Eat It, It's Good For You!

Companies are betting big on disease-fighting foods

Some products being cooked up by big foodmakers don't exactly set the mouth to watering. There are tomatoes enhanced with the potential anticancer nutrient lycopene. Eggs enriched with heart-healthy omega-3 fatty acids. Margarine with cholesterol-lowering substances. Yogurts containing "good" bacteria to ward off bad microbes.

Welcome to the brave new world of "functional foods." Kellogg, ConAgra, Mars, Zeneca, DuPont, and several other food and pharmaceutical companies are rushing to engineer foods that go beyond good nutrition to offer some enhanced health benefit. Market researcher Kalorama Information LLC expects sales of foods bought for their healthy properties to reach $17.6 billion in 2001, from $15.2 billion in 1998. "This is growing into a mass market faster than people anticipated," says Clare M. Hasler, head of the functional-foods research program at the University of Illinois.

But the functional-foods phenomenon poses considerable challenges. Consumers will have to sort through a confusing barrage of messages about what to eat, while foodmakers must deliver the health benefits they are promising without compromising taste.

Kellogg is mounting one of the most ambitious attempts to build a better food. In February, the cereal giant will begin shipping a line of cholesterol-lowering foods, under the brand Ensemble. Most Ensemble products, which include frozen entrees, bread, cereal, and desserts, contain a soluble fiber called psyllium, derived from certain wheat husks, that has been proven to lower cholesterol. Kellogg and others launched psyllium-containing cereals a decade ago, igniting a controversy that led to stricter Food & Drug Administration rules about health claims made for food. In early 1998, the FDA approved psyllium health claims after Kellogg submitted more than 50 studies showing that the fiber, as part of a diet low in cholesterol and saturated fat, may reduce the risk of heart disease.

But good science doesn't guarantee success in the food business. Although consumers have embraced some health-boosting products, such as Tropicana Products Inc.'s orange juice enriched with calcium, taste still rules. Take Campbell Soup Co.'s discontinued Intelligent Quisine frozen entrees. After pumping $50 million into a line of foods proven in clinical trials to lower blood sugar, cholesterol, and blood pressure, Campbell pulled the plug on the brand in March, 1998. A spokesman for Campbell says the line was pulled because the company is focusing on its core soup business, but Gary Stibel, founder of the New England Consulting Group, says the line fizzled largely due to lack of flavor and variety. "Real questions remain as to whether consumers will pick products purely based on perceived health benefits," admits R. David C. Macnair, Campbell vice-president for global research and development.

Thanks to a tricky regulatory environment, functional-foods players must also be careful how they define their products. Some offer them as dietary supplements, which are governed by looser rules than many foods. Monsanto Co., for example, began selling an omega-3 fatty acid to dietary-supplement makers in early 1998. Typically found in fish, omega-3 fats are known to lower triglycerides, compounds that scientists believe play an important role in heart disease. And ConAgra, in Omaha, introduced Culturelle capsules as a dietary supplement in September, though it may eventually offer the product in foods such as yogurt. Culturelle is a strain of good bacteria that can survive the acid in the stomach to fight off bad bacteria.

Once such ingredients are put into foods, however, the rules may change. The FDA can bar a food if it contains additives that haven't been proven safe--a right it exercised in October, when it blocked Johnson & Johnson's plans to sell Benecol margarine. Benecol contains the cholesterol-lowering ingredient stanol ester, derived from plants. Johnson & Johnson argues that Benecol should be regulated as a dietary supplement, but the FDA has determined that it is a food and can't be sold until the company proves that stanol ester is safe.

SOY PILLS. A lack of scientific certainty isn't slowing down other efforts. On Nov. 10, the FDA published a proposed rule that would allow foodmakers to make health claims about soy protein's role in reducing the risk of heart disease. It isn't exactly clear how soy protein works, but studies have shown that isoflavone, one of its components, may play a role. So Archer Daniels Midland Co. is now offering soy extract with concentrated isoflavones for use in dietary supplements, and is researching the role isoflavones may play in protecting against prostate cancer.

But ADM's product has its critics. Stephen Barnes, professor of pharmacology and toxicology at the University of Alabama at Birmingham, is concerned that with the soy component available in capsule form, people may skip eating the food and pop pills instead. He warns that consumers may decide on their own to take well in excess of recommended doses. "We don't know what the heck will happen at that point," he says.

Functional-food makers, though, are not letting such concerns slow them down. Next up will be genetically engineered crops, such as a tomato in the works from Zeneca PLC that has high levels of lycopene, which has been linked to a reduced risk of prostate cancer. "This is the way people will eat in the future," claims Tony DeLio, a vice-president with the Uncle Ben's division of Mars Inc. "The key thing for big companies like ours is to get the science right." Looks like the line between food and medicine is getting blurry.

    Before it's here, it's on the Bloomberg Terminal.