Functional foods are the newest opportunity for the food industry and Irish producers would be mad to miss out on the development of this £100 billion (#79 billion) market.

That's the view of Ms Julie Sinnamon, manager of food and natural resources in Enterprise Ireland, who says dairy companies in particular should look at products such as Actimel, the Danone yoghurt health drink, which have made big inroads in this growing market.

Ms Sinnanmon told the Guild of Agricultural journalists last night that the European market was in an early stage of development and if Irish companies could go into this market, they would have as good, if not better, opportunities than other countries.

Functional foods are foods or food ingredients which are said to have a positive impact on your health, physical performance or state of mind, in addition to offering basic nutritional value.

"We are starting with a clean sheet. We can develop an indigenous base with smaller players, adding functional foods to their range; Marks and Spencer range is everything from pizzas to the wide range of consumer foods," Ms Sinnanmon said.

"We could bring in overseas suppliers and link them in with existing Irish food players and there is a lot of Irish interest. And with busy food companies, with players with markets and products, they could develop and broaden their range for Europe, out of an Irish base. We should be going down each of those roads," Ms Sinnanmon added.

Enterprise Ireland has spent the last year examining the market, identifying players, going to the United States and looking at products there. Most opportunity lies in the US currently but the Japanese, with products like Yakult, a yoghurt-like drink, are also make inroads into this market.

"We supply 20 per cent of the world market for baby food. Wyatt in Askeaton, Co Limerick, Nutricia in Wexford and Abbott in Sligo are the three highly successful companies in this area," Ms Sinnanmon said.

Functional foods, from products for sports people to geriatrics, are what we should be marketing now, she said. Casein, a by-product of cheese-making is the main added ingredient in many of these foods and already companies such as Glanbia are supplying US companies which are making these foods.

"This is a major growth market and if Ireland is positioned at an early stage and, having demonstrated through baby foods, the ultimate high-spec product, that we're a huge world player on that stage, we now feel we are positioned to take off," she said.