Function Drinks’ products were formulated with the expert help of a flavoring company and are labeled with a Supplement Facts panel and the FDA disclaimer regarding claims. Additionally, the levels of the nutraceutical ingredients are detailed. Its “Pacific” coconut-flavored Vacation variety contains magnesium, zinc, L-theanine and L-5 hydroxytryptophan (5-HTP)—the latter ingredients are being investigated for their cognitive effects.

Elements that influence a new product launch, or even a new company, are varied. They range from recognition of consumer needs to a “Eureka!” idea that initiates a new business concept. For Alex Hughes, M.D., co-founder of Redondo Beach, Calif.-based Function Drinks, the seed of inspiration for a new product line was an observation made in a hospital.

“I was amazed at some of the things that we used that were powerful, natural supplements,” says Hughes, an orthopedic surgeon at the UCLA Medical Center. “One example is N-acetyl-L-cysteine (NAC), one of the most potent antioxidants known.” The compound is used for protection of lungs, kidneys and other organs during surgery, chemotherapy and radiation therapy.



What could have been a blue-sky idea for a new business launch was tempered by awareness of business realities. “A good friend’s father was a co-founder of SoBe. I was familiar with some of the business aspects of starting up a beverage company,” Hughes says.

The ingredient NAC eventually found its way into the company’s Urban Detox, House Call and Brainiac products. The latter, formulated to assist memory, mental clarity and mood, also contains vitamin E and zinc as well as ginkgo biloba and soy phosphatidylserine. Hughes notes that he and co-founder Josh Simon initially struggled with taste parameters and turned to a flavor house to help develop their product line.

When asked how the products and ingredients were chosen, Hughes replies that although they are in “fun formats,” they had to be truly innovative, founded on science and, most importantly, relevant to the company’s southern California customers (although the company hopes to be in all major U.S. markets by the end of 2007). While some products in the line are in unique niches, others are in very competitive arenas. Function Drinks’ Alternative Energy, a low-carbohydrate product, is a case in point.

The science behind the product, however, is detailed more than most. Its website notes, “Thanks to the proprietary ingredients and the special pharmacokinetics (or metabolism) of Function Alternative Energy, you avoid the harsh take-off and landing associated with traditional synthetic energy drinks.” Certain plant extracts were included for their ability to provide “energy, stamina and alertness.” Also included is a full complement of the B complex vitamins—zinc and vitamin C—that “play a role in energy source mobilization within the body.”

The product’s efforts to deliver consistent energy is also in harmony with what was reported to be the most important aspect of an energy product, according to the 2007 Prepared Foods’ “R&D Trends Survey: Functional Foods.”

An Energetic Category

The U.S. energy drink category checked in with $3.7 billion in sales for 52 weeks ending July 15, 2007, according to Information Resources Inc., a Chicago-based research firm. This figure includes sales from supermarkets, drugstores, convenience stores and mass merchandise outlets (excluding Wal-Mart). Using Mintel’s Global New Products Database (GNPD) to search for new foods, beverages and dietary supplements with the word “energy” in their description during the January 2006 to July 2007 time period, some 893 new products can be found. “It currently is one of the hottest categories in the functional foods category,” states Lynn Dornblaser, director, GNPD Consulting Services, Mintel International. Although consumer interest in products that stave away “tiredness” and increase stamina may be central to their popularity, the concept of “energy” has also traditionally played a role in weight management.

For example, in 2004, the IFIC (International Food Information Council) Foundation, as part of a public-private partnership called the Dietary Guidelines Alliance, conducted two focus groups to better understand consumers’ attitudes toward the concept of energy balance, particularly as it relates to weight management, says Wendy Reinhardt Kapsak, IFIC’s director, health and nutrition. Overall, consumers associate “energy” with “the feeling of having energy to do the things they want and need to do, not with calories. In fact, consumers react negatively to calories and the idea of having to count them to manage their weight,” the research concluded.

This September, IFIC is releasing new quantitative trending research investigating consumer attitudes towards various food components and health conditions. As part of that study, 501 consumers were queried about energy and fatigue. “We found that energy means different things to different people,” says Reinhardt Kapsak. When consumers think about energy, they relate it to mental or physical tasks or simply as an absence of fatigue.

