-- World's biggest chocolate supplier won EFSA backing on claim
that cocoa flavanols are good for blood circulation
-- Barry Callebaut awaits approval from the EU Commission for
the health claim
-- Selling food with a health or wellness claim is an important
niche for food companies
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By Marta Falconi
ZURICH--Food companies including Nestle SA (NESN.VX) and Kraft
Foods Inc (KFT) may soon be able to sell chocolate with a health
claim, after the European Union's food regulator accepted evidence
from their biggest supplier that key cocoa component improves blood
circulation.
Selling food with a health or wellness claim has become an
increasingly important niche for food companies, which are charging
higher prices for these products, hoping to offset dwindling sales
in the face of poor growth in Europe, where branded food products
are losing market share to cheaper alternatives.
The world's largest chocolate manufacturer, Barry Callebaut AG
(BARN.EB), Tuesday won the backing of the European Food Safety
Authority, or EFSA, which regulates health claims on food products,
for its claim that cocoa flavanols can be good for blood
circulation.
The Swiss company said EFSA issued a positive opinion on the
health claim dossier it submitted last year, after the chocolate
maker provided evidence that the intake of 200 milligrams of cocoa
flavanols a day, or compounds that can also be found in dark
chocolate, contributes to normal blood flow.
There is already some evidence that suggests that small amounts
of chocolate may be beneficial. The flavanols have been shown to
lower blood pressure, improve blood flow and reduce heart-disease
risk at least in part by stimulating production of nitric oxide,
which relaxes vessels.
The Zurich-based company carried out over 20 clinical studies
looking at effects of cocoa flavanols on people since 2005, using
cocoa powder and chocolate products made through a special process
it developed that preserves up to 80% of flavanols, which would be
mostly destroyed in conventional chocolate-making procedures.
Barry Callebaut, one of the world's largest buyers of cocoa,
which it turns into chocolate for customers such as Nestle and
Kraft, said that it still awaits approval from the EU Commission
for its health claim. This official backing would give the
chocolate maker the right to use the cocoa flavanols claim for five
years within EU countries. The company said a final decision is
expected at the beginning of next year.
Barry Callebaut would be the first company in the 27-member bloc
to obtain an official validation of the positive effects of cocoa
flavanols.
The company said it sees considerable market potential,
including for applications in chocolate drinks, cereal bars and
biscuits. Barry Callebaut's customers using the high-flavanol cocoa
products would be able to apply the claim on their products and
packaging.
Winning such a health claim isn't easy and could give Barry
Callebaut and its clients a definite competitive advantage, said
Patrick Hasenboehler, a Zurich-based analyst with Bank Sarasin.
"Every food company would like to have products presenting a
health benefit and if you receive a health claim it helps you
differentiate from competitors," said Mr. Hasenboehler, who has a
neutral rating on Barry Callebaut.
The worldwide market for so-called healthy products is a
fast-growing business for food giants, such as Groupe Danone SA,
Nestle SA and Unilever, along with hundreds of smaller companies.
Research by Euromonitor International showed the global market for
health and wellness food and drinks is forecast to rise to $691
billion by 2015 from $601 billion in 2010.
Food makers have embraced this strategy because it allows them
to distinguish their products and charge more by adding healthy
supplements or reformulating them with lower amounts of unhealthy
ingredients like saturated fat. Such health claims are worth
billions of euros in annual sales.
Food giants are facing increased competition from private-label
brands, the cheaper supermarket-branded products which consumers
sometimes prefer in leaner times, and tightened personal budgets in
countries hit by austerity measures.
Write to Marta Falconi at marta.falconi@dowjones.com