© Datamonitor 2 Insights Into Tomorrow’s Nutraceutical Consumers John Band March 2006.
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Transcript of © Datamonitor 2 Insights Into Tomorrow’s Nutraceutical Consumers John Band March 2006.
© Datamonitor2
Insights Into Tomorrow’s Nutraceutical Consumers
John Band
March 2006
© Datamonitor3
Agenda
• Market context
• Consumer insights
– Lifestyle health problems are on the rise
– Healthy eating is increasingly part of consumers’ lives
– People do not believe manufacturers’ health claims
– Consumers have an attitude-behavior gap over healthy eating
• Conclusions
© Datamonitor4
The nutraceuticals market is much larger in the US than in Europe
-
5
10
15
20
25
30
1999 2004 2009
Nu
trac
euti
cals
mar
ket
valu
e (U
S$b
n)
Europe
US
Market context
Nutraceutical consumption is growing fast
• The US nutraceutical market was worth US$18.9bn in 2004, with annual growth averaging 7.2% between 1999-2004
• The European nutraceuticals market is less developed than that in the US with sales of US$5.0bn in 2004, but is growing slightly faster at 7.4% a year
© Datamonitor5
What are the consumer trends driving growth?
• Rising consumer awareness of, and active interest in health
• Growing trend towards self-medication
• An aging population concerned with health and beauty
Market context
© Datamonitor6
What are the key developments within the industry?
• Technological advancements in ingredients:
– New functionality
– Efficacy
– Taste & usability
Market context
© Datamonitor7
• Effective remedy for female health issues such as estrogren imbalance and menopause
• New studies are encouraging for efficacy in treatment of hormonal shifts
• Arthritis and joint disease are increasingly concerns for Baby Boomers
• New formulations are not shellfish-derived and can be used widely
• Beverage and candy forms are growing in popularity
• Fishy taste, texture and instability have kept growth relatively low
• New powder form of omega-3 is heat-stable and tasteless and can be used in foods and drinks
Formulation developments have affected a number of ingredients
• Recent data has linked calcium consumption to increased weight loss
• Studies showed that subjects ingesting lowest levels of calcium were six times more likely to be overweight
CALCIUM
• Plays large role in energy production
• Recent findings show that CoQ10 supports oral and gum health
• CoQ10 depletes with age
CoQ10
• Associated with prostate health, eye health and cancer prevention
• New application in skin health and anti-aging have been developed
LYCOPENE
OMEGA-3 GLUCOSAMINEBLACK COHOSH
Market context
© Datamonitor9
Strong growth in the usage of nutraceutical claims
5.5%
11.5% 10.5%
23.7%
9.9%
15.1%16.1%
25.3%
0%
5%
10%
15%
20%
25%
30%
Food Beverages Food Beverages
Europe US
2001 2005
% of new product
launches
The number of nutraceutical claims made on-pack on new launches
Market context
Source: ProductScan analysis of 30,000 launches tracked per year across Europe + US
© Datamonitor10
Agenda
• Market context
• Consumer insights– Lifestyle health problems are on the rise
– Healthy eating is increasingly part of consumers’ lives
– People do not believe manufacturers’ health claims
– There is an attitude-behavior gap over healthy eating
• Conclusions
© Datamonitor11
Lifestyle health problems drive nutraceutical consumption
0%
10%
20%
30%
40%
50%
60%
70%O
ral h
eal
th
Ene
rgy
Gut
hea
lth
Ski
n, h
air,
nails
Moo
d
Hea
rt h
ealth
Eye
hea
lth
Ant
i-ag
ing
Bon
e h
ealth
Alz
heim
er's
Insight: lifestyle health problems are rising
Which of the following are you concerned about on a regular basis?
HIGHER LOWERDaily Relevance
Source: Datamonitor / Nutraceuticals World survey 1,002 US consumers, 2005
% of US adults, 2005
© Datamonitor12
Gut health concerns motivate mainstream consumers
Insight: lifestyle health problems are rising
(millions of people)
Nutraceutical consumers
Those with illness
At-risk population
Heart health 4.0 107.4 191.4
Bone health 2.2 73.0 117.3
Gut health 3.7 0.5 6.5
• The number of people who regularly consume specific heart- and bone-healthy nutraceuticals in Europe is far lower than the number of people suffering from associated conditions.
• The reverse is true for gut health, because gut concerns are important to all consumers.
