A review of functional food: government, firms and consumers.

Abstract

Recently, the functional food market has been confronted with some controversial dilemmas with respect to regulation; market convergence and consumer acceptance and psychological reaction towards it. Rigid regulation on health claims is not only designed to protect consumers from misleading and false marketing campaigns but it is also made to protect disruption of innovation. To develop and market a functional food, a firm needs to comply with this complex regulation and to manage its competencies and resources. Several pertinent competencies relevant for functional food market converge, including a selective measure of managing the firm's capabilities to adopt new technology and knowledge on the issues of consumer's dynamic behaviour, product development and commercialization of innovation. The main aim of this review is to provide insights into three key areas related to functional foods, i.e. regulation, problems encountered when developing a product and entering the functional food market and consumers' psychological set towards functional foods.