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Corn+Soybean Digest

Will Farmers Profit From 'Functional' Foods?

Some 85% of American consumers want to learn more about "functional" foods, according to a survey by the American Dietetic Association (ADA).

The ADA survey concluded consumers are concerned about nutrition, know they could and should eat healthier, but don't want to sacrifice taste and convenience. "Functional foods provide a health benefit beyond basic nutrition," says Zachary Fore, a regional cropping systems specialist with the University of Minnesota Extension Service.

The ADA defines functional foods as "any potentially healthful food or food ingredient that may provide a health benefit beyond the traditional nutrients it contains." Fore says examples of functional foods include products with oat fiber or soy protein (heart healthy) and butter-type spreads that contain benecol (cholesterol reducing).

"What does this have to do with agriculture? Potentially, a great deal," Fore says. "Functional foods may require production of customized raw materials. The functional foods market in the U.S. alone is currently at $8 billion per year, and growing at eight percent annually."

Don't confuse functional foods with "farmaceuticals." "Farmaceuticals are likely to be produced on a very small number of acres by a very small number of farms," Fore says. "But functional foods will be produced on many acres and provide opportunity for many farmers."

Whoever is first to identify and provide what consumers want will profit from functional foods. "But if the past is any indication, it won't be farmers," Fore says "Consumer expenditures for food products have grown dramatically in the last 30 years, but what farmers are getting has grown very little."

Consumers are paying more, but farmers are not sharing in that increased value. "Who is getting it? The food companies who are adding value to the raw materials," Fore says.

Farmers can profit from the functional foods market, but they won't profit by waiting for someone to come and offer a premium price for products they produce, Fore says. To share in the profits, Fore says farmers need to work with commodity groups, universities and other support organizations to develop and own nutritionally enhanced plant and animal traits. Farmers must also own the processing and/or marketing of functional food products.

"A lot of money will be made in the functional foods business," Fore says. "If farmers are wise and aggressive in their thinking, develop partnerships and invest in well- researched value-added opportunities, it can be them."

Fore may be reached at (218) 253-4401, [email protected].

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