Sink or swim? Industry flags differentiation opportunities in saturated active nutrition market

21 Jan 2021 --- As the active nutrition market matures, major corporations are starting to take notice of this space. Meanwhile, agile start-ups offer creative new concepts to this cut-throat arena. 

NutritionInsight speaks with industry experts, who share that although the market is increasingly saturated, functional foods, immunity and personalization all provide crucial means of differentiation.

“While all nutrition categories begin with the product and positioning, active nutrition provides brands more ways to win. Brands can position based on image, endorsement, ingredients, channel, support services and more,” says Mark Rohde, global business manager, DuPont Nutrition & Biosciences.

He continues that because there are more ways to win, more start-ups can enter the space and find their niche.

Ramon Mommersteeg, market segment manager of performance and active nutrition at FrieslandCampina Ingredients, adds that today’s active nutrition segment is characterized by creativity and increasing segmentation.

“Insights are playing a bigger role than ever, and new niches and ideas pop up frequently, leading many potential entrepreneurs to think ‘I can make those!’ Sadly, the failure rate is quite high as it’s a very competitive space, but there are some great success stories – like Huel and Y Foods, for instance.”

When it comes to new companies, more and more are starting with fresh ideas on food tech, agri-tech and sustainable packaging, flags Núria Jiménez, marketing specialist of nutraceutical ingredients at Lubrizol Life Science, Health.

For example, 3D printing technology used by NOURISH3D allows seven different active ingredients to be combined into customized nutrition stacks.Agile start-ups and established multinationals both have a role to play in active nutrition. 

Multinationals take notice
However, as active nutrition becomes increasingly mainstream, the type of company succeeding in this space is evolving. 

Jaume Reguant, healthcare director at Bioiberica, details that specialized sports nutrition businesses previously led this space. These companies offer a range of supplements for muscle health targeted toward athletes and committed gym-goers. 

“Now, we’re seeing more multinational food companies and household name brands capitalizing on an already health-conscious population by offering convenient functional foods with a wide range of product positionings. These include ‘high in protein’ or ‘providing a source of energy’ and are aimed at everyday consumers who might do some kind of physical activity a few times a week,” he illustrates. 

The rise of “food+”
Mommersteeg also emphasizes that it’s not just small businesses meeting the growing demand for active nutrition. 

Established performance and sports nutrition companies are also moving into this space with changes to their formats and packaging, making their products more approachable for people who aren’t elite or dedicated athletes. 

“Additionally, some regular food brands are becoming ‘food+’ as they seek to obtain a slice of this exciting market.”

Notably, Babybel recently unveiled its cheese snacks in Plus+ Probiotic and Plus+ Vitamins formats. Meanwhile, M&M’s is now targeting the sports nutrition market with chocolate-flavored protein bars.

Mommersteeg acknowledges that there is less growth for very plain and simple protein products today, as the market has grown and diversified so much.

“Without doubt, protein is critical – a cornerstone of active nutrition, but the future is about ‘protein plus’ – offering additional health benefits above and beyond muscle and mobility.”

In this space, FrieslandCampina Ingredients’ Biotis range provides gut and brain support alongside dairy protein. “Consumers increasingly understand that no aspect of health is insular, and the only way to maximize it is by paying attention to the whole body and mind.”Active consumers are eager for on-the-go functional foods with added benefits. 

A holistic approach
A prominent trend predicted to drive future opportunities is the growing demand for holistic health solutions. 

Reguant explains that although there are common themes between active and sports nutrition, the real difference is that ‘active’ consumers aren’t looking for enhanced performance – they are concerned with making healthy choices to improve their overall quality of life.

“Here, consumers are seeking to address multiple health areas at once – such as fitness, mobility, digestion and cognitive health. This presents an exciting opportunity for manufacturers who should consider the development of products that support healthy living, combining complementary health positionings in a single product.”

Functional foods step up
There has been a “meteoric” rise in convenient on-the-go products, according to Reguant. This trend predominantly originated in the active nutrition space and has gradually filtered into other categories.

As such, consumers not only expect the added nutritional benefit – they want tasty, appealing products too.

“As a result of high consumer expectations and a deeper focus on NPD in active nutrition, products like fortified bars, juices and gummies are becoming increasingly common in the nutrition space,” continues Reguant.

He observes that innovative formats continue to enter the market every year. In essence, growth in the active nutrition space is greatly dependent on being responsive to ever-changing consumer needs and lifestyles. Meanwhile, in other areas of nutrition, factors like scientific evidence or regulatory approval are critical.

A saturated market?
In recent years, the increase in interest in protein as a functional ingredient created a saturated market for protein products, observes Jiménez.

“Nonetheless, the diversity of the active nutrition market means that there is always a new trend or hot topic, creating new less-saturated opportunities.”

Rohde details that there are a few areas where it is difficult to differentiate products. Protein powders, energy drinks and hydration/sports drinks are each spaces in which there appears to be more brand loyalty.

“However, changing consumer habits create opportunities. The push toward more plant-based protein is one of the most interesting long-term opportunities,” he states.

Immune health also poses great potential in the category. 

Emphasis on immunity
Reguant adds that there has been a dramatic rise in consumers using supplements to manage their overall health and well-being since the COVID-19 pandemic broke out last spring. 

“The focus of this growth has been supplements related to immune health, such as vitamin D and zinc. However, consumers are also seeking products positioned around mobility to support them as they explore new ways to keep healthy, such as running around their local area,” he explains.

Julie Impérato, marketing manager at Nexira, notes that immune health was the top claim on supplements in 2020, often featured on products targeting general well-being and immunity, vitality and the respiratory tract.

“While preparing against the seasonal changes, consumers are looking for preventive products to stay healthy and boost their immune defenses,” she explains.Shakes and hot protein beverages are popular on cold winter days, while lighter, refreshing formats are in high demand in summer. 

Seasonal variation
Changes in the seasons can have an impact on what type of active nutrition products are in demand. Jiménez points to studies finding that physical activity dips to its lowest in the winter and is at the highest in the spring. 

“This makes caffeine supplementation in summer and iron or zinc supplementation in winter more important for the immune system to function properly,” she says.

Meanwhile, Mommersteeg observes that lighter and more refreshing formats like clear protein waters are more popular in warmer months, where people are often exercising outdoors or in heat.

Meanwhile, shakes and hot protein beverages see higher demand in the winter, when feelings of warmth (literal or metaphorical) are desirable.

Know thy customer
Finally, personalization is an increasingly common consideration within active nutrition. Impérato explains that personalization can also be a key way for companies to differentiate their offerings. 

One way to do this is by having a specific target in terms of consumers, such as children or athletes. Additionally, companies can consider a specific target in terms of when the product is used. Impérato gives the example of Nexira’s Cognivia, which targets cognitive performance for e-gamers. 

Rhode emphasizes the heightened importance of catering to end-consumers within active nutrition as there are more specific consumer needs that products are trying to address. 

“To meet these discrete needs, active nutrition brands are required to be intimately familiar with their consumer base to survive,” he concludes.

By Katherine Durrell