Bad Economy - good for health and wellness

By Shane Starling, 20-May-2009

A Euromonitor International report has highlighted the rising importance of prevention of disease and unwellness as opposed to treatment in the minds of large swathes of consumers.

The researcher noted health and wellness (H&W) foods and beverages grew by 64 per cent between 2002-2007, compared with 45 per cent for total packaged food and 57 per cent for hot drinks.

“Is the global downturn the death knell for health and wellness?” Euromonitor head of health and wellness research, Ewa Hudson asks rhetorically. “It most certainly is not. On the contrary, Health &Wellness (H&W) is what consumers want and expect. Without exception, all the major food and beverage players have adopted a long-term commitment to H&W as one of their core strategic pillars.”

She noted Nestlé, responsible for three per cent of global food output, had stated “if we offer better nutrition, we sell more products” and that it sought to ultimately “transform itself into a nutrition, health and wellness company”.

Others such as Danone, Coca-Cola, PepsiCo and Unilever had committed to similar strategies and were putting them in place at varying rates.

Danone was singled out as a health and wellness pioneer as far as the food giants go.

“Not only is its focus on H&W innovation, but it has also been actively divesting the parts of its portfolio which detract from the company's status as a H&W thoroughbred, such as biscuits,” Hudson observed.

“Danone is now all about dairy, bottled water, infant and medical nutrition.”

Consumers had come to expect more in terms of H&W from food companies large and small and demanded benefits “as standard rather than as a temporary add-on warranting a hefty price premium.”

She cited yoghurt as food sector that had had a H&W makeover in recent years. About 35 per cent of global yoghurt sales in 2008 were functional, mostly probiotic yoghurt. The figure was 19 per cent in 1998.

In Asia the figure was even higher at 54 per cent.

Chewing gum, fats and oils, soft and hot drinks were other categories that had turned in a major way toward H&W.

“Although there will always be demand for no-frills economy ranges, and the recession may lead to a temporary increase in consumers opting for these, brand manufacturers cannot afford to dabble in this realm,” Hudson said.

“By continuing to offer H&W benefits and investing in H&W innovation, they will not only manage to evade the doom of the recession, but also ensure that they stay on a long-term growth trajectory.”

ref Food and Drink Europe