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Foods offering medical benefits are the coming wave in grocery marketing.

So-called nutraceuticals, a term being avoided by marketers for regulatory reasons, could take wellness foods beyond vitamin-enriched cereals and fat-free cookies.

"Every major food and pharmaceutical company out there has a nutraceutical task force," said Dr. Stephen DeFelice, founder of the Foundation for Innovation in Medicine. The group's recent conference packed in executives from Procter & Gamble Co., Hormel Foods, Nestle Foods Co., Hunt-Wesson, Slim-Fast Foods and M&M/Mars.


There are two major forces driving the trend: health maintenance organizations, which are emphasizing prevention of illness as a way to lower insurance costs, and the aging of America.

"With the aging of consumers . . . there will be an increased demand for food that will help in preventing and managing disease," said Dr. William Mayer, president-general manager of Kellogg Co.'s new Functional Foods Division, formed in October.

Kellogg has committed $65 million to the unit, whose focus is the

The marketer could not be reached for comment.


Kellogg also isn't talking about its new division, but a company statement said: "Increasingly, medical research shows consumption of certain nutrients can provide protection against conditions such as heart disease, high cholesterol, blood pressure and osteoporosis."

In forming a new division to handle nutraceuticals, Kellogg is following the same road as other marketers. Campbell's Intelligent Quisine will be marketed under a new entity called the Center for Nutrition & Wellness, while Mars Inc. now has a Sports Nutrition Division.

The separate divisions are necessary, says Dr. DeFelice, because while "drug companies spend 14% of their gross sales on research and development, food companies spend less than 0.5% of sales on R&D. . . . They have to get away from their cultures" to create nutraceuticals.

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