Brand owners target health-conscious shoppers

03 September 2010

NEW YORK: Increasing numbers of brand owners and consumers are turning to health and wellness products, a category that is expected to experience rapid growth as the financial climate improves.

Nielsen, the research firm, surveyed 27,000 adults in 55 countries from Africa, Asia Pacific, Europe, the Middle East, North America and Latin America, in order to gain an insight into popular attitudes.

By contrast, North America posted a figure of 24% and Europe scored 35%, both significantly below the totals in emerging markets.

Obstacles to increased sales include a desire among shoppers to treating themselves on 41%, substandard taste on 25%, lack of availability on 26% and confusion over what foods qualify on 24%.

Elsewhere, 35% of the sample agreed that "I don't always eat healthily because I haven't got time", while 33% stated high prices acted as a major disincentive.

PepsiCo, the US giant, is placing a considerable focus on this area, where brands like Quaker Oats, SoBe and G2 are at the centre of its activity.

The New York-based company hopes sector revenues will triple to $30bn during the next decade, and has incorporated this segment into its "Power of One" scheme.

"We will continue to make our core snacks healthier through innovations in heart healthy oils, sodium reduction, and the addition of whole grains, nuts and seeds," Indra Nooyi, PepsiCo's ceo, said earlier this year.

"We can improve the speed, flexibility with which we respond to consumer requests; and I think that's most exciting is that, we can bring lot more health and wellness offerings in a bundled way to the consumers."

Nestlé, the Swiss group, has also outlined an aspiration to strengthen its equivalent portfolio, currently housing products like Boost, Clinutren, Impact, Optifast and Peptamen.

"[Nestlé has] the ambition to be the world leader in nutrition, health and wellness," Paul Bulcke, Nestlé's ceo, argued.

"It is offering … pleasure, balanced and healthy nutrition to people, to our consumers everywhere in the world."

Heinz, the food specialist, is another operator seeking to enhance its presence in this field, which chief executive Bill Johnson suggested may witness increased demand as the recovery gathers pace.

"The nutritional categories are starting to do a little bit better in the markets where we're seeing some improved economic behavior," he said.

"It's a balancing act of putting resources behind those businesses and those areas where we know we're going to get a return behind those innovations that we think as a highlight with a bit of success or if successful would be."

The scale of this opportunity should not be under-estimated, according to Nielsen data covering the US.

For example, annual sales of goods purporting to be low in fat stand at $46.6bn (€36.3bn; £30.2bn), and several other similar sectors deliver substantial revenues.

However, expansion rates for health and wellness brands slowed in late 2008, after recording quarterly growth of between 18% and 30% over the previous two years.

More positively, "signs of life" are now emerging, with demand rising by almost 10% for the four weeks ending in July 2010.

Data sourced from Nielsen/Seeking Alpha; additional content by Warc staff