Growing appetite for health

More health conscious consumers and the negative publicity about food safety have pushed health to the top of food manufacturers’ agenda.

Datamonitor, which tracks global food and drink launches through its Worldwide Innovations Network (WIN), has identified three core trends in the food industry – the rising dominance of functional, organic and convenience foods.

There were 150 food products launched under the “healthy” banner over the past six months. Manufacturers targeting the health conscious are offering products which draw on scientific research.

Functional food products, such as Johnson & Johnson’s Benecol, have created much interest, prompting the launch of the Aviva range from Novartis and the Canadian launch of Vector from Kellogg’s. Vector claims to be the first meal replacement in a flaked format, enriched with 16 essential vitamins and minerals.

Organic foods is another growing sector and over the past six months 70 products were launched in the UK, with sales reaching £415m in 1999 and expected to rise to £1.2bn by 2004.

There are two types of organic products: those targeted at the children’s market, and products for adults. With the children’s food, 100 per cent health is the sole expectation of consumers, while the adult products – such as snacks, soups, bakery and dairy products – offer the added factors of indulgence and luxury.

WIN data shows snack launches are highlighting organic ingredients while being packaged to communicate a premium quality image – examples are Mackie’s Organic Luxury Ice cream and New Covent Garden Gourmet soups.

The success of the organic food industry depends on manufacturers and retailers securing supply in sufficient quantity to achieve economies of scale and reduce price premiums.

The future of product development lies in matching new lines to conventional food and drinks.

More developed categories, where supply is easily secured – including dairy products such as yogurts, ice cream, biscuits and juices – have had a large number of range extensions in 1999. First generation products – light processed foods such as yogurts, biscuits and cereals – are more likely to appear on supermarket shelves as supply of organic raw materials increases.

Supply levels also influence the development of processed products such as ready meals and frozen desserts. The level of processing is higher, adding more intermediaries to the value chain and resulting in a higher price. But the extent of processing is limited by regulations which identify an acceptable level of processing for the product to be defined as organic.

Consumers’ refusal to compromise on luxury is shown by the proliferation of premium and indulgent goods, with 175 products launched during the past six months. Examples of luxury goods are Cappuccino Crunchi, a flavoured breakfast cereal from Jordan, and baby new potato crisps from private labels.

There have been about 50 new launches in the calorie-conscious “low” and “light” sector over the past six months. Again, manufacturers are responding to consumers’ divergent needs by combining indulgent or exotic products with a health factor. These include Asda’s Healthy Choice Bombay Potatoes, and Birds Eye’s 95 per cent fat-free boil-in-the-bag meals, which appeal to both the time- and health-conscious.

Smaller households, growing numbers of working women and pressured lifestyles are driving demand for convenience. Once seen as unhealthy, lazy food, the ready meal has been repositioned as a premium, indulgent option. Sales have increased from £800m in 1995 to over £1bn in 1999.

The chilled meals sector grew by an average of seven per cent a year from 1995-99, compared with three per cent a year for frozen meals over the same period.

The WIN study highlights the convergence of food trends. Consumers are no longer satisfied with single-concept foods, but look for the combination of health with luxury or convenience with quality.

These expectations are shaping the future of the food industry. Npd across all categories highlights consumer demand for food to fulfil a complex array of needs and to perform to increasingly high standards.


    Leave a comment