Diana Cowland, Health and Wellness Analyst, Euromonitor12.19.12
Functional food and drink products targeted at preventing the deterioration of health or improving overall well-being have increased their presence over the last few years, but are still led by developed markets. In 2012, Euromonitor International’s prime positioning data—which measure sales of food or drink products marketed specifically at certain health positionings—from 54 researched countries showed sales of $678 million, two thirds of which was from developed countries. Retail sales are still dominated by products targeted at general well-being, with a share of 56%.
With rising disposable incomes and greater awareness of products and particular ingredients that can maintain or improve health, growth in emerging countries is outpacing that in developed countries. Over 2007-2012, emerging markets researched within health and wellness saw absolute growth of $109 billion in current terms, double that seen in developed regions. China and Brazil combined accounted for half of this growth. There are still opportunities aplenty within emerging markets, not just in China and Brazil but elsewhere in Asia-Pacific and Latin America. In order to succeed, companies need to innovate by looking at which health trends are doing well, focusing on local consumers and differentiating themselves from their competitors.
Oral Health & Weight Management Driving Growth
China saw substantial growth of $11.6 billion in the health and wellness market over 2011-2012, but it is still those products targeted at general well-being that are driving growth. However, chewing gum positioned for oral health and weight management beverages are some of the fastest growers. Weight management beverages are, unsurprisingly, an area of great interest, and a lucrative one, as the percentage of the population aged over 15 who are overweight rose from 25% to 36% over 2006-2011. The market is dominated by local brands, with Master Kong from Ting Hsin International Group and Uni-President from Uni-President Enterprises Corp leading the way. Master Kong saw absolute growth of $667 million alone over 2010-2011.
In Brazil, like China, general well-being and weight management are some of the leading positionings that contributed to the country’s impressive additional $4.2 billion sales over 2011-2012. However, here it is weight management packaged food that dominates, led by brands from Nestlé and Herbalife. Digestive health packaged food is also gaining momentum, dominated by Activia; but cardiovascular health packaged food products are not far behind.
One of the reasons functional food and drink is, on the whole, accepted in regions such as Asia-Pacific and, increasingly, Latin America, is due to the high cultural acceptance of improving health through particular ingredients in food and drink. This is linked strongly to those used in traditional herbal medicine practices, such as lingzhi and yerba maté. Japan, for example, is far and away the largest market for beauty from within, as the functionality of the ingredients used is widely accepted. This trend is taking off in other Asia-Pacific and Latin American countries, but consumers remain very skeptical in Western Europe and Latin America.
Focus on Local Tastes
To succeed in emerging markets it is important to ensure products are aligned with local taste preferences. In Asia-Pacific, in particular, a number of the leading brands are local companies that understand not only which health trends resonate the most with consumers, but also the local taste preferences. As these markets become more lucrative, multinationals are entering them and often building research centers in the country to become immersed in the region, allowing for more regional specific innovation. For example, Nestlé and PepsiCo have recently opened centers in India and China, respectively, and Unilever has one in Brazil.
Diverge from your Competitors
There is plenty of opportunity for further investment in functional food and drink products with specific health positionings in emerging markets. They are set to see absolute growth of $23 billion by 2017, 40% greater than the growth forecast for developed markets. While weight management and digestive health will continue to do well, companies should move away from positioning their products simply on a general well-being platform, and focus on the specific benefits of their functional ingredients. For example, other prime positionings linked to a rise in diet-related chronic diseases, such as cardiovascular health, those linked to immune support or even those targeted at an aging population, such as bone and joint health, have the potential to be successful.
For further insight, contact Diana Cowland, Health and Wellness Analyst at Euromonitor International, at diana.cowland@euromonitor.com
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The ideas and opinions expressed in this article are those of the author and do not necessarily reflect views held by Nutraceuticals World.
With rising disposable incomes and greater awareness of products and particular ingredients that can maintain or improve health, growth in emerging countries is outpacing that in developed countries. Over 2007-2012, emerging markets researched within health and wellness saw absolute growth of $109 billion in current terms, double that seen in developed regions. China and Brazil combined accounted for half of this growth. There are still opportunities aplenty within emerging markets, not just in China and Brazil but elsewhere in Asia-Pacific and Latin America. In order to succeed, companies need to innovate by looking at which health trends are doing well, focusing on local consumers and differentiating themselves from their competitors.
Oral Health & Weight Management Driving Growth
China saw substantial growth of $11.6 billion in the health and wellness market over 2011-2012, but it is still those products targeted at general well-being that are driving growth. However, chewing gum positioned for oral health and weight management beverages are some of the fastest growers. Weight management beverages are, unsurprisingly, an area of great interest, and a lucrative one, as the percentage of the population aged over 15 who are overweight rose from 25% to 36% over 2006-2011. The market is dominated by local brands, with Master Kong from Ting Hsin International Group and Uni-President from Uni-President Enterprises Corp leading the way. Master Kong saw absolute growth of $667 million alone over 2010-2011.
In Brazil, like China, general well-being and weight management are some of the leading positionings that contributed to the country’s impressive additional $4.2 billion sales over 2011-2012. However, here it is weight management packaged food that dominates, led by brands from Nestlé and Herbalife. Digestive health packaged food is also gaining momentum, dominated by Activia; but cardiovascular health packaged food products are not far behind.
One of the reasons functional food and drink is, on the whole, accepted in regions such as Asia-Pacific and, increasingly, Latin America, is due to the high cultural acceptance of improving health through particular ingredients in food and drink. This is linked strongly to those used in traditional herbal medicine practices, such as lingzhi and yerba maté. Japan, for example, is far and away the largest market for beauty from within, as the functionality of the ingredients used is widely accepted. This trend is taking off in other Asia-Pacific and Latin American countries, but consumers remain very skeptical in Western Europe and Latin America.
Focus on Local Tastes
To succeed in emerging markets it is important to ensure products are aligned with local taste preferences. In Asia-Pacific, in particular, a number of the leading brands are local companies that understand not only which health trends resonate the most with consumers, but also the local taste preferences. As these markets become more lucrative, multinationals are entering them and often building research centers in the country to become immersed in the region, allowing for more regional specific innovation. For example, Nestlé and PepsiCo have recently opened centers in India and China, respectively, and Unilever has one in Brazil.
Diverge from your Competitors
There is plenty of opportunity for further investment in functional food and drink products with specific health positionings in emerging markets. They are set to see absolute growth of $23 billion by 2017, 40% greater than the growth forecast for developed markets. While weight management and digestive health will continue to do well, companies should move away from positioning their products simply on a general well-being platform, and focus on the specific benefits of their functional ingredients. For example, other prime positionings linked to a rise in diet-related chronic diseases, such as cardiovascular health, those linked to immune support or even those targeted at an aging population, such as bone and joint health, have the potential to be successful.
For further insight, contact Diana Cowland, Health and Wellness Analyst at Euromonitor International, at diana.cowland@euromonitor.com
——
The ideas and opinions expressed in this article are those of the author and do not necessarily reflect views held by Nutraceuticals World.
