Bridging the gap

by Keith Nunes
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The phrase “sports nutrition” conjures images of bodybuilders and marathoners. As interest in the category has broadened marketers have introduced a new phrase, “active nutrition,” to
communicate the benefits of the products to a more diverse audience. Two companies, Hormel Foods and Post Holdings, have made significant investments in the category during the past year with an eye toward reaching the active nutrition audience.

This past July, Hormel Foods, Austin, Minn., acquired CytoSports Holdings, the manufacturer of Muscle Milk, for $450 million. The company’s product line includes ready-to-drink (R.-T.-D.) beverages, protein-based powders, nutrition bars and energy chews.

“Muscle Milk products will serve as a growth catalyst for our Specialty Foods segment, providing this division with a leading brand in the high-growth sports nutrition category,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer at Hormel Foods, at the time of the acquisition. “The acquisition of CytoSport expands our offerings of portable, immediate, protein-rich foods, and broadens our appeal with younger consumers. Muscle Milk premium protein products further enhance our balanced business model.”

Post Holdings, St. Louis, has made two acquisitions in the sports, active nutrition category. In December 2013 the company acquired Dynamatize, a manufacturer of protein powders, bars and nutritional supplements under the Dymatize and Supreme Protein brands. The business’s products are sold in the sports nutrition supplement and nutrition bar categories.

Then in February of this year, Post acquired the PowerBar and Musashi brands from Nestle for $550 million. The brands are sold in the sports nutrition supplement and nutrition bar categories.

“If you look at the categories these companies play in, they are very much core sports nutrition,” said Chris Schmidt, consumer health analyst for Euromonitor International. “While Muscle Milk is best known for its mass-friendly R.-T.-D.s, the Pro Series and powders are a substantial part of its portfolio. Muscle Milk’s pre-workout, B.C.A.A. (branched chain amino acids) and creatine formulations are just as advanced and focused on the core users (bodybuilders, elite athletes, etc.) as any other core-only brand.

“Dymatize is one of the most core-user-focused brands in sports nutrition, even if they have recently been pushing beyond the bodybuilder demographic into more lifestyle-fitness (with the Pursuit Rx line for Crossfit/competitive fitness users).”

But by rebranding the category as “active nutrition,” it appears both companies are intent on expanding their market.

“’Active nutrition’ is simply a more approachable term than sports nutrition, which still has a bit of a ‘hardcore’ connotation for average consumers,” Mr. Schmidt said. “Active nutrition essentially presents the same products in the light of a healthy, fitness-focused lifestyle, as opposed to products specifically designed to increase athletic performance. Within an ‘active nutrition’ branded environment, there will be more focus on convenience formats, bars, R.-T.-D.s, chews, gels, etc., and more of a focus on protein, as protein remains the most ‘food-like’ ingredient in the sports nutrition universe.”

Euromonitor estimates that the retail value of sales of sports nutrition products in the United States, which the market research firm defines as the aggregation of vitamins and dietary supplements, sports nutrition and weight management categories, to be $8.8 billion. A clearer picture of the market comes into focus when sports drinks ($18.7 billion), energy drinks ($27.6 billion), and energy and nutrition bars, excluding bars tracked under the sports nutrition category ($2.9 billion) are added together.

Powders remain the most common sports nutrition product format, across both protein and non-protein products, Mr. Schmidt said. Ready-to-drink protein drinks are expected to be the fastest-growing category through 2018 with a 10% compound annual growth rate. The R.-T.-D. beverage format also is gaining favor in non-protein products, especially as companies like VPX/Redline Sports Nutrition and Performance Beverages, and Optimum Nutrition, try to attract more casual users to the pre- and intra-workout usage occasions.

Mr. Schmidt added that R.-T.-D. protein beverages are expected to be the fastest growing category and will top $1 billion in global retail sales by 2016.

“The massive rise of protein’s healthy halo in general has greatly expanded the market for high-protein foods,” he said. “Simultaneously, there is a significant shift in how consumers in the U.S. and other developed markets view health and fitness. They are taking a much more active role and beginning to realize that silver bullets don’t work.

“Diet and exercise regime change are necessary, and supplements can be a helpful boost, even if they’re just used as substitutes for less healthy indulgence foods. Convenience has certainly played a role in expanding the demographic, as demonstrated by the growth of Protein R.-T.-D.s and, as the slew of natural launches (like) CorePower, Muscle Milk Organic, etc., in the last three to five years shows, producers are increasingly looking to the general health and wellness packaged foods industry for inspiration and consumers to poach.”

Dan Grazaitis, a food scientist with TIC Gums, White Marsh, Md., said health and wellness trends continue to penetrate the beverage category as consumer demand drives growth for nutritionally fortified products.