“When we asked about mental performance, 5% say they have an issue in this area, but a much higher number, 39%, are concerned about it,” she said. In regards to physical performance, 5% say they have an issue with it, while 34% are concerned about it. Lastly, IFIC found that 17% state they have issues with fatigue or currently deal with lack of energy, while 36% said they were concerned about it.

This year’s Prepared Foods’ functional foods survey also investigated the concept of energy from the viewpoint of R&D and marketers in food companies. A quick look at Mintel’s GNPD shows a wide range of foods, beverages and supplements describing themselves as energy products. Examples include the PepsiCo’s SoBe Adrenaline line,  which has a Supplement Facts label quantifying amounts of vitamin B6, B12, taurine, D-ribose and L-carnitine; it also lists the presence of inositol, guarana and Panax ginseng. Masterfoods’ “low GI” Snickers Marathon Energy Bar (labeled as a “Good Source of Fiber. Delivers Long Lasting Energy”), Kraft Foods’ Planters NUT-rition brand Energy Mix (a “natural source” of energy from nuts, soy nuts and honey-roasted sesame sticks) and Canada’s Campbell’s Ignite™ line of frozen meals (delivering protein to help build and repair muscles, vitamins and minerals, and food energy).

In Prepared Foods’ survey, 63% of the 229 survey respondents said it is important for the products to be developed for “sustained energy release.” Only 28% checked off what is perhaps the most “traditional” meaning of energy: “the presence of calorie-providing components.” (See chart “What Makes it an Energy Product?”)

Energy drinks are increasingly criticized for featuring stimulants. A widely disseminated October 2006 Associated Press article reported that market leaders like Austrian-based Red Bull and Hansen Natural Corp.’s Monster tout “promises of weight loss, increased endurance and legal highs.” The article quotes Simmons Research figures stating that 31% of U.S. teenagers (7.6 million) say they drink energy drinks. Such popularity is hard for any industry to turn its back on, and companies will grapple with this issue for years to come. Interestingly, only some 47% of PF survey respondents said it would be important for energy products to contain stimulants, while 49% report it is important for such products to contain specialty ingredients to enhance energy metabolism.

Energy Chemicals from Carnitine to Chromium

Many ingredients added for energy are also key metabolites in the human body. For example, L-carnitine transports long-chain acyl groups from fatty acids into the mitochondria, or organelles inside cells known as “cellular power plants.” Mitochondria generate most of the cell’s ATP (adenosine 5’-triphosphate), a usable source of chemical energy. Chromium is needed for glucose utilization by insulin and also is considered to have a role in energy metabolism. As for taurine, at least one recent finding supports taurine transport as a crucial factor in alleviating muscle fatigue in strenuous workouts and for the maintenance of total exercise capacity (Ulrich Warskulat, U, et al., 2004, FASEB J. 18:577-9). Ribose, primarily used in the form D-ribose, is a component of ATP and several other chemicals that are critical to metabolism. One study’s result supports “the hypothesis that the availability of ribose in the muscle is a limiting factor for the rate of resynthesis of ATP,” although “the reduction in muscle ATP observed after intense training does not appear to be limiting for high-intensity exercise performance (Hellsten, Y, et al., 2004. Am J Physiol Regul Integr Comp Physiol. 286:R182-8).”

B vitamins frequently are found in energy products. Red Bull communicates its role to customers on its website simply as “B-group vitamins play an important role in energy metabolism, such as the build-up and break-down of carbohydrates, fat and protein. B vitamins are also shown to support mental and physical performance.”

Trends in Organic to Cardiovascular

As fast-growing as the energy products category has been, it is not the most popular functional food category. Those surveyed by this year’s Prepared Foods’ functional foods questionnaire were given a list of 16 health conditions and asked, “What ingredient characteristics or benefits present the greatest opportunity for your product development efforts?” and allowed to check off as many categories as they thought applied; some 30% checked “energy.” However, the vague and broad attribute of “natural” came in first, with 58% checking off this opportunity. “Organic ingredients” was the next, with 42% of respondents indicating it was an area with good prospects. “Cardiovascular health” followed at 36%, “digestive health” at 33% and “cholesterol reduction” at 32%.

Respondents were enthusiastic about both natural and organic products; however, senior executives from Kraft Foods, Nestlé, Campbell Soup Company and General Mills that spoke on a health, wellness and foods panel at the 2007 Institute of Food Technologists annual meeting in Chicago were a bit more circumspect. The interest in “natural” was linked to consumers’ desire for simplicity. During the Q&A period, an audience member noted that only one company, General Mills, had said much of anything about organic.

