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The Fortified Foods Market


Attention: There is an updated edition available for this report.

Americans' obsession with their health, combined with a high-pressure life style that leaves little time for food preparation, has created a $10 billion business in cereals, juices and other foods fortified with the vitamins and minerals missing from a hurried family's diet. Appearing as line extensions in a half dozen food categories, the fortified foods market is notoriously hard to track. This new study examines the regulatory environment, analyzes the growth and product trends shaping the fortified foods market and inspects the changing retail picture. It also unveils the marketing and promotional strategies of major players such as Kellogg's, General Mills, PepsiCo, Coca-Cola, Novartis, Heinz and many others. Finally, the study takes a look at differences and commonalities among consumers of fortified cereals, breads, juice drinks, baby foods and snacks.


Scope and Methodology

Products Covered

This Packaged Facts study focuses on the retail market for fortified foods in the United States. For the purposes of this report, fortified foods are defined as foods and beverages that have been fortified with extra ingredients to enhance their nutritional value. Under these parameters, which agree with the U.S. government’s use of the term “fortified,” foods are fortified only if they have been enhanced to contain a higher nutritional value than they would ordinarily contain prior to processing.

The four major categories of fortified foods are: 1) beverages, consisting primarily of fortified fruit drinks, juices, milk, and milk-alternative beverages; 2) staples, covering a variety of fortified everyday foods, especially ready-to-eat cereal, bread, pasta, and soup; 3) baby food, especially iron-fortified infant formula, but also including iron-fortified or otherwise fortified pureed vegetables and juices for babies and toddlers; and 4) snack foods and desserts, consisting of fortified versions of foods consumed as a treat in between meals or as sweets to finish meals.

Report Methodology

The information contained in this report is based on primary and secondary research. Primary research included on-site examination of fortified food products and the retail establishments that sell them, and consultations with industry executives. Secondary research involved canvassing information and articles appearing in financial, marketing, and trade publications, company literature, and independent financial reports.

Statistics on market size and growth are based mainly on mass-market sales information provided to Packaged Facts on an exclusive basis by Information Resources, Inc. (IRI); these data have been supplemented with estimates and extrapolations from published trade reports. The analysis of consumer use of products is based on data supplied by Simmons Market Research Bureau.

Categories Covered:

  • Beverages
    • Fruit Drinks
    • Juices
    • Milk
    • Milk-Alternatives
  • Staples
    • Ready-to-eat cereal
    • Bread
    • Pasta
    • Soups
  • Baby Food
    • Infant formula
    • Pureed Vegetables
    • Juices
  • Snack Foods and Desserts
  • Common Fortifiers
    • Vitamins
    • Minerals
    • Dietary Fiber
    • Probiotics
    • Herbs

Issues Addressed:

  • Projected market growth by category to 2004
  • Trends affecting market growth
  • Controversy surrounding the market
  • Distribution Methods
  • Government legislation, packaging and labeling
  • Market Share by Retail Channel
  • Market Share by Product Category

Competitive Profiles:

  • Abbott Laboratories
  • Campbell Soup Company
  • The Coca-Cola Company
  • General Mills, Inc.
  • H.J. Heinz Company
  • Hain Food Group Inc.
  • Kellogg Company
  • Land O’Lakes
  • Nantucket Allserve, Inc.
  • Ocean Spray Cranberries, Inc.
  • Odwalla, Inc.
  • PepsiCo/Tropicana
  • Philip Morris Companies
  • The Proctor & Gamble Company
  • South Beach Beverage Company
  • Triarc Companies Inc.

