Meal Replacements: Making a Mark in the Functional Foods Space

More consumers are turning to meal replacement products these days, whether its for convenience, weight loss or simply to get more nutrients. No matter the reason, these shoppers are helping to grow the billion-dollar market for meal replacements.

Last year, an industry publication reported that meal replacement sales totaled USD $3.2 billion in 2011a 15 percent increase from 2010. The popularity of high-protein dieting is expected to rise, leading to the meal replacement markets continued ascent.

Meal replacement food and drink offerings mainly consist of ready-to-drink (RTD) products, energy bars and powders. In a June 2011 study regarding the 2010 to 2011 meal replacement industry, market research firm Mintel reported sales of RTD products bounced back after slower growth the year before. Elsewhere, energy bar sales continued to thrive, and although powders saw smaller growth that year, sales appear to be more consistent.

So whos influencing meal replacement sales the most? Mintel said older shoppers and dieters tend to be the types of consumers looking for these products. Market research and analysis company Euromonitor International reported the meal replacement market accounted for more than 60 percent of its parent weight-management grouping. Euromonitor also said the United States is the largest market for meal replacement weight-loss products, as value sales comprised 37 percent of the global total in 2011.

While we are seeing increasing popularity of meal replacements in the United States, FDA has never actually defined this term. However, in a 2011 Natural Products INSIDER article, Brenda Rudan, group leader at International Food Network (IFN), said there is a loose definition: Even though there is no specific legislation regulating meal replacement products in the United States, these products are generally considered in the category of low-calorie, nutrient-dense foods or beverages for weight loss or weight maintenance." In addition, the story explained meal replacements cannot be marketed as dietary supplements or medical foods.

Looking ahead, market research organization IBISWorld said the meal replacement product manufacturing industry will experience substantial revenue growth." According to IBISWorld industry analyst Mary Gotaas, From 2011 to 2016, industry revenue is expected to increase by an average of 4.1 percent per year to $2.7 billion." The company predicted the increase will be due to the growth in per capita disposable income, giving consumers the opportunity to devote more funds to discretionary products; less free time and a need for more convenient foods; and a desire for weight loss and nutritional improvement.

We expect the coming years to bring exciting changes to the meal replacement industry, especially in regard to natural ingredients. In its study, Mintel predicted an increased focus on natural within the market. And a 2012 Natural Products INSIDER piece reported on Danish research that found dietary fiber from brown algae, or alginates, could help with weight loss. According to the article, developments such as these are highly promising, not least because they tap into the growing demand for natural products and ingredients."

These and other trends show an increased focus on healthy living across the nation. As this demand continues to grow, we must work together as an industry to ensure we provide safe, effective products for consumers.

John Shaw, is executive director and CEO of the Natural Products Association (NPA).