Carst and Walker

New Nutrition Business: Ten Key Trends in Food, Nutrition & Health 2009

Functional foods and beverages that provide a benefit consumers can actually feel will be best placed to weather the global economic downturn, advises Julian Mellentin, a world-leading expert on the health and functional food markets and director of consultancy and publisher New Nutrition Business.

ImageUnveiling a his annual trends report – Ten Key Trends in Food, Nutrition & Health 2009 – Julian Mellentin, director of consultancy and publisher New Nutrition Business, says: “In tough times the single most important factor consumers will take into account in choosing a functional food or drink will be whether it delivers a benefit they can feel. When people can feel the benefit that is being offered to them, they can see that they are getting value-for-money.”

The importance of “feel the benefit” already underpinned many successful brands in the good times: “The best examples of the power of ‘feel the benefit’ are energy drinks and products for digestive health. It’s no coincidence that these are already the two largest segments of the functional food and beverage markets worldwide.”

Energy drinks deliver a benefit – a shot of energy – that can immediately be felt. If the 20-somethings who want to party all night can feel that benefit they become – as they have done for Red Bull – loyal consumers.  The energy drink market in the US is worth $6 billion (€4.8 billion), growing at 10% a year. Ten of the top-20 functional food and beverage brands in Japan are for energy or digestion.

Digestive health: with probiotic and fibre-fortified products you very quickly find out whether a product is effective or not by whether it makes you feel “better inside”. Hence brands such as Activia and Actimel have become global successes.

“Products that lack an easy-to-feel effect could be in trouble,” Mellentin observes, giving the example of omega-3 milks: “In Australia sales of omega-3-milks have fallen – in one case by 33% this year. Omega-3 is an essential nutrient, but it doesn’t give a benefit that you can feel.”

Each year since 1995, Julian Mellentin has forecast and analyzed trends in food, nutrition and health. “This year is different,” says Mellentin, “with a growing worldwide recession. The effect of a slowdown will be to reinforce the core trends and sweep away the fads”.

Mellentin’s 10 Key Trends for 2009

1. Digestive health: the biggest trend

  • Products for digestive health make up the single largest segment of the functional foods market in Europe, Japan and elsewhere and this will remain so for some time. Digestive health will probably also become the largest part of the market in the US, where retail sales of probiotic dairy products already amount to over $500 million (€400 million).
  • Digestive health is a wellness issue that affects everyone; it is more important to consumers than heart health or cholesterol-lowering or any other medicalised issue.
  • Scientific overlaps with digestive health and immunity will see these two areas develop in tandem (although digestive health will remain the larger).

2. Feel the benefit: what consumers want most in recessionary times

  • One of the biggest marketing advantages a product can have – and the surest way to create brand loyalty – is to deliver a benefit that the consumer can quickly see or feel. Offering a benefit the consumer can feel will become even more important in an economic environment in which people are becoming more careful than ever about how they spend their hard-earned cash and more focused on value-for-money.
  • Having a benefit that consumers can feel is already the underpinning of many successful brands and the categories that deliver a tangible benefit quickly, such as digestive health and energy drinks, are already the largest segments of the functional foods market, worldwide.
  • We are not suggesting that a quickly felt benefit should be your only strategy – there are many, many benefits that are not immediate but which motivate consumers strongly and have growth potential, such as the perceived benefits of antioxidants, but a tangible benefit is a good insurance policy in tough times when consumers are looking for value-for-money.

3. Weight management: a bright future for foods that make you want to eat less

  • Weight management is an embryonic market which is still new enough for companies to create opportunities and carve out new businesses in a way that is no longer possible in more mature sectors. The market is new but, as we will show, some brands in Europe have already shown that is needed to be successful.
  • Excess body weight is a growing problem around the world, and the market for weight management is steadily becoming a greater strategic focus for companies both large and small although estimates of its potential size are wildly exaggerated).
  • In Europe and America, a clear trend is the decline of the concept of dieting and the rise of weight management as a component of a broader healthy lifestyle. Evidence is accumulating that the ideal target market for new products is people who are only a couple of kilograms overweight; in other words, healthy people with a small and manageable weight problem. In all markets these healthy people, not the obese, will be the majority of consumers for weightmanagement products.

4. Energy: new markets waiting to be discovered

  • Feeling energetic is one of the most basic self-descriptions of wellness in health psychology and having energy, like good digestive health, is a ‘wellness’ issue. It is not only young clubbers who feel they need a shot of energy: again and again research identifies ‘lack of energy’ as a key consumer interest – for stressed executives trying to stay on top of their responsibilities, for harassed and time-pressed mothers, for older people who want to stay active, for anyone struggling to get through a sleepy afternoon in the office.
  • An end to the growth of the energy drink category has been predicted again and again over the last 20 years, but each time the category has defied expectations and maintained double-digit growth. There’s still plenty of room for more – the benefit of “energy” offers a wealth of untapped opportunities, arising from the fact that the energy needs of the majority of consumers just aren’t served by the types of energy drinks currently available. “Energy” shouldn’t be the sole preserve of caffeine and sugar-laced drinks targeted at 20-somethings – the 40-year-old executive and the harassed mother need energy too, and they want it in a healthier form. As a result, the future holds promise for fruit and dairy-based drinks while in the US super-convenient “daily dose” energy drinks are creating a new category.

5. Naturally healthy and free-from: what everyone wants

  • The descriptors “free-from” and “all-natural” on product labels have become key terms of reassurance for health-conscious consumers in most countries – and a basic requirement even for everyday products that do not have an overt health position.
  • Even Coca-Cola has begun to tell people that Coke has “no added preservatives or artificial flavors”, a sign that the trend for products to communicate a “free-from something bad” message has become a standard requirement in most consumer markets.
  • The interest in products being “safe” and “free-from” undesirable ingredients (undesirable in the mind of the consumer, not as defined by science) is a global trend and in Asia events such as the melamine in milk scandal in China in 2008 have fed consumers’ concerns that a product “will do me and my family no harm”.

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