© Datamonitor13
Gut health concerns motivate mainstream consumers
Gut friendliness, microbes
Improved digestion
Healthiness, superiority
Wellbeing
Control over life and health
Lightness, energy, contentment
Promotes health effects
Taste and sensory quality
Reasons to choose functional yogurts
Physical wellbeing Mental wellbeing
Pleasure and enjoyment
Freedom of choice, variety
Fruit and berries, sugar
Gut friendliness, microbes
Improved digestion
Healthiness, superiority
Control over life and health
Lightness, energy, contentment
Promotes health effects
Pleasure and enjoyment
Freedom of choice, variety
Fruit and berries, sugar
Consumers enjoy “indulging” in health – they want to feel good now
Insight: lifestyle health problems are rising
© Datamonitor14
There is a market for targeting long term health
• Of course, there are potentially large addressable markets for targeting medical / long term health concerns
Insight: lifestyle health problems are rising
© Datamonitor15
Heart health is a growing unmet need
Insight: lifestyle health problems are rising
The number of people suffering from heart disease is rising as the population ages
Number of heart disease sufferers, 2000-2010:
Source: Datamonitor
0
5
10
15
20
25
30
2000 2002 2004 2006 2008 2010
France
Germany
Italy
Spain
UK
Sweden
Netherlands
© Datamonitor16
6466687072
74767880
2000 2005 2010
Bone health concerns are also driven by an ageing population
Source: Datamonitor Healthcare Business Unit
Insight: lifestyle health problems are rising
NB: Osteoporosis = brittle bones; osteopenia = weak but not brittle bones
The number of people suffering from bone health conditions is rising
European osteoporosis and
osteopenia sufferers (millions)
© Datamonitor18
• In all countries, around 30% of consumers consider it ‘very important’ to improve physical health through diet
• This suggests a hard core of healthy living and healthy diet advocates
• The extent to which mainstream consumers follow their lead depends strongly on local and cultural factors
People increasingly understand the importance of a healthy diet
European and US Consumer Survey
0% 20% 40% 60% 80% 100%
France
Germany
Italy
Netherlands
Spain
Sweden
UK
US
% respondents
Not important Important Very important
Insight: healthy eating is part of everyday life
Healthy eating is increasingly part of consumers’ lives
© Datamonitor19
Successful products focus on desires for a healthy lifestyle
“Keep your Inner-self healthy and happy”
“Thick and creamy yoghurt”
Insight: healthy eating is part of everyday life
“Friendly bacteria”
Ads about not caring what others think – feeling superior to the average Joe
Danone:
Yakult:
© Datamonitor20
Consumers want quality of life not just longer life
• Life expectancy is rising, we expect to live longer
• But it’s not enough to just prolong an average / unfulfilled life
• World Values Survey data shows that consumers values are shifting from materialism to post-materialism – from security to quality of life
• We want to be happier, be in control, live the celebrity lifestyle, have satisfying careers not just secure ones… = Quality of life
Why consumers want the ‘feelgood’ factor:
Insight: healthy eating is part of everyday life
© Datamonitor21
• Consumers across the US and Europe are skeptical of the product claims made by food and drinks manufacturers
• They view them as less trustworthy than banks, insurance companies, utilities or car dealers.
0%
10%
20%
30%
40%
50%
60%
70%
Trustworthy Untrustworthy
Nutritional claims made by food and drinkplayers
% r
es
po
nd
en
ts
Europe
US
European and US Consumer Survey
Insight: people do not believe health claims
People do not believe manufacturers’ health claims
© Datamonitor22
• People are especially skeptical of health-boosting claims (rather than general nutritional claims), which is a serious barrier to wider nutraceutical adoption.
• Snake-oil salesmen, psuedo-science and promises of ‘miracle cures’ have eroded public confidence
0%
10%
20%
30%
40%
50%
60%
Trustworthy Untrustworthy
Health-boosting claims made by food and drink players
% re
spon
dent
s
Europe
US
European and US Consumer Survey
Insight: people do not believe health claims
People do not believe manufacturers’ health claims
© Datamonitor23
Consumers do not value specific ingredients as highly as manufacturers think
60%56%
74%
36%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Awareness Purchasing Driver
Manufacturers
Consumers
Source: Datamonitor / Nutraceuticals World survey 1,002 US consumers; local trade interviews, 2005
Manufacturers need to focus on educating consumers about the benefits of functional ingredients
Manufacturers’ perceptions of consumers’ awareness of and purchasing driver for Omega 3, and actual consumer survey data
Insight: people do not believe health claims
© Datamonitor24
88%79%
96%
69%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Awareness Purchasing Driver
Manufacturers Consumers
Calcium
75% 74%
88%
60%
Awareness Purchasing Driver
Antioxidants
52%
38%
67%
22%
Awareness Purchasing Driver
Glucosamine
Consumers do not value specific ingredients as highly as manufacturers think
Source: Datamonitor / Nutraceuticals World survey 1,002 US consumers; local trade interviews, 2004
Insight: people do not believe health claims
© Datamonitor25
• Focus tightly on specific health benefits
– Functional food and drinks cannot adopt a general wellness position: although consumers believe that certain ingredients can benefit specific areas of wellness, they tend to reject claims that a product can produce change for the better across a range of health conditions.