Hours of Research: 945

I. Executive Summary

    Scope and Methodology
  • Products Covered
    The Products
  • Foods and Beverages Fortified to Enhance Nutritive Value
  • Products Not Included
  • Four Major Fortified Food Categories
  • History of Food Fortification
  • Vitamins, Minerals, Dietary Fiber, Probiotics, and Herbs are the Most Common Fortifiers
    The Market
  • Sales Exceed $5.5 Billion in 1999
  • Table 1-1: U.S. Retail Sales of Fortified Foods by Product Category, 1995-2004 (dollars): Staples, Beverages, Baby Foods, Snacks/Desserts
  • Staples, More than Doubling, Are Now the Largest Category
  • Fortified Beverage Sales Grow a Robust 20%
  • Baby Foods and Snacks/Desserts Grow Much More Modestly
  • Staples Now Largest Category
  • Food Stores Dominate Sales
  • Factors in Future Market Growth
  • Figure 1-1: The U.S. Fortified Foods Market: Share of Dollar Sales by Retail Channel, 1999 (percent): Food stores, Convenience Stores, Vending, Mass merchandisers, Natural food stores, Drugstores, Other
    The Marketers
  • Food Companies, Healthcare Companies, Diversified Consumer Products Companies, and New Age Start-Ups
  • Baby Food and Infant Formula Marketers
  • Ready-to-Eat Cereal Marketers
  • Juice and Juice Drink Marketers
  • The Natural Niche in Fortified Juice
  • Dairy, Milk, and Milk-Alternative Marketers
  • Marketers of Fortified Desserts and Snacks
  • Cereals Take the Lead
  • Juices and Juice Drinks: A Complex Environment
  • Herbs for the New Agers
  • Vitamins and Minerals for the Mainstream
  • Procter & Gamble Relatively Inactive
  • Fortified Milk a Niche Market
  • Kellogg Rules Desserts and Snacks Thanks to Nutri-Grain
  • Fortified Infant Formulas Growing Slowly and Consolidating
  • Fortified Baby/Toddler Foods Also Grow Slowly
  • New Product and Marketing Trends
  • Herbal Ingredients in Single-Serve Beverages
  • Calcium in Everything
  • Fortification of Key Existing Ready-To-Eat Cereal Products
  • Many New Fortified Milk and Milk-Alternative Products
  • Fortified Desserts Continue to Multiply
  • Future Fortifiers: Soy Isolates, Anthocyanin, Polyphenol, and Lycopene
  • Advertising and Promotion
    Distribution and Retail
  • Two Distribution Methods: Standard and Direct
  • Where Fortified Foods Are Sold
  • Most Fortified Food Line Extensions Priced at Parity
  • No Separate Display for Fortified Foods
    The Consumer
  • The Overall Fortified Foods Consumer

II. The Products

    Scope of Market
  • Foods and Beverages Fortified to Enhance Nutritive Value
  • A Market of Line Extensions
  • Four Major Categories
  • Definitions: Enriched, Fortified, Functional, Nutraceutical, Supplements
  • Enriched
  • Fortified
  • Dietary Supplements
  • Functional Foods
  • Nutraceuticals
  • Products Fortified by Government Mandate or Industry Custom Are Not Included
  • Sports Nutrition, Energy Bars, Meal Replacements Are Not Included
    History of Food Fortification
  • Deficiency Diseases and Discovery of Vitamins
  • Fortification Introduced in 1920s and 1930s to Prevent Deficiency Diseases
  • Medical Establishment Promotion Helps Make Fortification an Industry Norm
  • FDA at First Promotes Food Fortification...
  • ...Then Discourages It
  • Fortification in the Postwar Era
  • Controversy over Fortification Decided in Marketers' Favor in Late Sixties
  • Questions Raised by the FDA and the Natural Food Industry
  • Complaints and Public Whim Take Their Toll
  • The 1980s: Technology Answers Absorption Issue and Revives Fortified Juice
  • Rise of Vitamin Chains Changes Climate of Opinion
  • Trend toward Segmentation and Related Changes in Grocery Favor Fortification
  • Changes in Regulation Have Positive Effect
    Ingredients Commonly Used to Fortify Foods
  • Vitamins, Minerals, Dietary Fiber, Probiotics, and Herbs are the Most Common Fortifiers
  • Vitamins
  • Vitamin A
  • Vitamin B1, Thiamine
  • Vitamin B2, Riboflavin
  • Vitamin B3, Niacin
  • Vitamin B5, Pantothenic Acid
  • Vitamin B6, Pyridoxine
  • Vitamin B12, Cobalamin
  • Folic Acid
  • Vitamin C
  • Vitamin D
  • Vitamin E
  • Vitamin K
  • Minerals
  • Calcium
  • Chromium
  • Iodine
  • Iron
  • Magnesium
  • Manganese
  • Phosphorous
  • Potassium
  • Selenium
  • Sodium
  • Zinc
  • Table 2-1: Reference Daily Intake of Selected Vitamins and Minerals
  • Dietary Fiber
  • Probiotics
  • Herbal Fortifiers
  • Chamomile
  • Echinacea
  • Ginger
  • Ginkgo
  • Ginseng
  • Oregano
  • Spirulina
  • St. John's Wort
    Regulatory Environment
  • The Nutrition Labeling and Education Act of 1990
  • NLEA Allows for Nine Health Claims
  • Foods Claiming Benefits Must Be Healthy by FDA Standards
  • Dietary Supplement Health and Education Act of 1994
  • Infant Formula Regulated Separately and More Strictly
    Packaging and Labeling
  • Packaging Is Standard
  • Labeling Is Half Regulation and Half Marketing

