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s the recession took hold in 2008-2010, the retail food and drink industrys growth trajectory slowed down considerably, with few exceptions. Remarkably, this was true even in sectors that once seemed impenetrable. As a result, industry observers have grown accustomed to viewing graphs with the now-familiar dip in growth rates during this time period. Meanwhile, sales forecastsin terms of where markets will go in the next five yearsare all over the map. Simply put, it is very hard to know how categories will come out of the recession, or if they will ever reach pre-recession benchmarks. The ultimate cause for this uncertainty centers on overall market factors. Thanks to temporary and longer-term shifts in consumer behavior due to the recession, as well as rising food and fuel costs, an aging population and other factors, markets may perform very differently in the coming years. They may, in fact, be undergoing pivotal changes right now. The broad-reaching and increasingly hard-to-define sector of functional food and beverages has had its share of bumps recently, as well. In fact, in some ways, the bumps are even more pronouncedsince some functional products are seen as discretionary by consumers. However, there are bright spots.
The 2010 survey is insightful, especially Orange Vitamin C + Calcium Enhanced considering it was carvitaminwater from Glacau, have ried out at a time when most Americans were boosted the functional food and still reeling greatly from beverages sector by implying they are the recessions impact, nutritionally comparable to dietary and consumer confidence was very low. As supplements. This product is enriched the recession wanes in with vitamins A, E, C, B3, B5, B6, B9, 2011-2012, it is likely consumers will cerB12 and calcium. tainly gain confidence, PHOTO COURTESY OF MINTEL GNPD and the percentage of functional food and beverage users will rise. Secondly, since 2004, sales in the overall market are up considerably. According to Mintel estimates, sales of functional food and beverages in food, drug and mass merchandisers (FDMx, excluding Walmart) reached nearly $16 billion in 2010, with solid growth of 36% from 2004-2010. Mintel expects that, by the end of 2011, the market will reach $16.5 billion. With the above said, there is also some cause for concern. The market is leveling off, particularly with regard to functional beverages. While a general trend in the last few years shows more consumers are using functional food and beverages, sales trends definitely are leaning toward smaller annual growth rates. Mintel expects that, by the end of 2014, sales for functional food and beverages will exceed $18 billion in
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