Functional foods: why?

Do you buy functional foods and drinks?  What makes a food or drink functional?  Neither Europe or the US presently has a legal definition of function food.  According to Wageningen University in The Netherlands, the term “functional foods” refers to a food that provides a health benefit as well as nutrients. 

Say what?  Isn’t that what nutrients do?  When you eat a piece of fruit, does it not provide a health benefit?

The University goes on to say: "The ingredients responsible for this benefit can be naturally present or may have been added during processing. The levels of nutrients in foods can be increased beyond their natural levels to create an enriched product. Fortified products contain nutrients or ingredients that were not present in the original food.”

Gosh, this is all so confusing.  If I read that right, I could whack a label on an Orange saying “may help to prevent viral infections when eaten as part of a healthy diet”, and I would have a functional food.    Herein lies the conundrum for functional foods.

I worked for several years in an R&D company that prided itself on having developed a functional food.  The company developed a form of raw sugar which had a lower GI than white sugar.  That’s hardly surprising since raw sugar is simply white refined white sugar with a touch of molasses left in.  Since molasses has a low glycemic index (GI), the more molasses a sugar has in it, logically the lower its GI will be.  Brown sugar is made by spraying molasses directly onto white sugar crystals and has the highest content of molasses, therefore is likely to have the lowest GI of any cane or beet sugar.

So how does leaving in more of a food’s natural nutrients make it a functional food?  Well, have a think about how the drug industry works. Companies search for natural substances which have a measurable effect on a disease or ailment, and then work out ways of synthesizing that substance.  This is because naturally occurring substances cannot be patented, because they already exist and are not unique.  The new synthetic substance is protected by a 20 year patent which gives the patent holder a 20 year monopoly over that drug.  Basic economics shows that a monopoly can charge what it likes and providing demand continues, profits are assured.  Global spending on drugs is around US$600 billion, so it’s a very profitable business to be in.  However the industry has become increasingly consolidated and new drugs are few and far between.  Thus entering the drug industry is extremely difficult.

Imagine if it was possible to create a unique patentable substance without having to synthesize anything.  Imagine if tampering with a natural food was enough to make it patentable.  Welcome to the curious world of functional foods!  You don’t believe me?  Global functional foods spending is tipped to be worth around US$167 representing around 5% of the global food market.

The correlation between the drug and functional food industries are unmistakeable:

Industry characteristics	Drug Industry	Functional Food Industry
Rely on patents for monopoly	Yes	Yes
Health claims	Yes	Yes
Global market value	US$600 billion	US$167 billion
Barriers to entry	High	Moderate
Current level of innovation	Low	High
Industry growth rate	Slow	Fast
Regulation	Stringent	Minimal
Time to market	3-10 years	1-3 years
Products	Synthetic	Natural

It’s not difficult to see the appeal of the functional food industry for entrepreneurs.  The monopolizing effects of 20 year patent protection has long been the key success factor in the drug industry, but the quick time to market and low regulatory environment also make the functional foods market very alluring.  So enticing in fact, that pharmaceutical companies are now competing for a piece of the action.

Examples of substances which can qualify a food as functional.

Are functional foods just another marketing ploy?  Why not simply eat the whole foods themselves? After all, they are the source of all the natural substances that are being extracted, removed or enhanced to make functional food claims.