There is a rapidly expanding, North America-wide market for foods that impart health benefits. An increasing proportion of U.S. consumers are aware of the importance of maintaining a healthy lifestyle, and specifically of the strong link between diet and health.

There are two main categories of health concerns in America that FACT products address.

Weight Management.

• Of all Americans adults over 20 years of age, 129.6 million or 64.5% are either overweight or obese.
• As a result, 50 million Americans go on diets each year.
• Weight management stimulates $30 billion in yearly spending on diet foods, diet sodas, books, videos, cassettes, fitness clubs, and related services.

Heart and Cardiovascular Health.

• Cardiovascular Disease has replaced Cancer as the leading cause of disease-related death in the United States.
• Almost 1 million Americans die of Cardiovascular Disease each year, which adds up to 42% of all deaths.
• In the 45-54 age category, close to two thirds of adults have cholesterol levels of 200 mg/dL or higher.

Food Claims

• Thus far, buying trends indicate that the general public is satisfied with advertised food claims of ‘less sugar’ or ‘carbohydrate-reduced’ without looking at ingredients lists. Many advertised claims are both true and misleading.
• Sugar is most often replaced with additional simple carbohydrates, which turn into glucose in the stomach – more glucose than would have been produced by the original recipe. This is bad for diabetics and actually increases weight instead of reducing it.
• As consumer knowledge grows, food manufacturers will increasingly have to back up these claims with well-researched formulations.

Functional Foods Target Market

• FACT is focusing on the general trend towards eating well, and our marketing strategy focuses on those consumers who have a true need for functional foods.
• FACT’s core target market encompasses, unsurprisingly, the majority of the American public
  • consumers with specific health concerns, such as weight loss and gastro-intestinal health
  • people with special dietary needs such as diabetics and people with high cholesterol.
• Within the last decade, the term ‘functional foods’ has adopted a new connotation -- that of imparting a greater physiological benefit than that of meeting basic nutritional needs.
• This new and emerging area of food and nutrition sciences is currently responsible for approximately $30 billion of sales in the United States per year.
• Functional foods’ true benefit to the U.S. economy lies in the category’s potential to curb disease and reduce health care costs.
• For more information on functional foods, visit www.nutriwatch.org.

The Bakery Industry

• FACT’s positioning in the functional foods arena is very good.
• In the bakery industry, products are generally made from low quality, inexpensive and unhealthy ingredients such as bleached wheat flour, shortening, salt and refined sugar.
• Baked goods are major contributors to the greatest health concerns facing Americans – Weight Management and Cardiovascular Health.
• FACT’s formulations include only carefully chosen ingredients in combinations that maximize tangible health benefits.
• A May, 2004 feature Time Magazine article entitled ‘The Low-carb Food Craze’ found that
• 40% of consumers cut down on bread, bread products and baked goods last year.
• Bread companies’ sales have taken a 10% hit in 2003 alone.
• As a result, not only niche bakeries such as The Western Bagel Company, but also larger industrial bakers such as Quality Bakers (a subsidiary of the Goodman Fielder food company) are turning to functional formulations to supplement sales.

How FACT Foods Function

• One of the building blocks of virtually all FACT recipes is a combination of prebiotic-rich fibers. These soluble and insoluble fibers don’t break down into glucose in the stomach, but are transformed into fatty acids by natural bacteria in the large and small intestine.

Prebiotic fibers:

• have a positive effect on the composition of the colonic microbiota
• assist with the absorption of certain vitamins and minerals
• provide very good roughage
• keep hunger at bay for longer

Other factors contributing to FACT products’ functionality:

• cutting edge ingredients such as insulin
• no added sugar and low or no cholesterol
• reduced digestible carbohydrates
• low sodium

Eating a FACT Foods bagel with prebiotic-rich fiber, for example, affects your body differently than eating a regular bagel:

• digestion of FACT products results in minimal glucose formation
• there is no sudden spike in blood-glucose levels
• people tend to feel less lethargic after eating
• you are not famished two hours after a meal
• your body is provided with a steady stream of nutrients over a longer period of time (which can help to curb appetite)
• the fiber both provides good roughage and promotes the absorption of nutrients
• balance is restored to your gastrointestinal tract

Creating products with these characteristics that are delicious and have the right mouth-feel is the result of extensive development.

Holistic Health

It is important to remember that functional foods are not a standalone solution to health concerns. There are healthy and less healthy foods, but paying attention to all components of one’s diet is the key to eating well. Eating well is only one component of staying well; other components include physical activity, sleep, stress, alcohol and tobacco consumption.