An apple a day keeps the doctor away, or so the old adage goes.

But what if you could isolate, extract and re-incorporate the most healthful ingredients of apples along with the cancer-fighting properties of flax seed and the bone-building benefits in almonds into a single good-tasting food – a natural product that supported the human body beyond conventional nutrition?

Several Alberta companies and scientists are on the cutting edge of this kind of research, developing and producing “functional foods” which have the potential of adding value and diversity to this province’s agricultural sector.

“Long term, it’s an industry with great potential, because consumers are very concerned about their health and they want to buy food products to contribute to or enhance their health,” says Lou Normand, director of the processing division for Alberta Agriculture.

Al Popil, for Business Edge
Saul Katz of New Era Nutrition believes Alberta has an advantage.

But as the international market for functional foods explodes – particularly in Japan, the United States and Europe – Alberta businesses are encountering some major hurdles in keeping up with the demands of an increasingly health-conscious population.

Alberta is already exceptionally globally competitive in the agri-food sector, and Western Canada is a natural region to build a thriving multi-billion industry, says Saul Katz, CEO of New Era Nutrition Inc.

The Edmonton-based company is a Canadian leader in researching and producing functional foods, and has developed specialized beverages, cereals and nutrition food bars for companies including Kraft Foods, Rexall Sundown and Tree Top.

“We have a tremendous advantage in Canada because of the quality of our science, the access to premium agricultural ingredients, the benefit of the low dollar currency and also the proximity to the marketplace,” says Katz.

But he says while U.S. legislation has allowed health claims on product labels or in advertising to be made for certain foods and consumers to be educated about their health benefits, the process has not been paralleled in Canada, where he says Health Canada regulators are still focusing primarily on food-safety issues.

“In Canada, it’s: ‘God forbid one person should get sick from this or may have a problem,’ ” he says.

“In the States, it’s more of a rational cost-benefit analysis. If 99 people can benefit, and one person might have a problem, they (still) want to bring it in.” In the process, Canadians are being short-changed, adds Katz.

“Americans are getting the health benefits from these products and becoming educated as to what they can eat to support their health.”

Health Canada defines a functional food as foods that are represented or demonstrated to have special health benefits, in addition to providing basic nutrients and nutritional benefits.

It is currently considering permitting two categories of health claims on foods:

* Structure/function claims, which describe the effect of a food or a diet on a structure of physiological function in the human body. For example: “Calcium helps build strong bones.”

* Risk-reduction claims, which describe the relationship between the consumption of a food or a diet and the reduction in the risk of developing a chronic disease or abnormal physiological state, by significantly altering major risk factors recognized to be involved in its development. For example: “Diets high in calcium may help reduce the risk of osteoporosis.”

Health claims must be supported by acceptable scientific evidence. An expert advisory panel has been established to advise Health Canada on developing standards of evidence that would be appropriate for supporting new health claims.

But in the U.S., it is the product manufacturer who determines that any dietary supplement it makes or distributes is safe, and that any claims are substantiated by adequate evidence.

This means that dietary supplements with health claims do not need approval from the Food and Drug Administration before they are marketed.

And except in the case of a new dietary ingredients where a pre-market review for safety data and other information is required by law, a firm does not have to provide the FDA with the evidence it relies on to substantiate the product’s safety or effectiveness.

“Waiting for Health Canada to set the rules of the game in Canada isn’t an option we have for Canadian and Alberta businesses to pursue this opportunity,” says Keith Jones, president and CEO of Alberta Value-Added Corporation, (AVAC), a Calgary-based organization created four years ago by the Alberta government to help develop product ideas and companies to add value to Alberta’s agricultural commodities.

“At the moment, they’re erring on the side of caution, so it’s moving very, very slowly.”

The situation means functional food producers, who would be able to charge more for their products if they could make health claims, are facing a dilemma.

“Without the regulations there isn’t the profit for the companies. And yet the regulatory agencies are very wary of getting into some of these things,” says Peter Sporns, a professor in food chemistry in the University of Alberta’s Department of Agricultural Food and Nutritional Science. The federal government must ensure each health claim is true, and backed by solid science, he adds.

AVAC’s Jones believes industry needs to take charge in pushing for new and better regulations – the lack of which means Alberta companies can research, develop and produce functional foods but must advertise and sell them outside of Canada in countries including the U.S., Japan and Europe where health-claim laws are more favourable.

For example, Edmonton-based biotech company Ceapro Inc. has developed an oat bran product that can be sold in the United States – but not in Canada – with the health claim of being able to lower cholesterol and maintain blood sugar at a healthier level.

“We realize it’s difficult if a company can’t sell in their domestic market,” says Alberta Agriculture’s Lou Normand, who says the Alberta government has been lobbying on behalf of functional food firms.

“The federal government is typically very slow on these issues and want to be fairly careful, but you wonder if they’re not too careful.”

But Ceapro’s chief operating officer Dr. Mark Redmond says financing, not legislation, remains the major issue in growing the functional food industry in Alberta. “For companies trying to get off the ground in Western Canada, you have to do everything with your own money or your shareholders’ money. There’s no other mechanism to ease the transition into larger levels of production,” he says.

And while groups like AVAC “have their finger on the pulse,” he adds, “they don’t have access to the kind of capital we need to grow large business here in Alberta in order to seize the opportunities.”

The other issue is the market for functional food products. A population base of 31 million people in Canada can’t compare to 126 million in Japan, 278 million in the U.S. and half a billion in Europe. “To be successful, our markets have to be offshore,” says Redmond. “That’s where Ceapro has received the greatest

interest in its products, and that’s where we’re driving our products home.” Opinion is more divided on the issue of who should take the lead in promoting the industry and educating consumers.

“The government’s role is primarily in setting the rules of the game, the regulatory environment to ensure high levels of food safety. In terms of educating public on the benefits of specific functional food ingredients, that’s really industry’s role,” says Jones.

But Redmond says while industry has worked hard to help drive provincial initiatives, firms don’t necessarily have the resources or time to act as a lobby group. “What you will have is companies with their heads down running hard to compete in a global sector, and paying attention to the growth of their own businesses,” he says.

Last year, a proposal to set up a Functional Foods “Centre of Excellence” based at the University of Alberta expired before it got off the ground.

It was hoped the new centre would bring together research from the faculties of medicine, pharmacy and science and collaborate with other universities across Canada as well as evaluating claims about health foods in clinical tests.

However, after obtaining seed money, the project stalled due to lack of further funding.

Despite the setback, research into functional foods at the U of A is still “really on the hot burner,” says Sporns. “A number of scientists including myself have a big interest in this area. It’s a growing food category.”

AVAC’s Jones says while key industry players are continuing to exert pressure to to level the playing field between Canada and other countries, consumers can also play a role. “Where it may really accelerate is when consumers understand that right now, options available now in other consumer markets . . . are not available in this marketplace,” he says.

Despite the challenges, industry players believe Alberta’s functional food sector has a promising future.

“We have a tremendous advantage in Canada because of the quality of our science, the access to premium agricultural ingredients, the benefit of the low dollar currency and also the proximity to the marketplace,” says Katz. “All of the components are here.”