III. The Market

    Market Size and Growth
  • A Challenging Market to Track
  • Sales Exceed $5.5 Billion in 1999
  • Figure 3-1: U.S. Retail Sales of Fortified Foods, 1995-1999
  • Table 3-1: U.S. Retail Sales of Fortified Foods, 1995-1999 (dollars)
  • Staples, More than Doubling, Are Now the Largest Category
  • Fortified Beverage Sales Grow a Robust 20%
  • Baby Foods Grow Much More Modestly
  • Snacks Grow 12% in 1999
  • Table 3-2: U.S. Retail Sales of Fortified Foods by Product Category, 1995-1999 (dollars): Staples, Beverages, Baby Foods, Snacks/Desserts
    Market Composition
  • Staples Account for Almost 42% of Fortified Food Sales
  • Most Popular Ingredients Used in Fortified Foods
  • Figure 3-2: U.S. Fortified Foods Market: Share of Dollar Sales by Product Category, 1995 vs. 1999 (percent): Staples, Beverages, Baby Foods, Snacks/Desserts
  • Food Stores Sell Around 85% of Fortified Foods
  • Market Overall Is Not Significantly Seasonal
  • Figure 3-3: The U.S. Fortified Foods Market: Share of Dollar Sales by Retail Channel, 1999 (percent): Food Stores, Convenience Stores, Vending, Mass Merchandisers, Natural Food Stores, Drugstores, Other
  • Per Capita, Sales Are Greatest in the Northeast
    Factors in Future Market Growth
  • Fortification Rides the Long-Term Health and Marketing Trends that Promote Functional Foods
  • The Aging of the U.S. Population
  • The Self-Medication Trend
  • Food Is Seen as a Path to Health
  • Food Must Be Convenient and Fun as Well as Healthy
  • The Promise of Biotechnology
  • Marketers Need the New Sales Opportunities That Fortification May Provide
  • European and Japanese Markets Raise Tantalizing Prospects
  • Gradual Relaxation of FDA Regulation
  • High Stakes Bring Nonfood Marketers into Play
  • Potential of New Cholesterol-Reducing Margarine
  • New Soy Claim Sure to Expand Market in the Short Term
  • Ensemble's Failure May Have Dampening Effect
  • The Potential for Disenchantment
  • Figure 3-4: Projected U.S. Retail Sales of Fortified Foods, 1999-2004
    Projected Market Growth
  • Sales of Fortified Foods Will Reach Almost $7.8 Billion by 2004
  • Table 3-3: Projected U.S. Retail Sales of Fortified Foods by Product Category, 1999-2004 (dollars): Staples, Beverages, Baby Foods, Snacks/Desserts