Y. Marc Belton, executive vice president, Worldwide Health, Brand and New Business Development with General Mills, responded that double-digit growth in organic foods might be hard to sustain. Supply of organic ingredients is an issue, one possibly made even more challenging due to the impact of bio-fuels. Matthew Roberts, managing director of corporate business development with Nestlé, said there was some overlap between healthy foods and organic. He felt organic was more of a social issue, a commitment.

Choosing Ingredients for Health

The functional foods survey also explored interest in healthy ingredients. Results dovetail well with the “greatest opportunities” question. The survey listed 27 additives and asked the question: “During the next two years, do you expect the following ingredients to become more or less important in your functional foods formulation efforts?” (See chart “Emerging Nutrients.”) As with Prepared Foods’ “2006 Functional Foods Survey,” “antioxidants” came out on top. Just as the term “natural” can be applied to a broad range of ingredients, so too can many ingredients be considered antioxidants.

With cardiovascular health, digestive health and cholesterol reduction listed as the top health conditions providing the most opportunities, it is not surprising that dietary fiber, omega-3 fatty acids, probiotics, whole fruits and prebiotics—all which benefit heart and/or digestive health—ranked high on the opportunities list. Additionally, prebiotics, probiotics and phytosterols/stanols, ingredients that showed the greatest increase from last year, are categories linked with gut health and cholesterol reduction.

Ingredients in the survey are generally accepted by the mainstream food industry. Yet it is the innovative niche ingredients that may have the greatest ability to help differentiate a product. Their perceived regulatory status determines their use and at what levels—a subject also investigated in this year’s survey.

Many people do not understand the Code of Federal Regulations in regards to permitted food ingredients, notes George Burdock, Ph.D., president of the Burdock Group. Generally Recognized as Safe (GRAS) substances are those considered safe by experts—qualified by scientific training and experience—and, as GRAS, they are exempt from the Federal Food, Drug and Cosmetic Act pre-market approval process.

For a GRAS determination, experts must know at what level and in which of 43 food categories the ingredient will be used (categories are listed in 21 CFR §170.3(n)) and why it is used. The regulations also provide for 32 technical effects or reasons, says Burdock. These are listed in 21 CFR §170.3(o), but “functional food” is not one of them. However, FDA has shown flexibility in allowing the addition of ingredients for no reason other than that the consumer might want to increase his intake of a particular substance.

Historically, the proposed levels of use for an ingredient were at a dose that did not result in a biological effect. When animal safety tests were done, increased levels of the ingredient were administered until a change in the animal was observed. The goal then was to stay well below that level in a food. In functional foods, a physiological benefit—a change—is desired. Thus, higher levels of a substance than were originally approved are needed. These higher levels needed for the “functional” effect will require another GRAS review, states Burdock.

The term “GRAS self-affirmation” often describes a situation where a manufacturer has determined its ingredient to be GRAS without the review of an independent third party. However, because of possible accusations of a conflict of interest, the manufacturer often prefers review by an independent party. “GRAS notification” is the voluntary process of notifying the FDA that a substance has been found to be GRAS, says Burdock. The FDA must respond in writing to the notifier. Currently, the substance then falls under one of four statuses: “pending,” “FDA has no questions,” “at notifier’s request, FDA ceased to evaluate the notice” or the “notice does not provide a basis for a GRAS determination.” The “FDA has no questions” status basically means the FDA reviewed a product’s GRAS claim and had “no comment;” that is, there would be no challenges on the product’s GRAS status at that time. This favorable response increases the likelihood that it will be considered for use by a food company. (See the chart “Considering GRAS Status Ingredients.”)

As with SoBe’s Adrenaline Rush, Function Drinks positioned its products as dietary supplements rather than foods. They are labeled with “Supplement Facts” panels and FDA disclaimer statements. Although the company faced the challenges of formulating scientifically supported ingredients into great-tasting products, Hughes says their greatest challenge was more unique. “When you try to do something that breaks the mold in terms of both philosophy and product form—some ingredients have not been presented in drinkable format before—it is very hard [to find] people that are 120% committed to the idea,” explains Hughes. “Your business partners will tell you that consumers don’t care about science, that the costs are too high and so on. Your business partners need to be believers.” Such challenges are great, but the opportunities are as well.

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