases that take big chunks of the health care budgets?? </li></ul><ul><li>N ot much can be concluded “on the individual or social desirability of consuming and promoting functional food within the EU from a consumer protection and public health point of view ” . </li></ul><ul><li>There is always a risk that the market might not materialize, or moreover as in Nestlé’s case. </li></ul>
  18. 19. BiH………we might be healthy, but how are we following the health trends? <ul><li>Food Safety Agency of Bosnia and Herzegovina is an independent administrative organization, established by a decision of the Council of Ministers of 08.03.2005. </li></ul><ul><li>Created for ensuring food safety and food for animals, conduct of scientific, professional and technical jobs from the Law on Food Safety, application of international conventions and international agreements in the areas of food safety and feed safety binding. </li></ul><ul><li>There are also funds for standardization and improvement of food quality in BiH. </li></ul><ul><li>€ 985,292 provided by the European Union through the IPA pre-accession EU funds for 2007. </li></ul><ul><li>“ Support the implementation of the BiH Law on Food&quot; is the newest initiative towards ensuring the implementation of legislation on food safety in BiH through the strengthening of human resources to ensure a high level of food safety and increase the competitiveness of agricultural products from BiH and the EU on Bosnian market, presented on October 29, 2009. </li></ul><ul><li>How much do we know about functional food products ?? They will only get better and tastier!!...Will we have money to pay for it in BH ? Some will. Some won’t . </li></ul>
  19. 20. We eat it, we drink it, how much do we know about it? BiH/Region <ul><li>Croatian study showed that the familiarity with functional food depends on the general health orientation of the consumers, and the general health orientation varies systematically as a function of age, gender and education level . </li></ul>
  20. 21. Companies and customers have a continuous interest for this sort of products!! Why?? <ul><li>Sales in Western Europe grew by 10.2% a year between 2004 and 2007, whereas sales of packaged food grew by 6.3% a year over that period. </li></ul><ul><li>It will only get better for companies that make products that for example: control elevated blood pressure, reduce body fat, and improve the glucose metabolism. </li></ul>
  21. 22. S trong customer demand in the future might also include products that are: <ul><li>helping people lose weight, improve digestion, support women’s health or enhance immunity. </li></ul><ul><li>Antioxidants remain among main focuses of research alongside dietary fibers, but also skin health is cited as potential growth market for functional foods products </li></ul><ul><li>Busy lifestyle and difficulty of being able to cover necessary daily intake of essential nutritients also serves as a factor that might help the growth of functional foods market in the future </li></ul>
  22. 23. THEY know WE will pay $$ for health. <ul><li>Customers expect these products to “taste good and work, but also to be convenient, to show a reasonable price-benefit ratio, to have an attractive design and a practical packaging.” </li></ul>
  23. 24. <ul><li>Thanks for your attention. </li></ul>Conclusion/ questions to think about... It will be interesting to see where the whole industry goes, and what sorts of products will research and innovation result in. It will also be interesting to observe the macro movements of this market, will the skeptics win or will the scientists be praised not only by the manufacturers but by the large masses who will be satisfied by results. Foreign policy is important, social policy is important…..but is there anything that is as priceless as HEALTH???? ..and finally WHO will benefit the MOST from this fact? Producers or Buyers? Think about it….but stay healthy in the meantime.

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