IV. The Marketers

    The Marketers
  • Hundreds of Marketers
  • Food Companies, Food Co-ops, Healthcare Companies, Diversified Consumer Products Companies, and New Age Start-Ups
  • Brands and Marketers Can Be Classed by Sales Venue
  • Baby Food and Infant Formula Marketers
  • Ready-to-Eat Cereal Marketers
  • Juice and Juice Drink Marketers
  • The Natural Niche in Fortified Juice
  • Dairy, Milk, and Milk-Alternative Marketers
  • Marketers of Fortified Desserts and Snacks
  • Table 4-1: Selected U.S. Marketers of Fortified Foods by Brand and Product Category
    Competitive Overview
  • Cereals Take the Lead
  • Juices and Juice Drinks: A Complex Environment
  • Herbs for the New Agers
  • Vitamins and Minerals for the Mainstream
  • Ocean Spray Turns to Fortification
  • Procter & Gamble Relatively Inactive
  • Fortified Milk a Niche Market
  • Kellogg Rules Desserts and Snacks Thanks to Nutri-Grain
  • Fortified Infant Formulas Growing Slowly and Consolidating
  • Fortified Baby/Toddler Foods Also Grow Slowly
    Competitive Profile: Abbott Laboratories
  • Worldwide Revenues of $13.1 Billion in 1999
  • Best-Known Infant Formula Products
  • Abbot Benefits from Wyeth-Ayerst's Exit
  • Promoting Breast-feeding while Putting Its Name Before the Public
  • Expansion in "Emerging Markets" Planned
    Competitive Profile: Campbell Soup Company
  • Sales Placed at $6.4 Billion in Fiscal 1999
  • V-8 Splash Makes Campbell a Leading Fortified Food Marketer
    Competitive Profile: The Coca-Cola Company
  • Net Operating Revenues of $18.8 Billion in 1998
  • Coca-Cola's Juice and Fortified Beverage Brands
  • Minute Maid vs. Tropicana
  • Hi-C Is the Oldest Fortified Juice Brand
  • Hi-C vs. Hawaiian Punch
  • Minute Maid Calcium-Fortified Apple Juice
    Company Profile: General Mills, Inc.
  • Sales of $2.6 Billion in Fiscal 1999
  • Fortifying Products to Support Nutrition Claims
    Competitive Profile: H.J. Heinz Company
  • Sales of $9.3 Billion in Fiscal 1999
  • More than Sauces
  • Nutrition's Place in Heinz's "Formula for Growth"
  • Heinz and Fortified Foods
    Competitive Profile: Hain Food Group Inc.
  • A Major Producer of Packaged Organic Foods
  • Fortified Food Initiatives
  • Heinz Buys Stake in Hain
    Competitive Profile: Kellogg Company
  • 1999 Sales of $7.1 Billion
  • Familiar Brands and Worldwide Operations
  • The Trouble with Cereal
  • Commitment to Change through Innovation
  • Betting Big on Fortified Foods
  • The Ensemble Initiative
  • Ensemble's Challenges
  • Ensemble's Prospects as of Late 1999
    Competitive Profile: Land O'Lakes
  • Net Sales of $5.2 Billion in 1998
  • Growth in a Consolidating Industry
  • Fortification Helps Add Value
    Competitive Profile: Nantucket Allserve, Inc./ Subsidiary of Ocean Spray Cranberries
  • Privately-Owned New Age Drink Company Became Ocean Spray Subsidiary in 1998
  • Ocean Spray Is Warned by Example of Quaker Oats and Snapple
  • Two "Juice Guys" Succeed with Carefree Lack of Professionalism
  • On the Fortification Bandwagon with Other New Age Drinks
    Competitive Profile: Ocean Spray Cranberries, Inc.
  • Sales Almost $1.5 Billion in 1998
  • Into Tropical Blends and Single-Serve
  • Nantucket Allserve Purchase Makes Ocean Spray a Marketer of Fortified New Age Drinks
  • Tiny Co-op Competitor, Northland, Challenges Ocean Spray