• Seek endorsements from reputable organizations
– 40% of consumers say that specialist advice would make them more likely to buy a cosmeceutical product. This is also the case for nutraceuticals, which tend to have similar functional benefits.
Manufacturers must communicate effectively with consumers to gain their trust
Insight: people do not believe health claims
© Datamonitor26
• Younger consumers show the biggest gap concerning general health
– In both Europe and the US, consumers are highly likely to say they believe that improving physical health is important, but are less likely to take active steps to improve their physical health – the spirit is willing, but the flesh is weak.
– Young Adults are almost 20% less likely to have taken steps over the last year to improve physical health than they are to believe that physical health is important, whereas this gap is as low as 4% among Late Senior consumers.
Insight: the attitude-behavior gap
Consumers have an attitude-behavior gap concerning healthy eating
© Datamonitor27
• Men show the biggest gap when it comes to healthy eating
– There are deep-seated differences in attitudes: while attempting to follow a healthy diet is expected for women, many men view this as un-masculine and as a waste of time.
– This difference is particularly pronounced in the US, but it also exists in Europe.
Insight: the attitude-behavior gap
Consumers have an attitude-behavior gap concerning healthy eating
© Datamonitor28
Consumers want good taste and ‘fit’ with their lifestyles
Insight: the attitude-behavior gap
• Taste is still more important than health
• Convenience dominates lives – the demand for quick fix solutions
– Few people like making significant lifestyle changes (e.g. only 1% of dieters achieve permanent weight loss) - people want quick fixes
– So make products simple and easy to use
– Does the product meet the occasion? – portable, ready-to-use, single serve etc.
© Datamonitor29
• Use natural ingredients for taste and authenticity
– Targeted functional products can be made from natural ingredients, but many natural products currently just make general health claims.
• Tap into demand for ‘accessible premium’ products
– Some nutraceutical categories can be marketed as strongly aspirational even at a relatively low price point.
Products that address the attitude-behavior gap
Insight: the attitude-behavior gap
© Datamonitor30
Agenda
• Market context
• Consumer insights
– Lifestyle health problems are on the rise
– Healthy eating is increasingly part of consumers’ lives
– People do not believe manufacturers’ health claims
– There is an attitude-behavior gap over healthy eating
• Conclusions
© Datamonitor31
Conclusions
• The largest addressable market is in ‘high daily relevance’ areas such as performance boosts and presentation rather than long term disease prevention / treatment.
• Long term health needs can be exploited, but you need to show immediate benefits (mental well-being) to reach the broadest market among those that are interested.
• In either case, offer consumers immediate benefits – mental well-being / feelgood factor and communicate these in a positive, non-threat based way.
• Consumers are skeptical of product claims, so build your products’ functionality on credibility – offer specific health benefits, don’t be general.
• To overcome the attitude/behavior gap, the product needs to taste good and ‘fit’ with their lifestyle.
© Datamonitor32
Don’t forget: is your offering better than alternative solutions?
• Does your offering really provide a better consumer solution than existing options?
• Often you will be up against some powerful competitors:
– Medical functional food/drink vs.Over-the-counter medicines
– Energy boost food/drink vs. Coffee
– Anti-stress functional food/drink vs. Cigarette; Alcohol
• Often it won’t be. So don’t invest in haste
© Datamonitor33
Checklist for success
• High daily relevance
• Specific, clearly communicated benefits
• Offers immediate mental well-being
• Positively marketed, lifestyle positioning
• Taste
• Convenient fit with lifestyles
• Best vehicle / format for delivery
• “Something I care about”
• “I understand it, I believe it”
• “Makes me feel-good now”
• “It’s yum” - (I’ll buy it again)
• “I can get it, it’s easy to use”
• “It’s my best bet for getting this”
Your offering has: Why it’s important to consumers:
© Datamonitor34
Contact us for your research requests…
• Giles WattsSales [email protected]+44 20 7675 7255
• Gordon Cousland, Client Services [email protected]+44 20 7675 7035
• John BandManaging [email protected] +44 20 7675 7183
• Jill-Marit Lerum Cornes, Lead [email protected]+44 20 7675 7102