“Subsequently, product developers are challenged with creating innovative, consumer-friendly beverages that maximize nutritional value without negatively impacting sensory attributes,” he said.

Meghan Wahlin, business development manager of sports nutrition for Glanbia Nutritionals, Fitchburg, Wis., noted that the expansion of protein into the mainstream demonstrates that it is no longer a niche product for a niche audience.

“Whether derived from whey or milk, protein’s popularity crosses all demographic boundaries and continues to soar,” she said. “In a highly scrutinized market, protein is a well-recognized and accepted macronutrient, and lifestyle diets such as paleo and vegan help to drive its success.

“While some food brands that were once cutting edge are now introducing products that trend toward a more mainstream consumer market, other established companies are capitalizing on the protein craze. This has led to the innovation of products such as protein-fortified pancake mix, cereal, ice cream and granola bars, all of which now appeal to mainstream consumers looking for additional protein in their diets.

“Additional ingredients such as creatine and amino acids are also enjoying a shift into the mainstream as the benefits they offer to the sports nutrition category are becoming increasingly recognized. During a workout, creatine plays a vital role in the provision and transfer of energy, offering more power and strength for high intensity performance.

“Amino acids, meanwhile, essential for growth, protein synthesis and nutrient transportation, contribute to the maintenance of lean muscle and aid the building of muscle mass during a workout, as well as cell repair in the recovery stage.”

Product development challenges

The issue companies like Hormel Foods and Post Holdings face in trying to take traditional sports nutrition products, those whose core users may overlook the organoleptic properties of an item in exchange for a proven functional benefit, to an active nutrition audience is product quality.

“The main challenge when formulating ingredients for use in the sports nutrition sector is creating products that not only deliver functional and formulation benefits, but also offer sensory appeal,” Ms. Wahlin said. “Taste and texture are significant properties. If an R.-T.-D. or bar doesn’t taste good, it won’t sell, so manufacturers need to focus on creating a product with desirable sensory qualities.

“Various challenges arise when working with protein ingredients. They can confer a bitter taste in beverage applications and generate a ‘hockey puck’ outcome in bars.

“In addition, ingredients such as creatine and amino acids are insoluble and can negatively affect a product’s organoleptic properties. At Glanbia Nutritionals, we’re set up well to respond to each of these challenges.”

Glanbia has developed its PepForm technology to address the solubility issue.

“By binding specific amino acids to whey peptides, the ingredient platform facilitates improved utilization and high nutritional value in a soluble and highly bio-available form,” Ms. Wahlin said. “We also have a dedicated Flavor Artistry team that is expert in working with the complexity of proteins, enabling us to deliver products that are not only functional but that also offer an appealing, clean flavor profile.”

Texture is also an issue in developing sports nutrition items.

“TIC Gums now has an expanded selection of stabilization solutions for ready-to-drink beverages with the new Ticaloid Pro series,” Mr. Grazaitis of TIC said. “These blends are used to stabilize a range of protein concentrations and prevent sedimentation of other difficult-to-suspend ingredients, such as vitamins, minerals and cocoa powder.”

For higher dairy-based protein systems or systems with increased suspension requirements, TIC Gums offers Ticaloid Pro 432, which allows product developers to achieve suspension requirements for protein and prevent sedimentation of additional ingredients.

Mr. Grazaitis added that reformulation of products to achieve greater mass market appeal will not be a simple process.

“Sometimes manufacturers are under the misconception that gum systems that work in their current formulation will work just as well in a new formulation,” he said. “Many times a simple 1:1 replacement will not yield a satisfactory end-product.

“An example is when replacing or adding to traditional (dairy) proteins with non-traditional (soy, pea, almond…) proteins. Each protein type reacts differently depending on processing environments, other ingredients within the formulation and even packaging.”

While health and protein may be two key components of sports nutrition, Mr. Ettinger of Hormel sees additional opportunities in convenience.

“Clearly nutritious, this product line is designed with high protein, low carb and that’s a core appeal of the product line,” he said Sept. 3 in a presentation at the Barclays Back-To-School Consumer Conference in Boston. “And then clearly an on-the-go based item, so whether it’s an after workout item or a breakfast replacement item, it is again an item you can just carry with you and you’re ready to go.”

Clean label remains a key trend in the category, but Ms. Wahlin emphasized that product formulators must be careful to not trade a shorter ingredients panel for functional benefits.

“With the health and wellbeing trend becoming more and more prevalent, we are seeing increased demand for cleaner labels in the development of sports nutrition products,” she said. “The primary concern among consumers, however, is the product’s effectiveness. While each brand is different and provides varying advantages, manufacturers need to ensure that the functionality and high performance benefits of a sports nutrition product remain their top priority and are not compromised.”
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