  • Fortification to Stem Sales Decline
    Competitive Profile: Odwalla, Inc.
  • Net Sales of $68 Million in 1999
  • Recovery from the Contamination Incident
  • From Founding in 1980 to IPO in 1993
  • Good Works and Profit Go Hand in Hand
  • Odwalla Began Fortifying Juice in Early 1990s
  • Odwalla Nutritionals
    Competitive Profile: PepsiCo/Tropicana
  • Sales of $18.6 Billion in 1999
  • Tropicana Acquisition Puts PepsiCo into the Juice Business
  • Providing Choices
  • Recent Initiatives in Fortified Juice
    Competitive Profile: Philip Morris Companies
  • Worldwide Operating Revenues of $78 Billion in 1998
  • The Company that Marlboro Built
  • Five Business Segments
  • Fortified Food Products
    Competitive Profile: The Procter & Gamble Company
  • Net Sales of $38.1 Billion in Fiscal 1999
  • A Pioneer of Modern Marketing Techniques
  • Procter &Gamble Needs to Move into Growth Markets
  • Still the Leader in Fortified Beverages
  • The FruitCal System
  • Hawaiian Punch
  • Sunny Delight
  • Competitive Threats from PepsiCo, Coca-Cola, and Others
    Competitive Profile: South Beach Beverage Company
  • Privately Owned Company with Headquarters in Connecticut
  • Lack of Distributor Interest Sparks Search for Point of Difference
  • Herbs with Name Claims Help SoBe Stand Out on the Shelf
  • Continued Progress in 1999
    Competitive Profile: Triarc Companies Inc.
  • A Restaurant and Beverage Company with 1998 Revenues of Above $735 Million
  • A Company Renamed and Refocused
  • Snapple Acquisition
  • Snapple Elements Puts Snapple on Herbal Bandwagon
  • Mistic, Too, Fortifies Some of Its Drinks
    New Product and Marketing Trends
  • Herbal Ingredients in Single-Serve Beverages
  • Name Claims in Herb-Fortified Beverages
  • Table 4-2: Selected New Herb-Fortified Foods, 1998-1999
  • (listing): 10 products
  • Calcium in Everything
  • Table 4-3: Selected New Calcium-Fortified Foods, 1998-1999 (listing): 36 products
  • Fortification of Key Existing Ready-To-Eat Cereal Products
  • Many New Fortified Milk and Milk-Alternative Products
  • Table 4-4: Selected New Fortified Milk and Milk-Alternative Products, 1998-1999 (listing): 14 products
  • Fortified Desserts Continue to Multiply
  • Ensemble and the Potential for Integrated Lines of Fortified/Functional Foods
  • Table 4-5: Selected New Fortified Desserts, 1998-1999
  • (listing): 16 products
  • Future Fortifiers: Soy Isolates, Anthocyanin, Polyphenol, and Lycopene
  • Soy Isolates
  • Anthocyanin
  • Polyphenol
  • Lycopene
    Advertising Positioning
  • Advertising Is Linked to Promotion
  • Media Choice Depends on Budget and Audience Size
  • Fortification Used to Define Women's and Children's Niches
  • Calcium Fortification of Minute Maid Helps Reposition Orange Juice for the Morning
  • Kellogg's Ensemble: Brand Change Instead of Lifestyle Change
  • The Place of Professional Communications
  • Image and New Age Ads
  • Advice for Functional Food Advertisers
    Consumer Promotion
  • Beverage and Cereal Consumer Promotions Are Large and Elaborate
  • Sports Tie-Ins Common
  • Convenience Store Marketers and Natural Foods Marketers Have Different Promotional Emphasis
  • Kellogg and Minute Maid Co-Brand for Contest
  • Kellogg Offers Private Health Coach for Ensemble Users
  • Publicity to Health Professionals
  • Good Works and Other Publicity

V. Distribution and Retail

    Distribution
  • Two Distribution Methods: Standard and Direct
  • Warehousing vs. Direct Store Delivery
  • Direct Store Delivery Growing
  • Advantages of Warehouse Distribution
  • Disadvantages of Warehouse Distribution
  • Advantages of Direct Store Delivery
  • Disadvantages of Direct Store Delivery
  • Small Marketers Frequently Work through Brokers
  • Distributor Networks Serve Different Classes of Trade
  • Distributor Margins
  • Distributor Networks Motivate Marketer Alliances and Acquisitions
  • The Battle for Distribution
    At the Retail Level
  • Where Fortified Foods Are Sold
  • Supermarkets Have 83% of Overall Fortified Food Sales
  • Supermarkets' Share of Staples and Baby Food Is Higher, Lower for Beverages
  • Supermarket Selection Is Expanding
  • Convenience Store Selection Best in Beverages
  • Health Foods Store Selection Limited Except for Herb-Fortified Beverages
  • Limited Selection in Warehouse Clubs
  • Most Fortified Food Line Extensions Priced at Parity
  • No Separate Display for Fortified Foods
  • Fortified Breakfast Cereals Receiving More Facings Per Stock-Keeping Unit Than in the Past
  • Natural Foods Store Selection

VI. The Consumer

    Note on Sources
  • Simmons Market Research Bureau Data
    The Overall Fortified Foods Consumer
  • Fortified Food Shoppers Tend to Be Young and Female
  • Certain Segments and Products Can Be Exceptions to Young and Female Rule
  • African-Americans Purchase More Fortified Foods than Other Ethnic Groups
  • Forty-Five Percent of Americans Take Dietary Supplements
    The Fortified Beverages Consumer
  • A Quarter of Tropicana Refrigerated Orange Juice Users Purchase Fortified Version Most Often
  • Table 6-1: Number of Shoppers Purchasing Selected Brands of Fortified and Unfortified Orange Juice, 1998 (number): 6 Minute Maid items, 10 Tropicana items
  • Women More Likely to Buy "With Calcium" Orange Juice than Men
  • Minute Maid's "Plus Calcium" Users Younger and More Upscale than Minute Maid Premium Users
  • Consumers of Calcium-Fortified Tropicana Young and Female
  • Table 6-2: Demographic Factors Favoring Purchase of Fortified/Unfortified Orange Juice by Brand, 1998 (listing): 11 factors; Minute Maid Premium, Minute Maid Premium Plus Calcium, Tropicana Premium Original, Tropicana Premium Plus Calcium
  • Three All-Fortified and One Unfortified Drinks
  • Table 6-3: Number of Shoppers Purchasing Selected Brands of Fruit Drink, 1998 (number): Sunny Delight, Hawaiian Punch, Hi-C, Snapple
  • Three Best Selling Fortified Fruit Drinks Have Similar Brand Profiles
  • Snapple User: Young and Single
  • Table 6-4: Demographic Factors Favoring Purchase of Fortified Fruit Drinks by Brand, 1998 (listing): 11 factors; Hawaiian Punch, Hi-C, Sunny Delight, Snapple
    The Fortified Staple Consumer
  • Kellogg's Frosted Flakes Is Most Widely Used Fortified Cereal
  • Table 6-5: Number of Shoppers Purchasing Selected Fortified Ready-To-Eat Cereal Brands: 1998 (number): 7 brands
  • The Fortified Ready-To-Eat Cereal Consumer Is Fortified Staple Consumer
  • Chex Buyers Older and Downscale Relative to Other Fortified Cereals
  • Kellogg's Fortified Brands Preferred by African-Americans and Americans of Hispanic Origin
  • Multi-Grain Cheerios Provide a Mixed Profile
  • Table 6-6: Demographic Factors Favoring Purchase of Fortified Ready-to-Eat Cereals by Brand, 1998 (listing): 11 factors; Kellogg's Frosted Flakes; Kellogg's Apple Jacks; Kellogg's Corn Pops; Multi-Grain Cheerios; Corn Chex; Rice Chex; Wheat Chex
    The Fortified Dessert/Snack Consumer
  • Nutri-Grain vs. Quaker Oats Granola Bars
  • 23.3 Million Principal Shoppers Buy Granola Bars
  • Few Differences in the Brand Profiles of Chewy Granola Bars and Nutri-Grain
  • Table 6-7: Demographic Factors Favoring Purchase of Nutritious Snacks by Brand: 1998 (listing): 14 factors; Kellogg's Nutri-Grain, Quaker Oats's Chewy Granola
    The Fortified Baby Food and Infant Formula Consumer
  • Young, Married Mothers Who Are Homemakers
  • Few Surprises in Profile of Infant Formula Buyers
  • Table 6-8: Demographic Factors Favoring Purchase of Baby Food by Brand: 1998 (listing): 13 factors; Heinz, Gerber, Beech-Nut
  • Table 6-9: Demographic Factors Favoring Purchase of Infant Formula in Last 30 Days, 1998 (listing): 14 factors

Appendix I: Examples of consumer and trade advertising and promotions

Appendix II: Addresses of selected marketers

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